Rayovac 2014 Annual Report Download - page 35

• the financial condition of our suppliers;
• political and economic instability in the countries in which our suppliers are located, as a result of war,
terrorist attacks, pandemics, natural disasters or otherwise;
• our ability to import outsourced products;
• our suppliers’ noncompliance with applicable laws, trade restrictions and tariffs; or
• our suppliers’ ability to manufacture and deliver outsourced products according to our standards of
quality on a timely and efficient basis.
If our relationship with one of our key suppliers is adversely affected, we may not be able to quickly or
effectively replace such supplier and may not be able to retrieve tooling, molds or other specialized production
equipment or processes used by such supplier in the manufacture of our products. The loss of one or more of our
suppliers, a material reduction in their supply of products or provision of services to us or extended disruptions or
interruptions in their operations could have a material adverse effect on our business, financial condition and
results of operations.
We manufacture the majority of our foil cutting systems for our shaving product lines, using specially
designed machines and proprietary cutting technology, at our Portage, Wisconsin facility. In addition, we also
manufacture the majority of our residential door locks at our Subic Bay, Philippines facility. Our home and
garden products are mainly manufactured from our St. Louis, Missouri, facility. Damage to these facilities, or
prolonged interruption in the operations of these facilities whether for repairs, as a result of labor difficulties or
for other reasons, could have a material adverse effect on our ability to manufacture and sell our foil shaving,
residential door locks and home and garden products which could in turn harm our business, financial condition
and results of operations.
We face risks related to our sales of products obtained from third-party suppliers.
We sell a significant number of products that are manufactured by third party suppliers over which we have
no direct control. While we have implemented processes and procedures to try to ensure that the suppliers we use
are complying with all applicable regulations, there can be no assurances that such suppliers in all instances will
comply with such processes and procedures or otherwise with applicable regulations. Noncompliance could
result in our marketing and distribution of contaminated, defective or dangerous products which could subject us
to liabilities and could result in the imposition by governmental authorities of procedures or penalties that could
restrict or eliminate our ability to purchase products from non-compliant suppliers. Any or all of these effects
could adversely affect our business, financial condition and results of operations.
In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act includes provisions regarding
certain minerals and metals, known as conflict minerals, mined from the Democratic Republic of Congo and
adjoining countries. These provisions require companies to undertake due diligence procedures and report on the
use of conflict minerals in its products, including products manufactured by third parties. Compliance with these
provisions will cause us to incur costs to certify that our supply chain is conflict free and we may face difficulties
if our suppliers are unwilling or unable to verify the source of their materials. Our ability to source these minerals
and metals may also be adversely impacted. In addition, our customers may require that we provide them with a
certification and our inability to do so may disqualify us as a supplier.
Class action and derivative action lawsuits and other investigations, regardless of their merits, could have
an adverse effect on our business, financial condition and results of operations.
We and certain of our officers and directors have been named in the past, and, may be named in the future,
as defendants of class action and derivative action lawsuits. In the past, we have also received requests for
information from government authorities. Regardless of their subject matter or merits, class action lawsuits and
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