Redbox 2003 Annual Report Download - page 13

corporate partners, these parties may breach these agreements, we may have inadequate remedies for any breach
and our trade secrets may otherwise become known or be discovered independently by our competitors. The
failure to protect our intellectual property rights effectively or to avoid infringing the intellectual property rights
of others could seriously harm our business, financial condition and results of operations. In addition, if we
instigate litigation to enforce our patents or proprietary rights, to protect our trade secrets or to determine the
validity and scope of other parties’ proprietary rights, such litigation could cause us to spend significant financial
and management resources.
Future acquisitions and investments may harm our business. As part of our business strategy, we may
seek to acquire or invest in businesses, products or technologies that we feel could complement or expand our
business. If we identify an appropriate acquisition or investment opportunity, we may not be able to negotiate the
terms of that transaction successfully, finance it, or effectively integrate it into our existing business and
operations. Further, the negotiation of potential acquisitions, as well as the integration of an acquired business,
will divert management time and other resources. We may have to use a substantial portion of our available cash
or incur additional indebtedness to consummate a transaction. On the other hand, if we consummate acquisitions
through an exchange of our securities, our stockholders could suffer significant dilution. In addition, we cannot
assure you that any particular transaction, even if successfully completed, will ultimately benefit our business.
Our future operating results may fluctuate. Our future operating results will depend significantly on our
ability to continue to drive new and repeat customer utilization of our coin-counting service. Our future operating
results also may fluctuate based upon many other factors, including:
• the transaction fee we charge consumers to use our service,
• the amount of our service fee that we pay to our retail partners,
• our ability to maintain relationships with significant retail partners,
• the commercial success of our retail partners, which could be affected by such factors as severe weather
or strikes,
• the timing of, and our ability to, develop and successfully commercialize product enhancements and new
products,
• the level of product and price competition,
• our success in maintaining and expanding our network and managing our growth,
• the successful operation of our coin processing network,
• our ability to control costs, and
• activities of and acquisitions by competitors.
Our stock price has been and may continue to be volatile. Our stock price has fluctuated substantially
since our initial public offering in July 1997. For example, during the year ended December 31, 2003, the price of
our common stock ranged from $11.65 to $25.79 per share. The market price of our stock could decline from
current levels or continue to fluctuate. The market price of our stock may be significantly affected by the
following factors:
• the termination or non-renewal of one or more retail partner relationships,
• operating results below market expectations and changes in, or our failure to meet, financial estimates by
securities analysts or our own guidance,
• trends and fluctuations in the use of our Coinstar units,
• period-to-period fluctuations in our financial results,
• release of analyst reports,
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