1357227--3/14/2008--FGX_International_Holdings

related topics

{customer, product, revenue}

{product, market, service}

{operation, international, foreign}

{property, intellectual, protect}

{product, liability, claim}

{tax, income, asset}

{regulation, government, change}

{cost, regulation, environmental}

{personnel, key, retain}

{control, financial, internal}

{stock, price, operating}

{debt, indebtedness, cash}

We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more successfully, which could result in a loss of market share and as a result, a decrease in our net sales and gross profit. We rely on a few customers for a significant portion of our sales. The leverage exerted by those customers or the loss of or significant decrease in business from one or more of them may materially adversely affect us. Any interruption or termination of our relationships with our manufacturers could adversely affect our business, result in increased cost of goods sold or lead to an inability to deliver our products to our customers. We may be subject to product liability claims, or we may be required to recall our products. We face business, political, operational, financial and economic risks because a material portion of our operations is outside the United States, a material portion of our sales is to customers outside the United States and all of our manufacturers are outside the United States. Fluctuations in foreign currency exchange rates could harm our results of operations. We have indebtedness which may restrict our business and operations, adversely affect our cash flow and restrict our future access to sufficient funding to finance desired growth. Due to the uncertainty of the interpretation and application of existing U.S. federal income tax laws there is a risk that FGX International Holdings Limited could be treated as a U.S. corporation for U.S. federal income tax purposes, in which case we would be subject to higher taxes, which could materially adversely affect our results of operations and cash flows. We are exposed to risks relating to the evaluation of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. If we are unable to implement our business strategy successfully to expand our product offerings, our business may suffer. If we do not continue to negotiate and maintain favorable license arrangements, our growth prospects, sales and operating results could be adversely affected. Our business could be harmed if we fail to maintain proper inventory levels or if we misjudge the market for a particular product. If we fail to secure or protect our intellectual property rights, competitors may be able to use our intellectual property, which could weaken our competitive position, reduce our net sales and increase our costs. We may be involved in intellectual property litigation or subject to claims by third parties for alleged infringement of their intellectual property rights, which are costly to defend, could require us to pay damages and could limit our ability to use certain technologies in the future. Fluctuations in our operating results on a quarterly and annual basis could cause the market price of our ordinary shares to decline. An increase in product returns could negatively impact our operating results. Disruption in our distribution center could significantly lower our net sales and gross profit. We are heavily dependent on our current executive officers and management and the loss of any of them could adversely affect our ability to operate our business and to develop and market our products successfully. A shift by one or more of our customers to "pay-on-scan" payment programs could materially reduce our net sales, gross profit and cash flows. If we fail to comply with federal regulations imposed by the Food and Drug Administration or various state regulations, we could be subject to fines and penalties and our products could be suspended or removed from the market, each of which would cause our net sales and results of operations to decline. We may suffer negative publicity, be sued or have one or more of our license agreements or business relationships terminated if the manufacturers of our products violate labor laws or engage in practices that are viewed as unethical.

Full 10-K form ▸

1357227--3/14/2008--FGX_International_Holdings_LTD