Redbox 2008 Annual Report Download - page 21

• difficulties and expenses in assimilating the operations, products, technology, information systems or
personnel of an acquired company,
• stockholder dilution if an acquisition is consummated through an issuance of our securities,
• amortization expenses related to acquired intangible assets and other adverse accounting consequences,
• costs incurred in identifying and performing due diligence on potential targets that may or may not be
successful,
• impairment of relationships with employees, retailers and affiliates of our business and the acquired
business,
• entrance into markets in which we have no direct prior experience, and
• impairment of goodwill arising from our acquisitions and investments.
Recall of any of the products dispensed by our entertainment services machines or by the entertainment ser-
vices industry generally could adversely affect our entertainment services business.
Our entertainment services machines and the entertainment services industry generally, are subject to
regulation by the Consumer Product Safety Commission and similar state and international regulatory authorities.
The toys and other products dispensed from our entertainment services machines could be subject to involuntary
recalls and other actions by regulatory authorities. Concerns about product safety may lead us to voluntarily recall
or discontinue offering selected products. Potential or actual defects in any of our products distributed through our
entertainment services machines could result in the rejection of our entertainment services products by consumers,
damage to our reputation, lost sales, potential inventory valuation write-downs, excess inventory, diverted
development resources and increased customer service and support costs, any of which could harm our business.
Any such errors, potential or actual defects or recalls may not be covered by insurance or cause our insurance costs
to increase in future periods.
We may be subject to product liability claims if property or people are harmed by our products and services.
Some of the products we sell, especially through our entertainment services machines, may expose us to
product liability claims arising from personal injury, death or property damage. Any such product liability claim
may result in adverse publicity regarding us, our entertainment service machines and the products we sell. Even if
we successfully defend ourselves against or settle this type of claim, we could be forced to spend a substantial
amount of money in litigation or settlement expenses and our management could be required to spend valuable time
in dealing with these claims. Further, our vendors may not indemnify us against product liability. There is a risk that
claim awards, settlement payments, related costs or associated liabilities may exceed, or fall outside the scope of,
our insurance coverage and we cannot be certain that insurance will continue to be available to us on economically
reasonable terms, or at all. Any imposition, or even possible imposition, of product liability could harm our
business, financial condition and operating results.
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 twelve months ended February 16, 2009, the closing price of our common stock ranged from $15.71 to $38.90
per share. Our stock price may fluctuate significantly in response to a number of factors, including:
• the termination, non-renewal or re-negotiation of one or more retailer relationships,
• economic or other external factors, for example those relating to the current economic crisis,
• acquisition, merger, investment and disposition activities,
• operating results below market expectations and changes in, or our failure to meet, financial estimates of
securities analysts or our own guidance,
• trends and fluctuations in the use of our coin, DVD, entertainment, money transfer and E-payment services,
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