Stamps.com 2003 Annual Report Download - page 14

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Table of Contents
RISK FACTORS
You should carefully consider the following risks and the other information in this report and our other filings with the SEC before you decide
to invest in our company or to maintain or increase your investment. The risks and uncertainties described below are not the only ones facing
Stamps.com. Additional risks and uncertainties may also adversely impact and impair our business. If any of the following risks actually occur,
our business, results of operations or financial condition would likely suffer. In that case, the trading price of our common stock could decline,
and you may lose all or part of your investment.
This report contains forward-looking statements based on the current expectations, assumptions, estimates and projections about Stamps.com
and the Internet. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those
discussed in these forward-looking statements as a result of many factors, including those described in this section and elsewhere in this
Report. Stamps.com does not undertake to update publicly any forward
-looking statements for any reason, even if new information becomes
available or other events occur in the future.
Risks Related to Our Business
We may not successfully implement strategies to increase the adoption of our service which would limit our growth, adversely affect
our business and cause the price of our common stock to decline.
Our future profitability will depend on our ability to successfully implement our strategy of increasing the adoption of our service. Factors that
might cause our revenues, margins and operating results to fluctuate include the factors described in the subheadings below as well as: (a) the
costs of our marketing programs to establish and promote the Stamps.com brands; (b) the demand for our service; (c) our ability to develop and
maintain strategic distribution relationships; (d) the number, timing and significance of new products or services introduced by us and by our
competitors; (e) our ability to develop, market and introduce new and enhanced services on a timely basis; (f) the level of service and price
competition; (g) our operating expenses; (h) US Postal Service regulation and policies relating to PC Postage; and (i) general economic factors.
We have a history of losses, expect to incur losses in the future and may never achieve profitability, which may reduce the trading price
of our common stock.
You should consider our business and prospects in light of the risks, expenses and difficulties encountered by companies in their early stage of
development. We have experienced significant net losses since our inception and we may experience net losses in the future. We cannot assure
you that we will be able to achieve profitability. If we do achieve profitability, we cannot be certain that we will be able to sustain or increase
such profitability. We incurred net losses of $9.3 million in 2003.
We implemented pricing plans that may adversely affect our future revenues and margins.
Our ability to generate gross margins depends upon the ability to generate significant revenues from a large base of active customers. In order
to attract customers in the future, we may run special promotions and offers such as discounts on fees, postage and supplies. We cannot be sure
that customers will be receptive to future fee structures and special promotions that we may implement. Even though we have established a
sizeable base of users, we still may not generate sufficient gross margins to become profitable. In addition, our ability to generate revenues or
achieve profitability could be adversely affected by the special promotions or additional changes to our pricing plans.
If we do not successfully attract and retain skilled personnel for permanent management and other key personnel positions, we may
not be able to effectively implement our business plan.
Our success depends largely on the skills, experience and performance of the members of our senior management and other key personnel. Any
of the individuals can terminate his or her employment with us at any time. If we lose key employees and are unable to replace them with
qualified individuals, our business and operating results could be seriously harmed. In addition, our future success will depend largely on our
ability to continue attracting and retaining highly skilled personnel. As a result, we may be unable to successfully attract, assimilate or retain
qualified
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