Classmates.com 2010 Annual Report Download - page 27

Table of Contents
competencies, or expand our geographic reach, or that otherwise may be complementary to our existing businesses. However, acquiring
companies is a difficult process with many factors outside of our control. In addition, the FTD Credit Agreement imposes certain restrictions on
our ability to complete acquisitions and there is no assurance that we will be successful in completing additional acquisitions.
We have evaluated and expect to continue to evaluate, a wide variety of potential strategic transactions that we believe may complement
our current or future business activities. However, we cannot assure you that the anticipated benefits and synergies of an acquisition will
materialize or that any integration attempts will be successful. Acquiring a business, service or technology involves many operational and
financial risks, including risks relating to:
•
disruption of our ongoing business and significant diversion of resources and management time from day
-
to
-
day responsibilities;
•
acquisition financings that involve the issuance of potentially dilutive equity or the incurrence of debt;
• reduction of cash and other resources available for operations and other uses;
• exposure to risks specific to the acquired business, service or technology to which we are not currently exposed;
•
risks of entering markets in which we have little or no direct prior experience;
•
unforeseen obligations or liabilities;
• difficulty assimilating the acquired customer bases, technologies and operations;
• difficulty assimilating and retaining management and employees of the acquired business;
•
potential impairment of relationships with users, customers or vendors as a result of changes in management of the acquired
business or other factors;
• large write-offs either at the time of the acquisition or in the future, the incurrence of restructuring charges, the amortization of
identifiable intangible assets, and the impairment of amounts capitalized as goodwill, intangible assets and other long-
lived assets;
and
• lack of, or inadequate, controls, policies and procedures appropriate for a public company, and the time, cost and difficulties
related to the implementation of such controls, policies and procedures or the remediation of any deficiencies.
Any of these risks could harm our business, financial condition, results of operations, and cash flows.
In addition, an acquisition of a foreign business involves risks in addition to those set forth above, including risks associated with foreign
currency exchange rates, potentially unfamiliar economic, political and regulatory environments and integration difficulties due to language,
cultural and geographic differences.
FTD has a substantial amount of indebtedness which could adversely affect our ability to raise additional capital to fund operations, our
flexibility in operating our business and our ability to react to changes in the economy or our industry, and prevent us from satisfying our
debt obligations.
FTD has a substantial amount of indebtedness which could have important consequences for our business and financial condition. For
example:
•
if we fail to meet payment obligations or otherwise default under the FTD Credit Agreement, the lenders will have the right to
accelerate the indebtedness and exercise other rights and remedies against us;
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