Rayovac 2013 Annual Report Download - page 26

labor market and general consumer fears of a continuing economic downturn could have a negative impact on
discretionary consumer spending. If the economy continues to deteriorate or fails to improve, our business could
be negatively impacted, including as a result of reduced demand for our products or supplier or customer
disruptions. Any weakness in discretionary consumer spending could have a material adverse effect on our
revenues, results of operations and financial condition. In addition, our ability to access the capital markets may
be restricted at a time when it could be necessary or beneficial to do so, which could have an impact on our
flexibility to react to changing economic and business conditions.
Concern over continuing high unemployment, stagnant economic performance and government debt levels
in many European Union countries has caused significant fluctuations of the Euro relative to other currencies,
such as the U.S. Dollar. Criticism of excessive national debt among certain European Union countries has led to
credit downgrades of the sovereign debt of several countries in the region, and uncertainty about the future status
of the Euro. 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 the hardware and home improvement industry, our principle
competitors are Schlage, a division of Ingersoll-Rand, Masco, Fortune Brands, Kohler, and American Standard.
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.
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