Lumber Liquidators 2008 Annual Report Download - page 22

We may experience operational problems with our information systems as a result of system failures,
viruses, computer “hackers” or other causes. Any significant disruption or slowdown of our systems, including a
disruption or slowdown caused by our failure to successfully upgrade our systems, could cause information,
including data related to customer orders, to be lost or delayed, which could result in delays in the delivery of
products to our stores and customers or lost sales. Moreover, our entire corporate network, including our
telephone lines, is on an Internet-based network. Accordingly, if our network is disrupted, we may experience
delayed communications within our operations and between our customers and ourselves, and may not be able to
communicate at all via our network, including via telephones connected to our network.
We may in the future be unable to develop or acquire technology that meets our needs or those of our
customers, or have insufficient resources to make necessary investments in technology. Thus, if our information
systems are inadequate to handle our growth or if changes in technology cause our information systems to
become obsolete, it could disrupt or otherwise harm our operations.
We are considering a replacement of our information systems that might impact our operations.
We are in the process of evaluating substantial modifications to enhance our management information
systems, including management reporting, inventory and purchasing management, financial reporting and
forecasting. While our existing systems may be satisfactory, we believe that these modifications will be
necessary to support our long-term growth plans. There are inherent risks associated with the selection and
upgrading of information systems including business and operational disruptions as well as potential delays and
cost overruns. Further, if we fail to select appropriate upgrades to our systems or effectively plan for their
implementation, our operations and financial condition could be harmed.
Any disruption of our website or our call center could disrupt our business and lead to reduced sales and
reputational damage.
Our website and our call center are integral parts of our integrated multi-channel strategy. Customers use
our website and our call center as information sources on the range of products available to them and to order our
products, samples or catalogs. Our website in particular is vulnerable to certain risks and uncertainties associated
with the Internet, including changes in required technology interfaces, website downtime and other technical
failures, security breaches and consumer privacy concerns. If we cannot successfully maintain our website and
call center in good working order, it could reduce our sales and damage our reputation.
Our success depends substantially upon the continued retention of certain key personnel.
We believe that our success has depended and continues to depend to a significant extent on the efforts and
abilities of our senior management team and our board of directors. Our failure to retain members of that team
could impede our ability to build on the efforts they have undertaken with respect to our business. Specifically,
the loss of Tom Sullivan, our founder (or “Founder”) and the chairman of our board of directors, could harm us.
Under his guidance, we experienced rapid growth and established ourselves as a leading company in the industry.
Tom continues to have an active role in determining our strategic direction, and we believe that if we no longer
had access to his product knowledge and relationships with our suppliers, it could adversely affect an important
competitive advantage. In addition, the loss of Jeff Griffiths, our president and chief executive officer, or Dan
Terrell, our chief financial officer, could harm us, as we rely on their significant experience with reporting
companies and the retail industry.
Our success depends upon our ability to attract, train and retain highly qualified managers and staff.
Our success depends in part on our ability to attract, hire, train and retain qualified managers and staff.
Buying hardwood flooring is an infrequent event, and typical consumers have very little knowledge of the range,
characteristics and suitability of the products available to them before starting the purchasing process. Therefore,
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