863821--4/12/2006--RESTORATION_HARDWARE

related topics

{stock, price, operating}

{product, market, service}

{stock, price, share}

{operation, international, foreign}

{condition, economic, financial}

{system, service, information}

{cost, operation, labor}

{debt, indebtedness, cash}

{competitive, industry, competition}

{customer, product, revenue}

{operation, natural, condition}

{provision, law, control}

{personnel, key, retain}

{regulation, change, law}

{capital, credit, financial}

Our success depends upon consumer responses to our product offerings; if we fail to successfully anticipate changes in consumer trends or consumers otherwise do not respond to our product offerings, our results of operations may be adversely affected. Our success is highly dependent on improvements to our planning, order acceptance and fulfillment and supply chain processes. Because our revenue is subject to seasonal fluctuations, significant deviations from projected demand for products in our inventory during a selling season could have a material adverse effect on our financial condition and results of operations. Increased catalog and other marketing expenditures without increased revenue may have a negative impact on our operating results. Our quarterly results fluctuate due to a variety of factors and are not a meaningful indicator of future performance. Fluctuations in comparable store sales may cause our revenue and operating results from period-to-period to vary. We depend on a number of key vendors to supply our merchandise and provide critical services, and the loss of any one of our key vendors may result in a loss of sales revenue and significantly harm our operating results. Operational difficulties in any of our distribution and order acceptance and fulfillment operations would materially affect our operating results. Labor activities could cause labor relations difficulties for us. We are dependent on external funding sources, including the terms of our revolving credit facility, which may not make available to us sufficient funds when we need them. Because our business requires a substantial level of liquidity, we are dependent upon a revolving credit facility with certain restrictive covenants that limit our flexibility. Future increases in interest and other expense may impact our future operations. We are subject to trade restrictions and other risks associated with our dependence on foreign imports for our merchandise. As an importer we are subject to the effects of currency fluctuations related to our purchases of foreign merchandise. Rapid growth in our direct-to-customer business may not be sustained and may not generate a corresponding increase in profits to our business. We depend on key personnel and could be affected by the loss of their services because of the limited number of qualified people in our industry. Regulatory changes may increase our costs. Changes in general economic conditions affect consumer spending and may significantly harm our revenue and results of operations. We face an extremely competitive specialty retail business market. Terrorist attacks, war, natural disasters and other catastrophic events may negatively impact all aspects of our operations, revenue, costs and stock price. Our common stock price may be volatile. Future sales of our common stock in the public market could adversely affect our stock price and our ability to raise funds in new equity offerings. Newly adopted accounting regulations that require companies to expense stock options will result in a decrease in our earnings and our stock price may decline. We are subject to anti-takeover provisions and other terms and conditions that could delay or prevent an acquisition and could adversely affect the price of our common stock.

Full 10-K form ▸

863821--4/12/2006--RESTORATION_HARDWARE_INC