Sunbeam 2007 Annual Report Download - page 32

With the growing trend towards consolidation among suppliers of many of our raw materials, especially
resin, glass and steel, we are increasingly dependent upon key suppliers whose bargaining strength is growing. In
addition, many of those suppliers have been reducing production capacity of those raw materials in the North
American market. We may be negatively affected by changes in availability and price of raw materials resulting
from this consolidation and reduced capacity, which could negatively impact our results of operations.
We are subject to several production-related risks which could jeopardize our ability to realize anticipated
sales and profits.
In order to realize sales and operating profits at anticipated levels, we must manufacture or source and
deliver in a timely manner products of high quality. Among others, the following factors can have a negative
effect on our ability to do these things:
• labor difficulties;
• scheduling and transportation difficulties;
• management dislocation;
• substandard product quality, which can result in higher warranty, product liability and product recall
costs;
• delays in development of quality new products;
• changes in laws and regulations, including changes in tax rates, accounting standards, and
environmental and occupational laws;
• health and safety laws; and
• changes in the availability and costs of labor.
Any adverse change in the above-listed factors could have a material adverse effect on our business, results
of operations and financial condition.
Because we manufacture or source a significant portion of our products from Asia, our production lead
times are relatively long. Therefore, we often commit to production in advance of firm customer orders. If we fail
to forecast customer or consumer demand accurately we may encounter difficulties in filling customer orders or
in liquidating excess inventories, or may find that customers are canceling orders or returning products.
Additionally, changes in retailer inventory management strategies could make inventory management more
difficult. Any of these results could have a material adverse effect on our business, results of operations and
financial condition.
Competition in our industries may hinder our ability to execute our business strategy, achieve
profitability, or maintain relationships with existing customers.
We operate in some highly competitive industries. In these industries, we compete against numerous other
domestic and foreign companies. Competition in the markets in which we operate is based primarily on product
quality, product innovation, price and customer service and support, although the degree and nature of such
competition vary by location and product line.
In the Outdoor Solutions segment, Igloo Corporation and Newell Rubbermaid are primary competitors in
our personal coolers business. Intex Corporation is a key competitor in inflatable airbed and water products. VF
Corporation and Kellwood Corporation are key competitors in tents, sleeping bags and appliances. Worthington
Industries is our primary competitor in packaged fuel. In accessories, Coghlan’s Ltd. is the key competitor. In our
fishing business, our key competitors are Cabela’s, Inc., Bass Pro Shops, Diawa Corporation, Rapala VMC
Corporation, Shimano, Inc., and Zebco, a W.C. Bradley Co. In our water sports and personal flotation device
business, HO Mfg., Johnson Outdoors, Quicksilver, Inc. and Sport Dimension Inc. are key competitors. In our ski
and snowboard business, our key competitors are Amer Sports Corporation (Salomon and Atomic), Burton
Snowboards, Head NV, Quicksilver, Inc. (Rossignol) and Tecnicagroup (Nordica). In our sports equipment
business our key competitors are Adidas Group, Amer Sports Corporation (Wilson), Easton Sports, Inc.,
Hillerich & Bradsby Company (Louisville Slugger), Mizuno, New Balance Athletic Shoe, Inc. (Brine and
Warrior), Nike, Inc., Tecnicagroup (Rollerblade) and Wm. T. Burnett & Co. (STX lacrosse).
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