Juno 2012 Annual Report Download - page 36

Table of Contents
condition, results of operations, and cash flows may suffer if we fail to enter into new strategic relationships, or maintain or expand existing strategic
relationships, or if these strategic relationships do not result in traffic on our websites sufficient to justify their costs.
In addition, we are subject to many risks beyond our control that influence the success or failure of our strategic relationships. For example, if any
of the online retailers or direct marketers with which we have strategic relationships experience financial or operational difficulties that materially and
adversely affect their ability to satisfy their obligations under their agreements with us, our business, financial condition, results of operations, and cash
flows could be materially and adversely affected.


 
We believe that our success in promoting and enhancing our brands depends on our ability to provide our customers high-quality products within
the required timeframe and a high level of customer service. Our business depends, in part, on the ability of our independent floral network members
and third-party suppliers who fulfill our orders to do so at high-quality levels. We work with our floral network members and third-party suppliers to
develop best practices for quality assurance; however, we generally do not directly control or continuously monitor any floral network member or third-
party supplier. The failure of our floral network members or third-party suppliers to fulfill orders to our customers' satisfaction, at an acceptable level of
quality and within the required timeframe, could adversely impact our brands and cause us to lose customers, which could have a material adverse effect
on our business, financial condition, results of operations, and cash flows.
Additionally, because we depend upon third parties for the delivery of our products to customers, strikes or other service interruptions affecting
these shippers could have an adverse effect on our ability to deliver our products on a timely basis. If any of our shippers are unable or unwilling to
deliver our products, we would have to engage alternative shippers, which could increase our costs. A disruption in any of our shippers' delivery of our
products could cause us to lose customers or could increase our costs, which could have a material adverse effect on our business, financial condition,
results of operations, and cash flows.

A significant portion of our profitability is dependent on our floral network members. We have lost, and may continue to lose, floral network
members as a result of both declines in the number of local retail florists as a result of economic factors and competition, as well as our members
choosing not to do business with us. If we lose a significant number of floral network members, or if we are not able to maintain or increase revenues
from our floral network members, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
In addition, the operating and financial success of our business has been, and is expected to continue to be, dependent on the financial performance
of the retail floral industry. There can be no assurance that the retail floral industry will not decline, that consumer preferences for, and purchases of,
floral products will not decline, or that retail florist revenues or inter-city floral delivery transactions will not decline in absolute terms. A sustained
decline in the sales volume of the retail floral industry could have a material adverse effect on our business, financial condition, results of operations,
and cash flows.
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