Lumber Liquidators 2015 Annual Report Download - page 25

synthetic or inorganic flooring. In addition, hardwood flooring competes against carpet, vinyl sheet, vinyl tile,
ceramic tile, natural stone and other types of floor coverings. If consumer preferences shift toward types of
floor coverings other than hardwood flooring, we may experience decreased demand for our products.
All of these competitive factors may harm us and reduce our net sales and operating results.
If we are unable to access our credit facility or other sources of capital, our financial position, liquidity,
and results of operations could suffer,
We have relied on a bank credit facility to fund seasonal needs for working capital. Our continued access
to this facility depends on our ability to meet the conditions to borrowing, including that all representations
are true and correct at the time of the borrowing. Our failure to meet these requirements or obtain alternative
sources of capital could impact:
• our ability to fund working capital, capital expenditures and other general corporate purposes;
• our ability to meet liquidity needs; and
• our flexibility in planning for, or reacting to, changes in our business and the industry in which we
operate.
Risks Related to Our Information Technology
If our management information systems experience disruptions, it could disrupt our business and reduce
our net sales.
We depend on our management information systems to integrate the activities of our stores, website and
call center, to process orders, to respond to customer inquiries, to manage inventory, to purchase merchandise
and to sell and ship goods on a timely basis. We may experience operational problems with our information
systems as a result of system failures, viruses, computer ‘‘hackers’’ or other causes. We may incur significant
expenses in order to repair any such operational problems. Any significant disruption or slowdown of 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.
The selection and implementation of information technology initiatives may impact our operational
efficiency and productivity.
In order to better manage our business, we expect to invest in our information systems. In doing so, we
must select the correct investments and implement them in an efficient manner. The costs, potential problems
and interruptions associated with implementing technology initiatives could disrupt or reduce the efficiency of
our operations. Furthermore, these initiatives might not provide the anticipated benefits or provide them in a
delayed or more costly manner. Accordingly, issues relating to our selection and implementation of
information technology initiatives may negatively impact our business and operating results.
Any disruption of our website or our call center could disrupt our business and lead to reduced net 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 net sales and damage our reputation.
Further, the costs associated with such maintenance may exceed our estimations.
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