Rayovac 2013 Annual Report Download - page 38

or the business climate that could affect our assets; an accumulation of costs significantly in excess of the amount
originally expected for the acquisition of an asset; and significant changes in the cash flows associated with an
asset. As a result of such circumstances, we may be required to record a significant charge to earnings in our
financial statements during the period in which any impairment of our goodwill, indefinite-lived intangible assets
or other long-term assets is determined. Any such impairment charges could have a material adverse effect on
our business, financial condition and operating results.
If we are unable to protect the confidentiality of our proprietary information and know-how, the value of
our technology, products and services could be harmed significantly.
We rely on trade secrets, know-how and other proprietary information in operating our business. If this
information is not adequately protected, then it may be disclosed or used in an unauthorized manner. To the
extent that consultants, key employees or other third parties apply technological information independently
developed by them or by others to our proposed products, disputes may arise as to the proprietary rights to such
information, which may not be resolved in our favor. The risk that other parties may breach confidentiality
agreements or that our trade secrets become known or independently discovered by competitors, could harm us
by enabling our competitors, who may have greater experience and financial resources, to copy or use our trade
secrets and other proprietary information in the advancement of their products, methods or technologies. The
disclosure of our trade secrets would impair our competitive position, thereby weakening demand for our
products or services and harming our ability to maintain or increase our customer base.
Disruption or failures of our information technology systems could have a material adverse effect on our
business.
Our information technology systems are susceptible to security breaches, operational data loss, general
disruptions in functionality, and may not be compatible with new technology. We depend on our information
technology systems for the effectiveness of our operations and to interface with our customers, as well as to
maintain financial records and accuracy. Disruption or failures of our information technology systems could
impair our ability to effectively and timely provide our services and products and maintain our financial records,
which could damage our reputation and have a material adverse effect on our business.
Risks Related to the Hardware Acquisition
Significant costs have been incurred in connection with the consummation of the Hardware Acquisition
and are expected to be incurred in connection with the integration of Spectrum and the HHI Business into
a combined company, including legal, accounting, financial advisory and other costs.
We expect to incur one-time costs in connection with integrating the operations, products and personnel of
Spectrum and the HHI Business and TLM Taiwan acquired from Stanley Black & Decker into a combined
company, in addition to costs related directly to completing the Hardware Acquisition described below. These
costs may include costs for:
• employee redeployment, relocation or severance;
• integration of information systems;
• combination of research and development teams and processes; and
• reorganization or closures of facilities.
In addition, we expect to incur a number of non-recurring costs associated with combining our operations
with those of the HHI Business. Additional unanticipated costs may yet be incurred as we integrate our business
with the HHI Business. Although we expect that the elimination of duplicative costs, as well as the realization of
other efficiencies related to the integration of our operations with those of the HHI Business, may offset
incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near
term. Additionally, while we expect to benefit from leveraging distribution channels and brand names across
both companies, we cannot assure you that we will achieve such benefits.
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