1363456--4/17/2009--Dollarama_Group

related topics

{debt, indebtedness, cash}

{cost, operation, labor}

{customer, product, revenue}

{investment, property, distribution}

{system, service, information}

{condition, economic, financial}

{operation, natural, condition}

{product, market, service}

{operation, international, foreign}

{acquisition, growth, future}

{cost, regulation, environmental}

{property, intellectual, protect}

{personnel, key, retain}

{competitive, industry, competition}

{product, liability, claim}

General economic conditions and volatility in the worldwide economy has adversely affected consumer spending, which may negatively affect our business. Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from meeting our debt obligations. We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under such indebtedness. Despite current indebtedness levels, we may still be able to incur substantially more debt, which could further exacerbate the risks described above. The indenture governing our senior floating rate deferred interest notes imposes significant operating restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions that may be in our interest. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly. There is no guarantee that our strategy to introduce products between the $1.00 and $2.00 dollar price range will be successful. As a discount retailer, we are particularly vulnerable to future increases in operating and merchandise costs. We may not be able to refresh our merchandise as often as we have done so in the past. An increase in the cost or a disruption in the flow of our imported goods may significantly decrease our sales and profits and have an adverse impact on our cash flows. We are dependent upon the smooth functioning of our distribution network. Natural disasters, unusual weather, pandemic outbreaks, boycotts and geo-political events or acts of terrorism could adversely affect our operations and financial results. We may be unable to obtain additional capacity for our warehouse and distribution centers. Our sales may be affected by seasonal fluctuations. Competition in the retail industry could limit our growth opportunities and reduce our profitability. Our business is dependent on our ability to obtain competitive pricing and other terms from our suppliers and the timely receipt of inventory. We may be unable to renew our store leases or find other locations or leases on favorable terms. If we experience significant disruptions in our information technology systems, our business may be adversely affected. We may not be able to successfully execute our growth strategy, particularly outside of our core markets of Ontario and Qu bec. We may not be able to achieve the anticipated growth in sales and operating income when we open new stores. We are subject to environmental regulations, and compliance with such regulations could require us to make expenditures. If we lose the services of our senior executives who possess specialized market knowledge and technical skills, it could reduce our ability to compete, to manage our operations effectively, or to develop new products and services. Fluctuations in the value of the Canadian dollar in relation to U.S. dollar may impact our financial condition and results of operations and may affect the comparability of our results between financial periods. We are controlled by funds managed by Bain Capital Partners, LLC, and their interest as equity holders may conflict with the interests of our creditors. We may not be able to protect our trademarks and other proprietary rights. Product recalls may adversely impact our operations and merchandise offerings.

Full 10-K form ▸

1363456--4/17/2009--Dollarama_Group_L.P.