768835--3/30/2009--BIG_LOTS

related topics

{system, service, information}

{condition, economic, financial}

{customer, product, revenue}

{interest, director, officer}

{acquisition, growth, future}

{capital, credit, financial}

{personnel, key, retain}

{operation, international, foreign}

{financial, litigation, operation}

{competitive, industry, competition}

{tax, income, asset}

{stock, price, share}

{regulation, change, law}

The current conditions in the financial markets combined with the current economic conditions (including falling home prices, increased levels of unemployment, foreclosures on mortgages, bankruptcies, and reduced access to credit) are extraordinary and give rise to risks and uncertainties that may adversely affect our capital resources, financial condition, results of operations, and liquidity including, but not limited to the following: If we are unable to continue to successfully execute our operating strategies, our operating performance could be significantly impacted. If we are unable to compete effectively in the highly competitive discount retail industry, our business and results of operations may be materially adversely affected. Further declines in general economic condition, consumer spending levels, and other conditions could lead to reduced consumer demand for our merchandise thereby materially adversely affecting our revenues and gross margin. Changes by vendors related to the management of their inventories may reduce the quantity and quality of brand-name closeout merchandise available to us or may increase our cost to acquire brand-name closeout merchandise, either of which may materially adversely affect our revenues and gross margin. We rely on vendors located in foreign countries for significant amounts of merchandise. Additionally, a significant amount of our domestically-purchased merchandise is manufactured abroad. Our business may be materially adversely affected by risks associated with international trade. Our inability to properly manage our inventory levels and offer merchandise that our customers want may materially adversely impact our business and financial performance. We may be subject to periodic litigation and regulatory proceedings, including Fair Labor Standards Act and state wage and hour class action lawsuits, which may adversely affect our business and financial performance. We may be subject to risks associated with changes in laws, regulations, and accounting standards that may adversely affect our business and financial performance. The bankruptcy of our formerly owned KB Toys business may adversely affect our business and financial performance. A significant decline in our operating profit and taxable income may impair our ability to realize the value of our long-lived assets and deferred tax assets. Our inability, if any, to comply with the terms of the 2004 Credit Agreement may have a material adverse effect on our capital resources, financial condition, results of operations, and liquidity. Disruption in credit markets and volatility in equity markets may affect our ability to access sufficient funding beyond the maturity of the 2004 Credit Agreement in October 2009. If we are unable to maintain or upgrade our information systems and software programs or if we are unable to convert to alternate systems in an efficient and timely manner, our operations may be disrupted or become less efficient. If we are unable to successfully execute our SAP for Retail system implementation, our operations may be disrupted or become less efficient. If we are unable to retain suitable store locations under favorable lease terms, our financial performance may be negatively affected. If we are unable to secure customer, employee, and company data, our reputation could be damaged and we could be subject to penalties or lawsuits. If we lose key personnel, it may have a material adverse impact on our future results of operations. The price of our common shares as traded on the New York Stock Exchange may be volatile. We also may be subject to a number of other factors which may, individually or in the aggregate, materially or adversely affect our business. These factors include, but are not limited to:

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768835--3/30/2009--BIG_LOTS_INC