1156388--3/2/2010--BIG_5_SPORTING_GOODS

related topics

{cost, regulation, environmental}

{customer, product, revenue}

{debt, indebtedness, cash}

{product, market, service}

{financial, litigation, operation}

{operation, natural, condition}

{acquisition, growth, future}

{regulation, change, law}

{operation, international, foreign}

{competitive, industry, competition}

{system, service, information}

{product, liability, claim}

{personnel, key, retain}

{stock, price, operating}

Intense competition in the sporting goods industry could limit our growth and reduce our profitability. If we fail to anticipate changes in consumer preferences, we may experience lower net sales, higher inventory, higher inventory markdowns and lower margins. Our quarterly net sales and operating results, reported and expected, can fluctuate substantially, which may adversely affect the market price of our common stock. If we are unable to successfully implement our controlled growth strategy or manage our growing business, our future operating results could suffer. Increased costs or declines in the effectiveness of print advertising, or a reduction in publishers of print advertising, could cause our operating results to suffer. Because our stores are concentrated in the western United States, we are subject to regional risks. If we lose key management or are unable to attract and retain the talent required for our business, our operating results could suffer. Our hardware and software systems are vulnerable to damage, theft or intrusion that could harm our business. If our suppliers do not provide sufficient quantities of products, our net sales and profitability could suffer. Because many of the products that we sell are manufactured abroad, we may face delays, increased cost or quality control deficiencies in the importation of these products, which could reduce our net sales and profitability. Disruptions in transportation, including disruptions at shipping ports through which our products are imported, could prevent us from timely distribution and delivery of inventory, which could reduce our net sales and profitability. All of our stores rely on a single distribution center. Any disruption or other operational difficulties at this distribution center could reduce our net sales or increase our operating costs. Increases in transportation costs due to rising fuel costs, climate change regulation and other factors may negatively impact our operating results. Terrorism and the uncertainty of war may harm our operating results. Our costs may change as a result of currency exchange rate fluctuations. Risks Related to Our Capital Structure We are leveraged, future cash flows may not be sufficient to meet our obligations and we might have difficulty obtaining more financing or refinancing our existing indebtedness on favorable terms. The terms of our financing agreement impose operating and financial restrictions on us, which may impair our ability to respond to changing business and economic conditions. Risks Related to Regulatory, Legislative and Legal Matters Current and future government regulation may negatively impact demand for our products and increase our cost of conducting business. The sale of firearms and ammunition is subject to strict regulation, which could affect our operating results. We may be subject to periodic litigation that may adversely affect our business and financial performance, including litigation related to products we sell and employment matters. Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

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1156388--3/2/2010--BIG_5_SPORTING_GOODS_CORP