Radio Shack 2008 Annual Report Download - page 17

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Our inability to effectively manage our receivable levels, particularly with our service providers,
could adversely affect our financial results.
We maintain significant receivable balances from various service providers (i.e. Sprint Nextel and AT&T)
consisting of commissions, residuals and marketing development funds. Changes in the financial markets
or financial condition of these service providers could cause a delay or failure in receiving these funds.
Failure to receive these payments could have an adverse affect on our financial results or financial
condition.
Our inability to effectively manage our inventory levels, particularly excess or inadequate amounts
of inventory, could adversely affect our financial results.
We source inventory both domestically and internationally, and our inventory levels are subject to a
number of factors, some of which are beyond our control. These factors, including technology
advancements, reduced consumer spending and consumer disinterest in our product offerings, could lead
to excess inventory levels. Additionally, we may not accurately assess appropriate product life cycles or
end-of-life products, leaving us with excess inventory. To reduce these inventory levels, we may be
required to lower our prices, adversely impacting our financial results.
Alternatively, we may have inadequate inventory levels for particular items, including popular selling
merchandise, due to factors such as unanticipated high demand for certain products, unavailability of
products from our vendors, import delays, labor unrest, untimely deliveries or the disruption of
international, national or regional transportation systems. The effect of the occurrence of any of these
factors on our inventory supply could adversely impact our financial results or financial condition.
Our inability to attract, retain and grow an effective management team or changes in the cost or
availability of a suitable workforce to manage and support our operating strategies could cause
our operating results to suffer.
Our success depends in large part upon our ability to attract, motivate and retain a qualified management
team and employees. Qualified individuals needed to fill necessary positions could be in short supply. The
inability to recruit and retain such individuals on a continuous basis could result in high employee turnover
at our stores and in our company overall, which could have a material adverse effect on our business and
financial results. Additionally, competition for qualified employees requires us to continually assess our
compensation structure. Competition for qualified employees has required, and in the future could require,
us to pay higher wages to attract a sufficient number of qualified employees, resulting in higher labor
compensation expense. In addition, mandated changes in the federal minimum wage may adversely
affect our compensation expense.
Our inability to successfully identify and enter into relationships with developers of new
technologies or the failure of these new technologies to be adopted by the market could impact
our ability to increase or maintain our sales and profitability. Additionally, the absence of new
services or products and product features in the merchandise categories we sell could adversely
affect our sales and profitability.
Our ability to maintain and increase revenues depends, to a large extent, on the periodic introduction and
availability of new products and technologies. If we fail to identify these new products and technologies, or
if we fail to enter into relationships with their developers prior to widespread distribution within the market,
our sales and profitability could be adversely affected. Any new products or technologies we identify may
have a limited sales life.
Furthermore, it is possible that new products or technologies will never achieve widespread consumer
acceptance, also adversely affecting our sales and profitability. Finally, the lack of innovative consumer
electronics products, features or services that can be effectively featured in our store model could also
impact our ability to increase or maintain our sales and profitability.
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