Classmates.com 2008 Annual Report Download - page 30

Table of Contents
• potentially adverse tax consequences, including the complexities of foreign value-added taxes and restrictions on the repatriation
of earnings;
• increased financial accounting, tax and reporting burdens and complexities;
• disruption of our ongoing business and significant diversion of management attention from day-to-day responsibilities;
•
localization of our services, including translation into foreign languages and adaptation for local practices and regulatory
requirements;
• lack of familiarity with, and unexpected changes in, foreign regulatory requirements;
•
longer accounts receivable payment cycles;
•
difficulties in managing and staffing international operations;
• the burdens of complying with a wide variety of foreign laws and legal standards;
• political, social and economic instability abroad, terrorist attacks and security concerns in general; and
•
reduced or varied protection for intellectual property rights.
The occurrence of any one of these risks could negatively affect our international operations, our key business metrics, and our financial
results.
Our business could be shut down or severely impacted by a catastrophic event.
Our business could be materially and adversely affected by a catastrophic event. A disaster such as a fire, earthquake, flood, power loss,
terrorism, or other similar event, affecting any of our facilities, data centers or computer systems could result in a significant and extended
disruption of our operations and services. Any prolonged disruption of our services due to these or other events would severely impact our
business. We do not carry earthquake or flood insurance, and the property, business interruption and other insurance we do carry may not be
sufficient to cover, if at all, losses that may occur as a result of any events which cause interruptions in our services.
We cannot predict our future capital needs and we may not be able to secure additional financing.
We may need to raise additional funds in the future to fund our operations, for acquisitions of businesses, services or technologies or for
other purposes. Additional financing may not be available in a timely manner, on terms favorable to us, or at all. We incurred substantial
indebtedness, in connection with the acquisition of FTD. The terms of such indebtedness in addition to the degree to which we are leveraged,
will adversely affect our ability to obtain additional financing. In addition, the current extreme volatility of, and disruption in, the securities and
credit markets may restrict our ability to raise any such additional funds. If adequate funds are not available or not available when required and
in sufficient amounts or on acceptable terms, our business and future prospects may suffer.
We may stop paying, or reduce, quarterly cash dividends on our common stock.
The payment of future dividends is discretionary and is subject to determination by our Board of Directors each quarter following its review
of our financial condition, results of operations and cash flows and such other factors as are deemed relevant by our Board of Directors. The
terms of our indebtedness impose limitations on our ability to pay dividends. Commencing with the third quarter of 2008, we have decreased our
quarterly cash dividend from $0.20 per share of common stock to $0.10 per share of common stock. Changes in our business needs, including
working capital and funding for acquisitions, or a change in tax laws relating to dividends, among other factors, could cause our Board
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