Classmates.com 2010 Annual Report Download - page 30

Table of Contents
attribution from independent third-
party service providers. Such legislation or initiatives could result in the imposition of additional sales and use
taxes, or the payment of state income or other taxes, on certain transactions conducted over the Internet. If such legislation is enacted, or such
initiatives are instituted, and upheld by the courts, the legislation or initiatives could subject us to substantially increased tax liabilities for past
and future sales or state income or other taxes, require us to collect additional sales and use taxes, cause our future sales to decrease, otherwise
negatively impact our businesses, and thus have a material adverse affect on us.
We face risks relating to operating and doing business internationally that could adversely affect our businesses and results of operations.
Our businesses operate in a number of countries outside the U.S. Conducting international operations involves risks and uncertainties,
including:
• adverse fluctuations in currency exchange rates;
•
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 collection cycles;
• difficulties in managing and staffing international operations;
• the burdens of complying with a wide variety of foreign laws, regulations and legal and regulatory standards;
•
political, social and economic instability abroad, terrorist attacks and security concerns in general; and
•
reduced or varied protection for intellectual property and proprietary rights.
The occurrence of any one of these risks could negatively affect our international operations, our key business metrics, and our financial
results.
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.
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. A decline in our cash flows, changes in our business needs, including working capital and funding for business
initiatives or acquisitions, or a change in tax laws relating to dividends, among other factors, could cause our Board of Directors to decide to
cease the payment of, or further reduce, dividends in the future. We cannot assure you that we will not decrease or discontinue quarterly cash
dividends, and if we do, our stock price could be negatively impacted.
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