Sunbeam 2007 Annual Report Download - page 29

our Insider Trading Policy; our Management and Board of Directors; our Committee Composition; our Insider
Transactions; and the charters of our Board committees. These corporate governance materials are also available
in print upon request by any stockholder to our Investor Relations department at our corporate headquarters.
Information on our website does not constitute part of this filing on Form 10-K.
In addition to the information included in this Item 1, see Item 7 (Management’s Discussion and Analysis of
Financial Condition and Results of Operations) and Item 8, Note 1 (Business and Significant Accounting
Policies) and Note 17 (Segment Information) for financial and other information concerning our business
segments and geographic areas.
Our executive corporate headquarters is located at 555 Theodore Fremd Avenue, Rye, NY 10580, and our
telephone number is [phone].
Item 1A. Risk Factors
The ownership of our common stock involves a number of risks and uncertainties. Potential investors should
carefully consider the risks and uncertainties described below and the other information in this Form 10-K and
Annual Report before deciding whether to invest in our securities. Our business, financial condition or results of
operations could be materially adversely affected by any of these risks. The risks described below are not the
only ones facing us. Additional risks that are currently unknown to us or that we currently consider to be
immaterial may also impair our business or adversely affect our financial condition or results of operations.
Risks Relating to Our Business
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.
Due to consolidation in the U.S. retail industry, our customer base has become relatively concentrated. In
2007, one customer accounted for approximately 20% of our consolidated net sales.
Although we have long-established relationships with many of our customers, we do not have any long-term
supply or binding contracts or guarantees of minimum purchases. Purchases by our customers are generally made
using individual purchase orders. As a result, these customers may cancel their orders, change purchase
quantities from forecast volumes, or delay purchases for a number of reasons beyond our control. Significant or
numerous cancellations, reductions, or delays in purchases by customers could have a material adverse effect on
our business, results of operations and financial condition. In addition, because many of our costs are fixed, a
reduction in customer demand could have an adverse effect on our gross profit margins and operating income.
We depend on a continuous flow of new orders from our large, high-volume retail customers; however, we
may be unable to continually meet the needs of our customers. Furthermore, on-time delivery and satisfactory
customer service are becoming increasingly important to our customers. Retailers are increasing their demands
on suppliers to:
• reduce lead times for product delivery, which may require us to increase inventories and could impact
the timing of reported sales;
• improve customer service, such as with direct import programs, whereby product is supplied directly to
retailers from third party suppliers; and
• adopt new technologies related to inventory management such as Radio Frequency Identification,
otherwise known as RFID, technology, which may have substantial implementation costs.
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