1202273--3/31/2006--GOLFSMITH_INTERNATIONAL_HOLDINGS

related topics

{stock, price, operating}

{system, service, information}

{customer, product, revenue}

{product, market, service}

{operation, natural, condition}

{property, intellectual, protect}

{competitive, industry, competition}

{personnel, key, retain}

{cost, regulation, environmental}

{product, liability, claim}

{acquisition, growth, future}

Our sales and profits may be adversely affected if we or our suppliers fail to develop and introduce new and innovative products that appeal to our customers. Our success depends on our ability to compete with our existing major competitors and with new competitors that may enter the golf retail market. Our growth depends primarily upon our ability to open new stores and operate them profitably, and our failure to do so could have a material adverse effect on our business. If our key suppliers limit the amount or variety of products they sell to us or if they fail to deliver products to us in a timely manner and upon customary pricing terms, our business could be adversely affected. Our sales could decline if we are unable to process increased traffic or prevent security breaches on our Internet site and our network infrastructure. We lease almost all of our store locations. If we are unable to maintain those leases or locate alternative sites for our stores on terms that are acceptable us, our net revenues and profitability could be adversely affected. Our operating results are subject to seasonal fluctuations which could cause the market price of our common stock to fluctuate. Our stores are clustered in particular areas and adverse events in those areas may have a disproportionate effect on our business. Our comparable store sales may fluctuate, which could negatively impact our future operating performance. If we fail to accurately target the appropriate segment of the consumer catalog market or if we fail to achieve adequate response rates to our catalogs, our results of operations may suffer. If we lose the services of our Chief Executive Officer, we may not be able to manage our operations and implement our growth strategy effectively. We are controlled by one stockholder, which may give rise to a conflict of interest. We rely on our management information systems for inventory management, distribution and other functions. If our information systems fail to perform these functions adequately or if we experience an interruption in their operation, our business and results of operations could be adversely affected. Our profitability would be adversely affected if the operation of our Austin, Texas call center or distribution and fulfillment center were interrupted or shut down. A disruption in the service or a significant increase in the cost of our primary delivery service for our direct-to-consumer operations would have a material adverse effect on our business. An increase in the costs of mailing, paper, and printing our catalogs would adversely affect our profitability. If we are unable to enforce our intellectual property rights our net revenues and profits may decline. We may become subject to intellectual property suits that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products. We may be subject to product warranty claims or product recalls which could harm our business, results of operations, and reputation.

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1202273--3/31/2006--GOLFSMITH_INTERNATIONAL_HOLDINGS_INC