Rayovac 2012 Annual Report Download - page 18

Procter & Gamble, which sells and markets foil shavers. Through our Remington brand, we sell both foil and
rotary shavers.
Primary competitive brands in the small appliance category include Hamilton Beach, Proctor Silex,
Sunbeam, Mr. Coffee, Oster, General Electric, Rowenta, DeLonghi, Kitchen Aid, Cuisinart, Krups, Braun, Rival,
Europro, Kenwood, Philips, Morphy Richards, Breville and Tefal. The key competitors of Russell Hobbs in this
market in the U.S. and Canada 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 addition, Russell
Hobbs competes with retailers who use their own private label brands for household appliances (for example,
Wal-Mart).
Our major competitors in the electric personal care product category are Conair Corporation, Wahl Clipper
Corporation and Helen of Troy Limited (“Helen of Troy”).
Some of our major competitors have greater resources and greater overall market share than we do. They
have committed significant resources to protect their market shares or to capture market share from us and may
continue to do so in the future. In some key product lines, our competitors may have lower production costs and
higher profit margins than we do, which may enable them to compete more aggressively in advertising and in
offering retail discounts and other promotional incentives to retailers, distributors, wholesalers and, ultimately,
consumers.
Seasonality
On a consolidated basis our financial results are approximately equally weighted between quarters, however,
sales of certain product categories tend to be seasonal. Sales in the consumer battery, electric shaving and
grooming and electric personal care product categories, particularly in North America, tend to be concentrated in
the December holiday season (Spectrum’s first fiscal quarter). Demand for pet supplies products remains fairly
constant throughout the year. Demand for home and garden control products sold though the Home and Garden
Business typically peaks during the first six months of the calendar year (Spectrum’s second and third fiscal
quarters). Small Appliances peaks from July through December primarily due to the increased demand by
customers in the late summer for “back-to-school” sales and in the fall for the holiday season. For a more
detailed discussion of the seasonality of our product sales, see Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations—“Seasonal Product Sales.”
Governmental Regulations and Environmental Matters
Due to the nature of our operations, our facilities are subject to a broad range of federal, state, local and
foreign legal and regulatory provisions relating to the environment, including those regulating the discharge of
materials into the environment, the handling and disposal of solid and hazardous substances and wastes and the
remediation of contamination associated with the releases of hazardous substances at our facilities. We believe
that compliance with the federal, state, local and foreign laws and regulations to which we are subject will not
have a material effect upon our capital expenditures, financial condition, earnings or competitive position.
From time to time, we have been required to address the effect of historic activities on the environmental
condition of our properties. We have not conducted invasive testing at all facilities to identify all potential
environmental liability risks. Given the age of our facilities and the nature of our operations, it is possible that
material liabilities may arise in the future in connection with our current or former facilities. If previously
unknown contamination of property underlying or in the vicinity of our manufacturing facilities is discovered, we
could incur material unforeseen expenses, which could have a material adverse effect on our financial condition,
capital expenditures, earnings and competitive position. Although we are currently engaged in investigative or
remedial projects at some of our facilities, we do not expect that such projects, taking into account established
accruals, will cause us to incur expenditures that are material to our business, financial condition or results of
operations; however, it is possible that our future liability could be material.
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