Sunbeam 2004 Annual Report Download - page 35

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(cont’d)
permitted by FSP 106-1, we made a one-time election to defer accounting for the effect of the Medicare
Prescription Drug Act and, as a result, the amounts included in our Consolidated Financial Statements
do not reflect the effects of the Medicare Prescription Drug Act.
In May 2004, the FASB issued FSP No. 106-2 (“FSP 106-2”), which superseded FASP 106-1. FSP 106-2
provides authoritative guidance on the accounting for the federal subsidy and specifies the disclosure
requirements for employers who have adopted FSP 106-2. Detailed regulations necessary to implement
the Medicare Prescription Drug Act have not been issued, including those that would specify the
manner in which actuarial equivalency must be determined, the evidence required to demonstrate
actuarial equivalency, and the documentation requirements necessary to be entitled to the subsidy. FSP
106-2 is effective for our first quarter of 2005. We do not currently believe that the adoption of FSP 106-2
will have a material impact on our Consolidated Financial Statements. Final authoritative guidance
could require us to change this assessment.
Forward-Looking Statements
From time to time, we may make or publish forward-looking statements relating to such matters as
anticipated financial performance, business prospects, technological developments, new products, and
similar matters. Such statements are necessarily estimates reflecting management’s best judgment based
on current information. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. Such statements are usually identified by the use of words or phrases such as
“believes,”“anticipates,”“expects,”“estimates,”“planned,”“outlook” and “goal.” Because forward-
looking statements involve risks and uncertainties, our actual results could differ materially. In order to
comply with the terms of the safe harbor, we note that a variety of factors could cause our actual results
and experience to differ materially from the anticipated results or other expectations expressed in
forward-looking statements.
While it is impossible to identify all such factors, the risks and uncertainties that may affect our
business, financial condition and results of operations include the following:
‰Our sales are highly dependent on purchases from several large customers and any significant
decline in these purchases or pressure from these customers to reduce prices could have a
negative effect on our future financial performance;
‰We may be adversely affected by the trend towards retail trade consolidation and private-
labeling;
‰Sales of some of our products are seasonal and weather related;
‰Our operations are dependent upon third-party suppliers and service providers whose failure to
perform adequately could disrupt our business operations;
‰We depend on suppliers in Asia;
‰We are subject to several production-related risks which could jeopardize our ability to realize
anticipated sales and profits;
‰We depend on a single manufacturing facility for certain products;
‰Competition in our industries may hinder our ability to execute our business strategy, achieve
profitability, or maintain relationships with existing customers;
‰If we fail to develop new or expand existing customer relationships, our ability to grow our
business will be impaired;
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