Rayovac 2012 Annual Report Download - page 26

Download and view the complete annual report

Please find page 26 of the 2012 Rayovac annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

In 2011 and 2012, concern over sovereign debt in Greece, Spain, Italy and certain other European Union
countries caused significant fluctuations of the Euro relative to other currencies, such as the U.S. Dollar.
Destabilization of the 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 depend on key personnel and may not be able to retain those employees or recruit additional qualified
personnel.
We are highly dependent on the continuing efforts of our senior management team and other key personnel.
Our business, financial condition and results of operations could be materially adversely affected if we lose any
of these persons and are unable to attract and retain qualified replacements.
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 product category 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.
• We may not be successful in the introduction, marketing and manufacture of any new products or
product innovations or be able to develop and introduce, in a timely manner, innovations to our
existing products that satisfy customer needs or achieve market acceptance.
16