CompUSA 2007 Annual Report Download - page 55

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obtain coverage, possibly making it more difficult for us to attract and retain qualified
members of our board of directors, particularly to serve on our audit committee.
• In the past we have been late filing our required financial reports. Any such delays in the
future could affect the trading of our stock.
We were late in the filing of our 2005 quarterly and annual reports and our 2006 quarterly
reports required under the Securities Exchange Act of 1934. Failure to file required reports on a
timely basis could result in the de-listing of the Company’s common stock by the New York
Stock Exchange. If we do not file our required annual and quarterly financial statements in the
prescribed time frames we would also be ineligible to file certain registration statements and
could be subject to SEC enforcement action.
• Our success is dependent upon the availability of credit and financing.
We require significant levels of capital in our business to finance accounts receivable and
inventory. We maintain credit facilities in the United States and in Europe to finance increases
in our working capital if available cash is insufficient. The amount of credit available to us at
any point in time may be adversely affected by the quality or value of the assets collateralizing
these credit lines. In addition, if we are unable to renew or replace these facilities at maturity
our liquidity and capital resources may be adversely affected. However, we currently have no
reason to believe that we will not be able to renew or replace our facilities when they reach
maturity.
• We have substantial international operations and we are exposed to fluctuations in currency
exchange rates and political uncertainties.
We operate internationally and as a result, we are subject to risks associated with doing
business globally. Risks inherent to operating overseas include:
• Changes in a country’s economic or political conditions
• Changes in foreign currency exchange rates
• Difficulties with staffing and managing international operations
• Unexpected changes in regulatory requirements
For example, we currently have operations located in numerous countries outside the United
States, and non-U.S. sales (Europe and Canada) accounted for approximately 40% of our
revenue during 2007. To the extent the U.S. dollar strengthens against the Euro and British
pound, our European revenues and profits will be reduced when translated into U.S. dollars.
• We may not be successful in integrating the business of CompUSA.
Our acquisition of selected assets of CompUSA involves the integration of those assets into our
existing business operating environment, including information systems. This will require us to
devote significant management attention and resources to integrate these business practices and
operations. There can be no assurance we will benefit from the addition of these retail stores.
The potential difficulties we face include, but are not limited to, the following:
• Integrating personnel from CompUSA and hiring new personnel while maintaining
focus on providing high quality service to our customers.
• Maintaining and building upon CompUSA’s existing customer base.
• Operating retail stores in new and unfamiliar locations.
• Complying with local laws and business practices.