O'Reilly Auto Parts 2014 Annual Report Download - page 21

FORM 10-K
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to achieve our growth objectives may negatively impact the trading price of our common stock. For a discussion of our growth strategies,
see the "Growth Strategy" section of Item 1 of this annual report on Form 10-K.
In order to be successful, we will need to retain and motivate key employees.
Our success has been largely dependent on the efforts of certain key personnel. In order to be successful, we will need to retain and
motivate executives and other key employees. Experienced management and technical personnel are in high demand and competition
for their talents is intense. We must also continue to motivate employees and keep them focused on our strategies and goals. Our business,
results of operations and cash flows could be materially adversely affected by the unexpected loss of the services of one or more of our
key employees. We cannot be sure that we will be able to continue to attract qualified personnel, which could cause us to be less efficient,
and as a result, may adversely impact our sales and profitability. For a discussion of our management, see the "Business" section of Item
1 of this annual report on Form 10-K.
A change in the relationship with any of our key suppliers or the unavailability of our key products at competitive prices could affect
our financial health.
Our business depends on developing and maintaining close relationships with our suppliers and on our suppliers' ability or willingness
to sell quality products to us at favorable prices and terms. Many factors outside of our control may harm these relationships and the
ability or willingness of these suppliers to sell us products on favorable terms. For example, financial or operational difficulties that our
suppliers may face could increase the cost of the products we purchase from them or our ability to source product from them. In addition,
the trend toward consolidation among automotive parts suppliers, as well as the off-shoring of manufacturing capacity to foreign countries,
may disrupt or end our relationship with some suppliers and could lead to less competition and result in higher prices. We could also be
negatively impacted by suppliers who might experience work stoppages, labor strikes or other interruptions to, or difficulties in the,
manufacture or supply of the products we purchase from them.
Risks associated with future acquisitions may not lead to expected growth and could result in increased costs and inefficiencies.
We expect to continue to make acquisitions as an element of our growth strategy. Acquisitions involve certain risks that could cause our
actual growth and profitability to differ from our expectations, examples of such risks include the following:
• we may not be able to continue to identify suitable acquisition targets or to acquire additional companies at favorable prices or
on other favorable terms;
• our management's attention may be distracted;
• we may fail to retain key personnel from acquired businesses;
• we may assume unanticipated legal liabilities and other problems;
• we may not be able to successfully integrate the operations (accounting and billing functions, for example) of businesses we
acquire to realize economic, operational and other benefits; and
• we may fail, or be unable to, discover liabilities of businesses that we acquire for which we, the subsequent owner or operator,
may be liable.
Business interruptions in our distribution centers or other facilities may affect our store hours, operability of our computer systems,
and/or availability and distribution of merchandise, which may affect our business.
Weather, terrorist activities, war or other disasters or the threat of them, may result in the closure of one or more of our distribution centers
("DCs") or other facilities, or may adversely affect our ability to deliver inventory to our stores on a nightly basis. This may affect our
ability to timely provide products to our customers, resulting in lost sales or a potential loss of customer loyalty. Some of our merchandise
is imported from other countries and these goods could become difficult or impossible to bring into the United States, and we may not
be able to obtain such merchandise from other sources at similar prices. Such a disruption in revenue could potentially have a negative
impact on our results of operations, financial condition and cash flows.
We rely extensively on our computer systems to manage inventory, process transactions and timely provide products to our customers.
Our systems are subject to damage or interruption from power outages, telecommunications failures, computer viruses, security breaches
or other catastrophic events. If our systems are damaged or fail to function properly, we may experience loss of critical data and interruptions
or delays in our ability to manage inventories or process customer transactions. Such a disruption of our systems could negatively impact
revenue and potentially have a negative impact on our results of operations, financial condition and cash flows.
Failure to achieve and maintain a high level of product and service quality may reduce our brand value and negatively impact our
business.
We believe our Company has built an excellent reputation as a leading retailer in the automotive aftermarket industry. We believe our
continued success depends, in part, on our ability to preserve, grow and leverage the value of our brand. Brand value is based, in large
part, on perceptions of subjective qualities and even isolated incidents can erode trust and confidence, particularly if they result in adverse
publicity, governmental investigations or litigation, which can negatively impact these perceptions and lead to adverse effects on our
business or Team Members.