Circuit City 2005 Annual Report Download - page 15

Download and view the complete annual report

Please find page 15 of the 2005 Circuit City annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 162

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162

Other factors that may affect our future results of operations and financial condition include, but are not limited
to, unanticipated developments in any one or more of the following areas, as well as other factors which may be
detailed from time to time in our Securities and Exchange Commission filings:
Readers are cautioned not to place undue reliance on any forward looking statements contained in this report,
which speak only as of the date of this report. We undertake no obligation to publicly release the result of any revisions
to these forward looking statements that may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unexpected events.
Item 1B. Unresolved Staff Comments.
could increase our cost of goods sold or selling, general and administrative expenses and have an adverse
effect on results of operations and cash flows.
• We may encounter risks in connection with sales of our web-hosted software application.
In 2004 we introduced our web-based and hosted, on-demand software suite of products, marketed as
ProfitCenter Software. We have a limited operating history with this type of product offering and may
encounter risks inherent in the software industry, including but not limited to:
•
•
•
•
•
•
•
•
Errors or security flaws in our product
Technical difficulties which we can not resolve on a timely or cost-effective basis,
Inability to provide the level of service we commit to
Inability to deliver product upgrades and enhancements
Delays in development
Inability to hire and retain qualified technical personnel
Impact of privacy laws on the use of our product
Exposure to claims of infringement of intellectual property rights
•
Restrictions and covenants in our credit facility may limit our ability to enter into certain transactions.
Our United States/United Kingdom combined revolving credit agreement contains covenants restricting or
limiting our ability to, among other things:
•
•
•
•
incur additional debt
create or permit liens on assets
make capital expenditures or investments
pay dividends
If we fail to comply with the covenants and other requirements set forth in the agreement, we will have to
negotiate a waiver agreement with the lenders. Failure to enter into such a waiver agreement could
adversely affect the availability of financing to us which could materially impact our operations.
•
•
•
•
•
•
•
•
the effect on us of volatility in the price of paper and periodic increases in postage rates
significant changes in the computer products retail industry, especially relating to the distribution
and sale of such products
timely availability of existing and new products
risks involved with e-commerce, including possible loss of business and customer
dissatisfaction if outages or other computer-related problems should preclude customer
access to us
risks associated with delivery of merchandise to customers by utilizing common delivery
services such as the United States Postal Service and United Parcel Service, including
possible strikes and contamination
borrowing costs or availability
pending or threatened litigation and investigations
the availability of key personnel