Sunbeam 2007 Annual Report Download - page 42

cross-default provision applies. In addition, the lenders may be able to terminate any commitments they had
made to supply us with further funds. Furthermore, substantially all of our domestic assets (including equity
interests) are pledged to secure our indebtedness under our senior credit facility. If we default on the financial
covenants in our senior credit facility, our lenders could foreclose on their security interest in such assets, which
would have a material adverse effect on our business, results of operations and financial condition.
Compliance with changing regulation of corporate governance and public disclosure may result in
additional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including
the Sarbanes-Oxley Act of 2002, new Securities and Exchange Commission (the “Commission”) regulations and
New York Stock Exchange market rules, are creating uncertainty for companies such as ours. These new or
changed laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of
specificity. As a result, their application in practice may evolve over time as new guidance is provided by
regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and
higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to
maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with
evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general
and administrative expenses and a diversion of management time and attention from revenue-generating
activities to compliance activities. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley
Act of 2002 and the related regulations regarding our required assessment of our internal controls over financial
reporting and our external auditors’ audit of that assessment has required the commitment of significant financial
and managerial resources. We expect these efforts to require the continued commitment of significant resources.
Furthermore, our board members, chief executive officer and chief financial officer could face an increased risk
of personal liability in connection with the performance of their duties. As a result, we may have difficulty
attracting and retaining qualified board members and executive officers, which could harm our business. If our
efforts to comply with new or changed laws, regulations and standards differ from the activities intended by
regulatory or governing bodies due to ambiguities related to practice, our reputation may be harmed.
Item 1B. Unresolved Staff Comments
Not Applicable.
Item 2. Properties
Our corporate office is located in a leased office space in Rye, New York. In addition, at December 31,
2007, the Company and its subsidiaries lease or own facilities throughout the U.S., some of which have multiple
buildings and warehouses and these U.S. facilities encompass approximately 12.2 million square feet. We lease
or own international facilities encompassing approximately 4.5 million square feet primarily in Asia, Canada,
Europe and Latin America. Of the U.S. and international manufacturing and warehouse facilities, approximately
7.7 million square feet of space is owned, while the remaining 9.1 million square feet of space is leased. The
approximate percentage of the facility square footage used by segment is as follows: Outdoor Solutions – 50%;
Consumer Solutions – 27%; Branded Consumables – 18%; and Process Solutions – 5%.
In general, our properties are well maintained, considered adequate and being utilized for their intended
purposes. See Note 5 to our consolidated financial statements, Property, Plant and Equipment, which discloses
amounts invested in land, buildings and machinery and equipment. Also see Note 11 to our consolidated
financial statements, Commitments and Contingencies which discloses the Company’s operating lease
commitments.
Item 3. Legal Proceedings
We are involved in various legal disputes and other legal proceedings that arise from time to time in the
ordinary course of business. In addition, we or various of our subsidiaries have been identified by the United
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