791450--3/16/2006--SPORTSMANS_GUIDE

related topics

{customer, product, revenue}

{product, market, service}

{system, service, information}

{cost, regulation, environmental}

{property, intellectual, protect}

{gas, price, oil}

{acquisition, growth, future}

{personnel, key, retain}

{provision, law, control}

{stock, price, operating}

{condition, economic, financial}

{regulation, change, law}

{regulation, government, change}

{tax, income, asset}

We must successfully anticipate changing consumer preferences and buying trends, order and manage our inventory to reflect customer demand and manage backorders or our net sales and profitability will be adversely affected. We depend on vendors and service providers to operate our business and any disruption of their supply of products and services could have an adverse impact on our net sales and profitability. Because we do not have long-term contracts with our suppliers, we may not have continued access to necessary products and our net sales may suffer. We will consider acquisitions as part of our growth strategy, and failure to adequately evaluate or integrate any acquisitions could harm our business. We source our private label merchandise internationally, which subjects us to tariffs, duties and currency fluctuations as well as other risks and could increase our costs and, therefore, decrease our gross profits as well as decrease our ability to ship our merchandise in a timely manner. Due to the seasonality of our business, our annual operating results would be adversely affected if our net sales during the third and fourth quarters were substantially below expectations. A decline in discretionary consumer spending could reduce our sales. If we fail to develop and maintain our proprietary mailing list, our sales and operating results would suffer. The loss of our senior management or other key personnel could harm our current and future operations and prospects. If use of the Internet, particularly with respect to online commerce, declines or does not continue to increase as rapidly as we anticipate, our sales may not grow to desired levels. Intense competition in the outdoor recreation and golf markets could reduce our sales and profitability. Our success depends on the continued popularity of outdoor recreation, particularly camping, golf and hunting, and the growth of the market for these products. If these activities decline in popularity, our sales could materially decline. TGW s sales and products may be adversely affected if its vendors fail to successfully develop and introduce new products. Temporary or permanent disruption at our fulfillment facilities could prevent timely shipment of customer orders and hurt our sales. We intend to increase our reliance on our vendors to fulfill orders, which may increase the risks associated with our fulfillment process and decrease our ability to control the timing of shipments and customer satisfaction. Our systems may not be able to support increased online and catalog sales, which would harm our business and operating results. Technological risks related to the Internet, including security and reliability issues, are largely outside our control and may hurt our reputation or sales. Our failure to protect confidential information of our customers and our network against security breaches could damage our reputation and brands and subject us to legal liability. If we are unable to provide satisfactory telephone-based customer support, we could lose customers. In order to increase our online sales and to sustain or increase profitability, we must attract online customers in a cost-effective manner. Fluctuations in the price of paper and a rise in postage rates may increase our operating costs and make our expenses difficult to predict. We guarantee lifetime returns for TSG purchases and more limited returns of TGW merchandise. Excessive merchandise returns could harm our operating results. Our failure to address risks associated with credit card fraud could damage our reputation and brands. We may incur costs from litigation or increased regulation relating to products that we sell, which could adversely affect our sales and profitability. Current and future government regulation may negatively impact demand for our products and our ability to conduct our business. Assertions by third parties of infringement by us of their intellectual property rights could result in significant costs and substantially harm our business and results of operations. Our sales may decrease if we are required to collect taxes on purchases. Government regulation of the Internet and online commerce is evolving and unfavorable changes could substantially harm our business and results of operations.

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791450--3/16/2006--SPORTSMANS_GUIDE_INC