Classmates.com 2009 Annual Report Download - page 33

Table of Contents
We are dependent on third parties who fulfill orders and deliver goods and services to our customers and their failure to provide our
customers with high-quality products and customer service may harm our brands and could have a material adverse effect on our
business, financial condition, results of operations, and cash flows.
We believe that our success in promoting and enhancing our brands depends on our ability to provide our customers high-quality products
and a high level of customer service. Our business depends, in part, on the ability of our independent floral network members and third-party
suppliers who fulfill our orders to do so at high-quality levels. We work with our floral network members and third-party suppliers to develop
best practices for quality assurance; however, we generally do not directly control or continuously monitor any floral network member or third-
party supplier. The failure of our floral network members or third-party suppliers to fulfill orders to our customers' satisfaction, at an acceptable
level of quality and within the required timeframe, could adversely impact our brands and cause us to lose customers, which could have a
material adverse effect on our business, financial condition, results of operations, and cash flows.
Additionally, because we depend upon third parties for the delivery of our products to customers, strikes or other service interruptions
affecting these shippers could have an adverse effect on our ability to deliver our products on a timely basis. If any of our shippers are unable or
unwilling to deliver our products, we would have to engage alternative shippers which could increase our costs. A disruption in any of our
shippers' delivery of our products could cause us to lose customers or could increase our costs, which could have a material adverse effect on our
business, financial condition, results of operations, and cash flows.
The success of our business is dependent on our floral network members and on the financial performance of the retail floral industry.
A significant portion of our profitability is dependent on our floral network members. We have lost, and may continue to lose, floral
network members as a result of both our members choosing not to do business with us as well as declines in the number of local retail florists as
a result of economic factors and competition. If we lose a significant number of floral network members, or if we are not able to maintain or
increase revenues from our floral network members, our business, financial condition, results of operations, and cash flows may be materially
and adversely affected.
If the supply of flowers becomes limited, the price of these products could rise or these products may become unavailable, which could
result in our not being able to meet consumer demand and could cause an adverse effect on our business, financial condition, results of
operations, and cash flows.
Many factors, such as weather conditions, agricultural limitations and restrictions relating to the management of pests and disease, affect the
supply of flowers and the price of our floral products. If the supply of flowers available for sale is limited, the wholesale prices of flowers could
rise, which would cause us to increase our prices or reduce our profits. An increase in our prices could result in a decline in customer demand for
our floral products, which would decrease our revenues.
Alternatively, we may not be able to obtain high-quality flowers in an amount sufficient to meet customer demand. Even if available,
flowers from alternative sources may be of lesser quality or more expensive than those currently offered by us. A large portion of our supply of
flowers is sourced from Colombia, Ecuador and Holland.
The availability and price of our products could be affected by a number of other factors affecting suppliers, including:
•
severe weather;
•
import duties and quotas;
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