Rayovac 2011 Annual Report Download - page 27

European economy could lead to a decrease in consumer confidence, which could cause reductions in
discretionary spending and demand for our products. Furthermore, sovereign debt issues could also lead to
further significant, and potentially longer-term, economic issues such as reduced economic growth and
devaluation of the Euro against the U.S. Dollar, any of which could adversely affect our business, financial
conditions and operating results.
We may not be able to retain key personnel or recruit additional qualified personnel whether as a result of
the Merger or otherwise, which could materially affect our business and require us to incur substantial
additional costs to recruit replacement personnel.
We are highly dependent on the continuing efforts of our senior management team and other key personnel.
As a result of the Merger, our current and prospective employees could experience uncertainty about their future
roles. This uncertainty may adversely affect our ability to attract and retain key management, sales, marketing
and technical personnel. Any failure to attract and retain key personnel, whether as a result of the Merger or
otherwise, could have a material adverse effect on our business. In addition, we currently do not maintain “key
person” insurance covering any member of our management team.
We participate in very competitive markets and we may not be able to compete successfully, causing us to
lose market share and sales.
The markets in which we participate are very competitive. In the consumer battery market, our primary
competitors are Duracell (a brand of Procter & Gamble), Energizer and Panasonic (a brand of Matsushita). In
the electric shaving and grooming and electric personal care product markets, our primary competitors are Braun
(a brand of Procter & Gamble), Norelco (a brand of Philips), and Vidal Sassoon and Revlon (brands of Helen of
Troy). In the pet supplies market, our primary competitors are Mars, Hartz and Central Garden & Pet. In the
Home and Garden Business, our principal national competitors are Scotts, Central Garden & Pet and S.C.
Johnson. Our principal national competitors within our Small Appliances segment include Jarden Corporation,
DeLonghi America, Euro-Pro Operating LLC, Metro Thebe, Inc., d/b/a HWI Breville, NACCO Industries, Inc.
(Hamilton Beach) and SEB S.A. In each of these markets, we also face competition from numerous other
companies. In addition, in a number of our product lines, we compete with our retail customers, who use their
own private label brands, and with distributors and foreign manufacturers of unbranded products. Significant new
competitors or increased competition from existing competitors may adversely affect our business, financial
condition and results of our operations.
We compete with our competitors for consumer acceptance and limited shelf space based upon brand name
recognition, perceived product quality, price, performance, product features and enhancements, product
packaging and design innovation, as well as creative marketing, promotion and distribution strategies, and new
product introductions. Our ability to compete in these consumer product markets may be adversely affected by a
number of factors, including, but not limited to, the following:
• We compete against many well-established companies that may have substantially greater financial and
other resources, including personnel and research and development, and greater overall market share
than us.
• In some key product lines, our competitors may have lower production costs and higher profit margins
than us, which may enable them to compete more aggressively in offering retail discounts, rebates and
other promotional incentives.
• Product improvements or effective advertising campaigns by competitors may weaken consumer
demand for our products.
• Consumer purchasing behavior may shift to distribution channels where we do not have a strong
presence.
• Consumer preferences may change to lower margin products or products other than those we market.
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