Sunbeam 2007 Annual Report Download - page 34

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To compete effectively in the future in the consumer products industry, among other things, we must:
• maintain strict quality standards;
• develop new products that appeal to consumers; and
• deliver products on a reliable basis at competitive prices.
Our inability to do any of these things could have a material adverse effect on our business, results of
operations and financial condition.
If we fail to develop new or expand existing customer relationships, our ability to grow our business will be
impaired.
Our growth depends to a significant degree upon our ability to develop new customer relationships and to
expand existing relationships with current customers. We cannot guarantee that new customers will be found,
that any such new relationships will be successful when they are in place, or that business with current customers
will increase. Failure to develop and expand such relationships could have a material adverse effect on our
business, results of operations and financial condition.
If we cannot continue to develop new products in a timely manner, and at favorable margins, we may not
be able to compete effectively.
We believe that our future success will depend, in part, upon our ability to continue to introduce innovative
design extensions for our existing products and to develop, manufacture and market new products. We cannot
assure you that we will be successful in the introduction, manufacturing and marketing of any new products or
product innovations, or develop and introduce, in a timely manner, innovations to our existing products that
satisfy customer needs or achieve market acceptance. Our failure to develop new products and introduce them
successfully and in a timely manner, and at favorable margins, would harm our ability to successfully grow our
business and could have a material adverse effect on our business, results of operations and financial condition.
We are subject to risks related to acquisitions, and our failure to successfully integrate acquired businesses
could have a material adverse effect on our business and results of operations.
We have achieved growth through the acquisition of companies, including the acquisitions of AHI and
Holmes, and tuck-in acquisitions. There can be no assurance that we will be able to integrate successfully these
businesses or future acquisitions, including our acquisition of K2 Inc., into our existing business without
substantial costs, delays or other operational or financial difficulties. There is also no assurance that we will be
able to successfully leverage synergies among our businesses to increase sales and obtain cost savings.
Additionally, the failure of these businesses to achieve expected results, diversion of our management’s attention
and failure to retain key personnel at these businesses could have a material adverse effect on our business,
results of operations and financial condition.
We anticipate that any future acquisitions we pursue as part of our business strategy may be financed
through a combination of cash on hand, operating cash flow, availability under our senior credit facility and new
capital market offerings. If new debt is added to current debt levels, or if we incur other liabilities, including
contingent liabilities, in connection with an acquisition, the debt or liabilities could impose additional constraints
and requirements on our business and financial performance, which could materially adversely affect our
financial condition and operations.
If we experience revenue declines and decreased profitability, we may incur future impairment charges
that could have a material effect on our results of operations.
Our revenue growth and profitability are dependent on our ability to introduce new products and maintain
market share. Several factors also impact our profitability which are discussed in this section. If declines in
revenues and profitability prevent us from achieving our earnings projections, we may incur impairment charges
related to goodwill or indefinite lived intangible assets, or both.
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