Radio Shack 2008 Annual Report Download - page 19

property rights in foreign countries, work stoppages, transportation capacity and costs, tariffs, political or
financial instability, foreign currency exchange rates, monetary, tax and fiscal policies, inflation, deflation,
outbreak of pandemics and other factors relating to foreign trade are beyond our control. These and other
issues affecting our vendors could materially adversely affect our sales and profitability.
Our business is heavily dependent upon information systems, which could result in higher
maintenance costs and business disruption.
Our business is heavily dependent upon information systems, given the number of individual transactions
we process each year. Our information systems include an in-store point-of-sale system that provides
information used to track sales performance, inventory replenishment, e-commerce product availability,
product margin information and customer information. In addition, we are in the process of upgrading our
in-store point-of-sale system and related processes. These systems are complex and require integration
with each other, with some of our service providers, and with business processes, which may increase the
risk of disruption.
Our information systems are also subject to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, security breaches, catastrophic events and usage errors
by our employees. If we encounter damage to our systems, difficulty implementing new systems or
maintaining and upgrading current systems, then our business operations could be disrupted, our sales
could decline and our expenses could increase.
Failure to protect the integrity and security of our customers’ information could expose us to
litigation, as well as materially damage our standing with our customers.
Increasing costs associated with information security, including increased investments in technology, the
costs of compliance with consumer protection laws, and costs resulting from consumer fraud could cause
our business and results of operations to suffer materially. Additionally, if a significant compromise in the
security of our customer information, including personal identification data, were to occur, it could have a
material adverse effect on our reputation, business, operating results and financial condition, and could
increase the costs we incur to protect against such security breaches.
We are subject to other litigation risks and may face liabilities as a result of allegations and
negative publicity.
Our operations expose us to litigation risks, such as class action lawsuits involving employees, consumers
and shareholders. For example, from time to time putative class actions have been brought against us
relating to various labor matters. Defending against lawsuits and other proceedings may involve significant
expense and divert management’s attention and resources from other matters. In addition, if any lawsuits
were brought against us and resulted in a finding of substantial legal liability, it could cause significant
reputational harm to us and otherwise materially adversely affect our business, financial condition or
results of operations.
Any terrorist activities in the U.S., as well as the international war on terror, could adversely affect
our results of operations.
A terrorist attack or series of attacks on the United States could have a significant adverse impact on the
United States’ economy. This downturn in the economy could, in turn, have a material adverse effect on
our results of operations. The potential for future terrorist attacks, the national and international responses
to terrorist attacks, and other acts of war or hostility could cause greater uncertainty and cause the
economy to suffer in ways that we cannot predict.
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