937941--3/17/2008--PC_MALL

related topics

{product, market, service}

{system, service, information}

{customer, product, revenue}

{condition, economic, financial}

{regulation, government, change}

{operation, international, foreign}

{acquisition, growth, future}

{cost, operation, labor}

{personnel, key, retain}

{control, financial, internal}

{tax, income, asset}

{stock, price, operating}

{operation, natural, condition}

{financial, litigation, operation}

{property, intellectual, protect}

{cost, regulation, environmental}

Our success is dependent in part upon the ability of our vendors to develop and market products that meet changes in marketplace demand, as well as our ability to sell popular products from new vendors. We may not be able to maintain existing or build new vendor relationships, which may affect our ability to offer a broad selection of products at competitive prices and negatively impact our results of operations. Our narrow gross margins magnify the impact of variations in our operating costs and of adverse or unforeseen events on our operating results. We experience variability in our net sales and net income on a quarterly basis as a result of many factors. The transition of our business strategy to increasingly focus on commercial and public sector sales presents numerous risks and challenges, and may not improve our profitability or result in expanded market share. Our investments in our outbound phone-based sales force model may not improve our profitability or result in expanded market share. Our financial performance could be adversely affected if we are not able to retain and increase the experience of our sales force or if we are not able to maintain or increase their productivity. Existing or future government and tax regulations could expose us to liabilities or costly changes in our business operations, and could reduce demand for our products and services. Part of our business strategy includes the acquisition of other companies, and we may have difficulties integrating acquired companies into our operations in a cost-effective manner, if at all If purchased goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings. We may not be able to maintain profitability on a quarterly or annual basis. The effect of accounting rules for stock-based compensation may materially adversely affect our consolidated operating results, our stock price and our ability to hire, retain and motivate employees. Our operating results are difficult to predict and may adversely affect our stock price. If we fail to accurately predict our inventory risk, our gross margins may decline as a result of required inventory write downs due to lower prices obtained from older or obsolete products. We may need additional financing and may not be able to raise additional financing on favorable terms or at all, which could increase our costs, limit our ability to grow and dilute the ownership interests of existing stockholders. Rising interest rates could negatively impact our results of operations and financial condition. We may be subject to claims regarding our intellectual property, including our business processes, or the products we sell, any of which could result in expensive litigation, distract our management or force us to enter into costly royalty or licensing agreements. Costs and other factors associated with pending or future litigation could materially harm our business, results of operations and financial condition. We may fail to expand our merchandise categories, product offerings, websites and processing systems in a cost-effective and timely manner as may be required to efficiently operate our business. We may not be able to attract and retain key personnel such as senior management and information technology specialists. If we fail to achieve and maintain adequate internal controls, we may not be able to produce reliable financial reports in a timely manner or prevent financial fraud. Any inability to effectively manage our growth may prevent us from successfully expanding our business. Our advertising and marketing efforts may be costly and may not achieve desired results. Changes and uncertainties in the economic climate could negatively affect the rate of information technology spending by our customers, which would likely have an impact on our business. Increased product returns or a failure to accurately predict product returns could decrease our revenue and impact profitability. Our business may be harmed by fraudulent activities on our websites, including fraudulent credit card transactions. We may be liable for misappropriation of our customers personal information. Laws or regulations relating to privacy and data protection may adversely affect the growth of our Internet business or our marketing efforts. The security risks of e-commerce may discourage customers from purchasing goods from us. Credit card fraud could decrease our revenue and profitability. Our facilities and systems are vulnerable to natural disasters or other catastrophic events. We rely on independent shipping companies to deliver the products we sell. We may not be able to compete successfully against existing or future competitors, which include some of our largest vendors. Our success is tied to the continued use of the Internet and the adequacy of the Internet infrastructure. Our earnings and growth rate could be adversely affected by changes in economic and geopolitical conditions The success of our Canadian call center is dependent, in part, on our receipt of government labor credits. We are exposed to the risks of business and other conditions in the Asia Pacific region. The increasing significance of our foreign operations exposes us to risks that are beyond our control and could affect our ability to operate successfully. International operations expose us to currency exchange risk and we cannot predict the effect of future exchange rate fluctuations on our business and operating results. We are subject to risks associated with the evolution of, and consolidation within, our industry. Our success is in part dependent on the accuracy and proper utilization of our management information systems.

Full 10-K form ▸

937941--3/17/2008--PC_MALL_INC