Sunbeam 2007 Annual Report Download - page 41

Additionally, our business operations are dependent on our logistical systems, which include our order
management systems and our computerized warehouse systems. Any interruption in our logistical systems could
impact our ability to procure our products from our factories and suppliers, transport them to our distribution
facilities, store them and deliver them to our customers on time and in the correct amounts.
Failure to successfully implement our reorganization and acquisition-related projects timely and
economically could materially increase our costs and impair our results of operations.
We are in the process of significant reorganization and acquisition-related projects. There can be no
assurance that these projects can be completed on time or within our projected costs. Furthermore, these projects
will result in an increased reliance on sourced finished goods from third parties, particularly international
vendors. Our failure to implement these projects economically and successfully could have a material adverse
effect on our business, financial condition and results of operations.
A deterioration of relations with our labor unions could have a material adverse effect on our business,
financial condition and results of operations.
Approximately 320 union workers are covered by five collective bargaining agreements at five of our U.S.
facilities. These agreements expire at our jar closure facility (Muncie, Indiana) in October 2009, at our kitchen
match manufacturing facility (Cloquet, Minnesota) in February 2011, at our metals facility (Greeneville,
Tennessee) in October 2011, at our fire extinguisher plant (Aurora, Illinois) in May 2008, and at our conductive
fiber plant (Enka, North Carolina) in September 2010. Additionally, approximately 128 employees at our
Legutiano, Spain manufacturing facility, 127 employees at our Lyon, France facility and 838 employees at our
Latin America facilities are unionized.
We have not experienced a work stoppage during the past five years except for brief work stoppages in 2004
and 2008 in Lyon, France in conjunction with our restructurings and pay rates at that location. However, we
cannot assure you that there will not be a work stoppage in the future. Any such work stoppage could have a
material adverse effect on our business, financial condition and results of operations.
Our senior credit facility and the indenture related to our notes contain various covenants which limit our
management’s discretion in the operation of our business and the failure to comply with such convents
could have a material adverse effect on our business, financial condition and results of operations.
Our senior credit facility and the indenture related to our notes contain various provisions that limit our
management’s discretion by restricting our and our subsidiaries’ ability to, among other things:
• incur additional indebtedness;
• pay dividends or distributions on, or redeem or repurchase, capital stock;
• make investments;
• engage in transactions with affiliates;
• incur liens;
• transfer or sell assets; and
• consolidate, merge or transfer all or substantially all of our assets.
In addition, our senior credit facility requires us to meet certain financial ratios. Any failure to comply with
the restrictions of our senior credit facility and the indenture related to our notes or any other subsequent
financing agreements may result in an event of default. An event of default may allow the creditors, if the
agreements so provide, to accelerate the related debt as well as any other debt to which a cross-acceleration or
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