1361709--3/19/2010--Susser_Holdings

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{condition, economic, financial}

{cost, regulation, environmental}

{product, market, service}

{operation, natural, condition}

{tax, income, asset}

{financial, litigation, operation}

{personnel, key, retain}

{regulation, government, change}

{regulation, change, law}

{system, service, information}

{acquisition, growth, future}

{cost, operation, labor}

{gas, price, oil}

{operation, international, foreign}

{competitive, industry, competition}

The convenience store industry is highly competitive and impacted by new entrants and our failure to effectively compete could result in lower sales and lower margins. Historical prices for motor fuel have been volatile and significant changes in such prices in the future may adversely affect our profitability. Wholesale cost increases in tobacco products, including excise tax increases on cigarettes, could adversely impact our revenues and profitability. Future legislation and campaigns to discourage smoking may have a material adverse effect on our revenues and gross profit. We may incur costs or liabilities as a result of litigation or adverse publicity resulting from concerns over food quality, health or other issues that could cause guests to avoid our restaurants. The wholesale motor fuel distribution industry is characterized by intense competition and fragmentation and our failure to effectively compete could result in lower margins. The operation of our stores in close proximity to our dealers stores may result in direct competition which may affect the relationship with our dealers. Decreases in consumer spending resulting from changes in local economic conditions or travel and tourism in the areas we serve could adversely impact our business. The industries in which we operate are subject to seasonal trends, which may cause our operating costs to fluctuate, affecting our cash flow. Our business is sensitive to economic conditions that impact consumer spending. Severe weather could adversely affect our business by damaging our facilities, our communications network, or our suppliers or lowering our sales volumes. Our concentration of stores along the U.S.-Mexico border increases our exposure to certain cross-border risks that could adversely affect our business and financial condition by lowering our sales revenues. Our growth depends in part on our ability to open and profitably operate new retail convenience stores and to successfully integrate acquired sites and businesses in the future. Compliance with and liability under state and federal environmental regulation, including those that require investigation and remediation activities, may require significant expenditures or result in liabilities that could have a material adverse effect on our business. The dangers inherent in the storage and transport of motor fuel could cause disruptions and could expose us to potentially significant losses, costs or liabilities. Our motor fuel operations are subject to inherent risk, and insurance, if available, may not adequately cover any such exposure. The occurrence of a significant event that is not fully insured could have a material adverse effect on our business. Pending or future consumer or other litigation could adversely affect our financial condition and results of operations. Failure to comply with state laws regulating the sale of alcohol and cigarettes may result in the loss of necessary licenses and the imposition of fines and penalties on us, which could have a material adverse effect on our business. Failure to comply with the other state and federal regulations we are subject to may result in penalties or costs that could have a material adverse effect on our business. We depend on one principal supplier for a substantial portion of our merchandise inventory. A disruption in supply or a change in our relationship could have a material adverse effect on our business. We currently depend on two principal suppliers for the majority of our motor fuel. A disruption in supply or an unexpected change in our supplier relationships could have a material adverse effect on our business. We depend on one principal transportation provider for the third-party transportation of a large portion of motor fuel. Thus, a change of providers or a significant change in our relationship could have a material adverse effect on our business. We rely on our suppliers to provide trade credit terms to adequately fund our on-going operations and product purchases. Because we depend on our senior management s experience and knowledge of our industry, we could be adversely affected were we to lose key members of our senior management team. We compete with other businesses in our market with respect to attracting and retaining qualified employees. Terrorist attacks and threatened or actual war may adversely affect our business. Our substantial indebtedness may impair our financial condition. Despite current indebtedness levels, we may still incur more debt. This could further exacerbate the risks associated with our substantial indebtedness. We depend on cash flow generated by our subsidiaries. The restrictive covenants in our revolving credit and term loan facilities and the indenture governing our 10 5 / 8 % senior notes may affect our ability to operate our business successfully. We rely on our information technology systems to manage numerous aspects of our business, and a disruption of these systems could adversely affect our business. Changes in accounting standards, policies, estimates or procedures may impact our reported financial condition or results of operations. If future characteristics indicate that goodwill or indefinite lived tangible assets are impaired, there could be a requirement to write down amounts of goodwill and indefinite lived intangible assets and record impairment charges.

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1361709--3/19/2010--Susser_Holdings_CORP