Dick's Sporting Goods 2015 Annual Report Download - page 17

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We rely on a single third party provider to maintain and operate certain aspects of our www.DICKS.com operations, and
disruptions with the provider or in the services it provides to us could materially affect our reputation, operations or
financial results.
We have contracted with a single third party to operate and host our www.DICKS.com eCommerce website and provide related
fulfillment and customer service. We rely on that party's operational, privacy and security procedures and controls to operate
and host our www.DICKS.com eCommerce business. Failure by such third party to adequately service these aspects of our
www.DICKS.com eCommerce business could result in a prolonged disruption that affects our customers' ability to utilize our
website or receive product in a timely manner. As a result, we may lose customer sales and/or experience increased costs,
which could materially affect our reputation, operations or financial results.
Our ability to operate and expand our business and to respond to changing business and economic conditions will be
dependent upon the availability of adequate capital. The terms of our senior secured revolving credit facility impose certain
restrictions that may impair our ability to access sufficient capital.
The operation and growth of our business, including opening new stores and expanding our eCommerce business, and our
ability to respond to changing business and economic conditions depend on the availability of adequate capital, which in turn
depends on cash flow generated by our business and, if necessary, the availability of equity or debt capital. Our current senior
secured revolving credit facility contains provisions that limit our ability to incur additional indebtedness or make substantial
asset sales, which might otherwise be used to finance our operations. In the event of our insolvency, liquidation, dissolution or
reorganization, the lenders under our senior secured revolving credit facility would be entitled to payment in full from our
assets before distributions, if any, were made to our stockholders.
If we are unable to generate sufficient cash flows from operations in the future, and if availability under our current senior
secured revolving credit facility is not sufficient, we may have to obtain additional financing. We cannot provide assurance that
we could obtain refinancing or additional financing on favorable terms or at all. Our liquidity or access to capital could also be
adversely affected by unforeseen changes in the financial markets and global economy.
We are subject to costs and risks associated with a complex regulatory, compliance and legal environment, including
increased or changing laws and regulations affecting our business, particularly those relating to the sale of consumer
products and firearms and ammunition, and those relating to data protection and privacy.
We operate in a complex regulatory and legal environment that exposes us to compliance and litigation risks that could
materially affect our operations and financial results. These laws may change, sometimes significantly, as a result of political,
economic or social events. Some of the federal, state or local laws and regulations that affect us include those relating to
consumer products, product liability or consumer protection; eCommerce, data protection and privacy; advertisement and
marketing; labor and employment; firearms, ammunition, knives, food items or other regulated products; custom or import; and
intellectual property.
In addition to potential damage to our reputation and brand, failure to comply with applicable federal, state and local laws and
regulations such as those outlined above may result in our being subject to claims, lawsuits, fines and adverse publicity that
could have a material adverse effect on our business, results of operations and financial condition.
We depend on our suppliers, distributors and manufacturers to provide us with sufficient quantities of products in a timely
fashion.
We purchase merchandise from approximately 1,600 vendors. In fiscal 2015, purchases from Nike and Under Armour
represented approximately 20% and 12%, respectively, of our merchandise purchases. Although in fiscal 2015 purchases from
no other vendor represented 10% or more of our total purchases, our dependence on our principal suppliers involves risk. We
generally do not have long-term written contracts with our major suppliers that would require them to continue supplying us
with merchandise. If any of our key vendors fails to supply us with products, as a result of supply chain disruptions or other
causes, or continue to develop new products that create consumer demand, we may not be able to meet the demands of our
customers and our revenue could materially decline. Moreover, many of our suppliers provide us with incentives, such as return
privileges, volume purchasing allowances and cooperative advertising. A decline or discontinuation of these incentives could
reduce or eliminate our profit margins.
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