Under Armour 2015 Annual Report Download - page 18

• the availability, integration and effective operation of information systems and other technology, as
well as any potential interruption of such systems or technology;
• risks related to data security or privacy breaches;
• our ability to raise additional capital required to grow our business on terms acceptable to us;
• our potential exposure to litigation and other proceedings; and
• our ability to attract and retain the services of our senior management and key employees.
The forward-looking statements contained in this Form 10-K reflect our views and assumptions only as of
the date of this Form 10-K. We undertake no obligation to update any forward-looking statement to reflect events
or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated
events.
Our results of operations and financial condition could be adversely affected by numerous risks. You
should carefully consider the risk factors detailed below in conjunction with the other information contained
in this Form 10-K. Should any of these risks actually materialize, our business, financial condition and future
prospects could be negatively impacted.
During a downturn in the economy, consumer purchases of discretionary items are affected, which could
materially harm our sales, profitability and financial condition.
Many of our products may be considered discretionary items for consumers. Factors affecting the level of
consumer spending for such discretionary items include general economic conditions, the availability of
consumer credit and consumer confidence in future economic conditions. Uncertainty in global economic
conditions continues, and trends in consumer discretionary spending remain unpredictable. However, consumer
purchases of discretionary items tend to decline during recessionary periods when disposable income is lower or
during other periods of economic instability or uncertainty. A downturn in the economy in markets in which we
sell our products may materially harm our sales, profitability and financial condition.
If the financial condition of our customers declines, our financial condition and results of operations could
be adversely impacted.
We extend credit to our customers based on an assessment of a customer’s financial condition, generally
without requiring collateral. We face increased risk of order reduction or cancellation when dealing with
financially ailing customers or customers struggling with economic uncertainty. During weak economic
conditions, customers may be more cautious with orders or may slow investments necessary to maintain a high
quality in-store experience for consumers, which may result in lower sales of our products. In addition, a slowing
economy in our key markets or a continued decline in consumer purchases of sporting goods generally could
have an adverse effect on the financial health of our customers. From time to time certain of our customers have
experienced financial difficulties. To the extent one or more of our customers experience significant financial
difficulty, insolvency or cease operations, this could have an adverse effect on our sales, our ability to collect on
receivables and our financial condition.
A decline in sales to, or the loss of, one or more of our key customers could result in a material loss of net
revenues and negatively impact our prospects for growth.
In 2015, approximately 11.5% of our net revenues were generated from sales to our largest customer. We
currently do not enter into long term sales contracts with this customer or our other key customers, relying
instead on our relationships with these customers and on our position in the marketplace. As a result, we face the
risk that these key customers may not increase their business with us as we expect, or may significantly decrease
their business with us or terminate their relationship with us. The failure to increase our sales to these customers
as much as we anticipate would have a negative impact on our growth prospects and any decrease or loss of these
key customers’ business could result in a material decrease in our net revenues and net income.
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