Sunbeam 2007 Annual Report Download - page 30

We cannot provide any assurance that we can continue to successfully meet the needs of our customers. A
substantial decrease in sales to any of our major customers could have a material adverse effect on our business,
results of operations and financial condition.
Seasonality and weather conditions may cause our operating results to vary from quarter to quarter.
Sales of certain of our products are seasonal. Sales of our outdoor camping equipment, fishing equipment
and sporting goods equipment products increase during warm weather months and decrease during winter, while
sales of our skis, snowboards and snowshoes increase during the cold weather months and decrease during
summer. Additionally, sales of our Branded Consumables products generally reflect the season, with sales of our
home improvement products concentrated in the spring and summer months and sales of our firelogs and
firestarters concentrated in the fall and winter months. Sales of our Consumer Solutions products generally are
strongest in the fourth quarter preceding the holiday season.
Weather conditions may also negatively impact sales. For instance, we may not sell as many of certain
outdoor recreation products (such as lanterns, tents and sleeping bags) as anticipated if there are fewer natural
disasters such as hurricanes and ice storms; mild winter weather may negatively impact sales of electric blankets,
heaters, firelogs and firestarters, skis, snowboards, snowshoes, some health products and smoke or carbon
monoxide alarms; and the late arrival of summer weather may negatively impact sales of outdoor camping
equipment and grills, watersports and personal flotation devices, fishing equipment and sporting goods
equipment. Additionally, sales of our home canning products and our home improvement products may be
negatively impacted by unfavorable weather conditions and other market trends. Periods of drought, for example,
could adversely affect the supply and price of fruit, vegetables and other foods available for home canning, and
inclement weather may reduce the amount of time spent on home improvement projects. These factors could
have a material adverse effect on our business, results of operations and financial condition.
Our operations are dependent upon third-party suppliers whose failure to perform adequately could
disrupt our business operations.
We currently source a significant portion of parts and products from third parties. Our ability to select and
retain reliable vendors who provide timely deliveries of quality parts and products will impact our success in
meeting customer demand for timely delivery of quality products. We typically do not enter into long-term
contracts with our primary vendors and suppliers. Instead, most parts and products are supplied on a “purchase
order” basis. As a result, we may be subject to unexpected changes in pricing or supply of products. Any inability
of our suppliers to timely deliver quality parts and products or any unanticipated change in supply, quality or
pricing of products could be disruptive and costly to us.
Our reliance on manufacturing facilities and suppliers in Asia could make us vulnerable to supply
interruptions related to the political, legal and cultural environment in Asia.
A significant portion of our products are manufactured by third-party suppliers in Asia, primarily the
People’s Republic of China, or at our own facilities in southern China. Our ability to continue to select reliable
vendors who provide timely deliveries of quality parts and products will impact our success in meeting customer
demand for timely delivery of quality products. Furthermore, the ability of our own facilities to timely deliver
finished goods, and the ability of third-party suppliers to timely deliver finished goods and/or raw materials, may
be affected by events beyond their control, such as inability of shippers to timely deliver merchandise due to
work stoppages or slowdowns, or significant weather and health conditions (such as SARS) affecting
manufacturers and/or shippers. Any adverse change in, among other things, any of the following could have a
material adverse effect on our business, results of operations and financial condition:
• our relationship with third-party suppliers;
• the financial condition of third-party suppliers;
• our ability to import products from these third-party suppliers or our own facilities; or
• third-party suppliers’ ability to manufacture and deliver outsourced products on a timely basis.
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