OfficeMax 2011 Annual Report Download - page 37

ITEM 1A. RISK FACTORS
Cautionary and Forward-Looking Statements
This Annual Report on Form 10-K contains forward-looking statements. Statements that are not historical or
current facts, including statements about our expectations, anticipated financial results and future business
prospects, are forward-looking statements. You can identify these statements by our use of words such as “may,”
“expect,” “believe,” “should,” “plan,” “anticipate” and other similar expressions. You can find examples of these
statements throughout this report, including “Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations” of this Form 10-K. We cannot guarantee that our actual results will be
consistent with the forward-looking statements we make in this report. We have listed below some of the
inherent risks and uncertainties that could cause our actual results to differ materially from those we project. We
do not assume an obligation to update any forward-looking statement.
Current macroeconomic conditions have had and may continue to have an impact on our business and
our financial condition. Economic conditions, both domestically and abroad, directly influence our operating
results. Current and future economic conditions that affect consumer and business spending, including the level
of unemployment, energy costs, inflation, availability of credit and the financial condition and growth prospects
of our customers may continue to adversely affect our business and the results of our operations. We may
continue to face challenges if macroeconomic conditions do not improve or if they worsen.
The impact of the weak economy on our customers could adversely impact the overall demand for our
products and services, which would have a negative effect on our revenues, as well as impact our customers’
ability to pay their obligations, which could have a negative effect on our bad debt expense and cash flows.
In addition, we sponsor noncontributory defined benefit pension plans covering certain terminated
employees, vested employees, retirees, and some active employees (the “Pension Plans”). The Pension Plans are
under-funded and we may be required to make contributions in subsequent years in order to maintain required
funding levels, which would have an adverse impact on our cash flows and our financial results. Additional
future contributions of common stock or cash to the Pension Plans, financial market performance and IRS
funding requirements could materially change these expected payments.
Our business may be adversely affected by the actions of and risks associated with our third-party
vendors. We use and resell many manufacturers’ branded items and services and are therefore dependent on the
availability and pricing of key products and services including ink, toner, paper and technology products. As a
reseller, we cannot control the supply, design, function, cost or vendor-required conditions of sale of many of the
products we offer for sale. Disruptions in the availability of these products or the products and services we
consume may adversely affect our sales and result in customer dissatisfaction. Further, we cannot control the cost
of manufacturers’ products, and cost increases must either be passed along to our customers or will result in
erosion of our earnings. Failure to identify desirable products and make them available to our customers when
desired and at attractive prices could have an adverse effect on our business and our results of operations. In
addition, a material interruption in service by the carriers that ship goods within our supply chain may adversely
affect our sales. Many of our vendors are small or medium sized businesses which are impacted by current
macroeconomic conditions, both in the U.S. and Asia. We may have no warning before a vendor fails, which
may have an adverse effect on our business and results of operations.
Our product offering also includes many of our own proprietary branded products. While we have focused
on the quality of our proprietary branded products, we rely on third party manufacturers for these products. Such
third-party manufacturers may prove to be unreliable, the quality of our globally sourced products may not meet
our expectations, such products may not meet applicable regulatory requirements which may require us to recall
those products, or such products may infringe upon the intellectual property rights of third parties. Furthermore,
economic and political conditions in areas of the world where we source such products may adversely affect the
availability and cost of such products. In addition, our proprietary branded products compete with other
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