Redbox 2008 Annual Report Download - page 16

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data security, such as the Payment Card Industry guidelines. Any breach of our security policies that compromises
consumer data or determination of non-compliance with applicable legal requirements or industry standards for
data security could expose us to regulatory enforcement actions, card association or other monetary fines or
sanctions, or contractual liabilities, limit our ability to provide our products and services, subject us to litigation and
damage our reputation.
Lack of consumer confidence, whether real or perceived, in our coin-counting machines could harm our
business.
The accuracy of the coin-counting functionality of our machines is important to consumers and our retailers.
The failure to maintain consumer confidence in our technology and systems could harm our business. Our inability
to collect the data from our coin-counting machines could lead to a delay in processing coins and crediting the
accounts of our retailers for vouchers that have already been redeemed. Any inaccuracy, loss or delay in collecting
or processing coin data could seriously harm our operations.
Our future operating results may fluctuate.
Our future operating results will depend significantly on our ability to continue to drive new and repeat use of
our coin-counting, DVD, entertainment, money transfer and E-payment products and services, our ability to
develop and commercialize new products and services and the costs incurred to do so, and our ability to successfully
integrate newer lines of business into our operations, including, for example, DVD and money transfer services. Our
operating results have a history of fluctuating and may continue to fluctuate based upon many factors, including:
• the transaction fees we charge consumers to use our services,
• the amount of service fees that we pay to our retailers,
• our ability to establish or maintain relationships with significant retailers on acceptable terms,
• the successful operation of our coin-counting, DVD, money transfer and E-payment network,
• the commercial success of our retailers, which could be affected by such factors as general economic
conditions, severe weather or strikes,
• fluctuations in revenue generated by our coin-counting, DVD, entertainment, money transfer and E-payment
products and services,
• fluctuations in operating expenses caused by various factors, including petroleum costs, labor costs and
transportation costs,
• our ability to effectively manage the product mix of our entertainment services equipment to maximize
consumer preferences,
• fluctuations in interest rates, which affects our debt service obligations,
• the timing of, and our ability to develop and successfully commercialize, new or enhanced products and
services,
• the level of product and price competition,
• activities of and acquisitions or announcements by competitors,
• the impact from any impairment of inventory, goodwill, fixed assets or intangibles related to our
acquisitions,
• fluctuations in consumer spending patterns, and
• relationships with manufacturers and suppliers.
In addition, we have historically experienced seasonality in our revenues, with higher revenues in the second
half of the year than in the first half of the year. Our Coin product line generally experiences its highest revenues in
the third calendar quarter, followed by the fourth calendar quarter, and relatively lower revenues in the first half of
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