CompUSA 2011 Annual Report Download - page 10

Our Board of Directors has adopted the following corporate governance documents with respect to the Company (the “Corporate Governance
Documents”):
In accordance with the listing standards of the New York Stock Exchange, each of the Corporate Governance Documents is available on our Company
website (www.systemax.com).
Item 1A. Risk Factors.
There are a number of factors and variables described below that may affect our future results of operations and financial condition. Other factors of
which we are currently not aware or that we currently deem immaterial may also affect our results of operations and financial position.
Risks Related to the Economy and Our Industries
Current economic conditions may cause the loss of consumer confidence in the Company’s markets which may result in a decrease of
spending in the categories of products we sell. With conditions in the market for technology products remaining highly competitive,
reductions in our selling prices, as we have experienced in recent years, would adversely affect our revenues and profits. It is also possible
that as manufacturers react to the marketplace they may reduce manufacturing capacity or allocations to their customers creating shortages
of product. Both we and our customers are subject to global political, economic and market conditions, including inflation, interest rates,
energy costs, the impact of natural disasters, military action and the threat of terrorism. Our consolidated results of operations are directly
affected by economic conditions in North America and Europe. We may experience a decline in sales as a result of poor economic
conditions and the lack of visibility relating to future orders. Our results of operations depend upon, among other things, our ability to
maintain and increase sales volumes with existing customers, our ability to limit price reductions and maintain our margins, our ability to
attract new customers and the financial condition of our customers. A decline in the economy that adversely affects our customers, causing
them to limit or defer their spending, would likely adversely affect our sales, prices and profitability as well. We cannot predict with any
certainty whether we will be able to maintain or improve upon historical sales volumes with existing customers, or whether we will be able
to attract new customers.
In response to economic and market conditions, from time to time we have undertaken initiatives to reduce our cost structure where
appropriate. These initiatives, as well as any future workforce and facilities reductions, may not be sufficient to meet current and future
changes in economic and market conditions and allow us to continue to achieve the growth rates and levels of profitability we have recently
experienced. In addition, costs actually incurred in connection with our restructuring actions may be higher than our estimates of such costs
and/or may not lead to the anticipated cost savings.
We may not be able to compete effectively with current or future competitors. The markets for our products and services are intensely
competitive and subject to constant technological change. We expect this competition to further intensify in the future. Competitive factors
include price, availability, service and support. We compete with a wide variety of other resellers and retailers, including internet marketers,
as well as manufacturers. Many of our competitors are larger companies with greater financial, marketing and product development
resources than ours. The market for the sale of industrial products in North America is highly fragmented and is characterized by multiple
distribution channels such as small dealerships, direct mail distribution, internet-based resellers, large warehouse stores and retail outlets.
We also face competition from manufacturers’ own sales representatives, who sell industrial equipment directly to customers, and from
regional or local distributors. In addition, new competitors may enter our markets. This may place us at a disadvantage in responding to
competitors’ pricing strategies, technological advances and other initiatives, resulting in our inability to increase our revenues or maintain
our gross margins in the future.
Table of Contents
•
Corporate Ethics Policy for officers, directors and employees
•
Charter for the Audit Committee of the Board of Directors
•
Charter for the Compensation Committee of the Board of Directors
•
Charter for the Nominating/Corporate Governance Committee of the Board of Directors
•
Corporate Governance Guidelines and Principles
• General economic conditions, such as decreased consumer confidence and spending, reductions in manufacturing capacity, and inflation
could result in our failure to achieve our historical sales growth rates and profit levels.
•
The markets for our products and services are extremely competitive and if we are unable to successfully respond to our competitors
’
strategies our sales and gross margins will be adversely affected.
8