Stamps.com 2015 Annual Report Download - page 24

TABLE OF CONTENTS
• makeitmoredifficulttosatisfyourfinancialobligations,includingpaymentsonourindebtedness;
• placeusatacompetitivedisadvantagecomparedtoourcompetitorsthathavelessindebtedness;
• limitourabilitytoborrowadditionalfundsforworkingcapital,capitalexpenditures,acquisitions,debtservicerequirements,
executionofourbusinessstrategyorothergeneralcorporatepurposes;
• adverselyaffectourfinancialresultsastheinterestrateonourdebtissubjecttochangesintheLondonInterbankOffered
Rateandchangesincertainfinancialmeasuresandthuscouldincreaseinfutureperiods.
To service our debt and fund our other capital requirements, we will require a significant amount of cash, and our ability to
generate cash will depend on many factors beyond our control.
Ourabilitytomeetourdebtserviceobligationsandtofundworkingcapital,capitalexpendituresandinvestmentsinourbusiness,
willdependuponourfutureperformance,whichwillbesubjecttofinancial,businessandotherfactorsaffectingouroperations,many
ofwhicharebeyondourcontrol.Forexample,thiscouldincludegeneralandregionaleconomic,financial,competitive,legislative,
regulatoryandotherfactors.Wecannotensurethatwewillgeneratecashflowfromoperations,orthatfutureborrowingswillbe
available,inanamountsufficienttoenableustopayourdebtortofundourotherliquidityneeds.
Ifourcashflowsandcapitalresourcesareinsufficienttofundourdebtserviceobligations,wecouldfacesubstantialliquidity
problemsandcouldbeforcedtoreduceordelayinvestmentsandcapitalexpendituresortodisposeofmaterialassetsoroperations,
seekadditionalindebtednessorequitycapitalorrestructureorrefinanceourindebtedness.Wemaynotbeabletoeffectanysuch
alternativemeasuresoncommerciallyreasonabletermsoratalland,evenifsuccessful,thosealternativeactionsmaynotallowusto
meetourscheduleddebtserviceobligations.
Ourinabilitytogeneratesufficientcashflowstosatisfyourdebtobligations,ortorefinanceourindebtednessoncommercially
reasonableterms,oratall,wouldmateriallyandadverselyaffectourfinancialpositionandresultsofoperationsandourabilityto
satisfyourdebtobligations.
Risks Related to Our Industry
Postal Reform may negatively affect or cause disruptions to our services and business.
TheUSPShasreacheditscongressionallymandateddebtlimitandfacesanongoingfiscalliquiditycrisis.Ithasembarkedoncost
cuttinginitiativesandhasaskedCongresstoenactvariousPostalReformmeasures.Amongthemeasuresproposedarecutbacksin
deliveryschedules(suchasSaturdaydelivery),mailprocessingcapability,andretailpostofficehoursandlocations.Anysuchchanges
actuallyapprovedandimplementedmayadverselyaffecttheproductsandservicesweareabletoofferourcustomersandcould
thereforeseriouslyharmourbusiness.Additionally,absentCongressionalaction,thefiscalcrisiscouldinterruptbasicUSPS
operations,aswellaspaymentstoUSPSsupplierssuchasus,eachofwhichcouldalsoseriouslyharmourbusiness.
USPS regulations or fee assessments may cause disruptions or discontinuance of our business.
WearesubjecttocontinuedUSPSscrutinyandothergovernmentregulations.Theavailabilityofourservicesisdependentupon
uscontinuingtomeetUSPSperformancespecificationsandregulations.TheUSPScouldchangeitscertificationrequirementsor
specificationsforPCPostageorrevokeorsuspendtheapprovalofoneormoreofourservicesatanytime.Ifatanytimewefailto
meetUSPSrequirements,wemaybeprohibitedfromofferingourservices,andourbusinesswouldbeseverelyandnegatively
impacted.Inaddition,theUSPScouldsuspendorterminateourapprovalorofferservicesthatcompeteagainstus,anyofwhichcould
stopornegativelyimpactthecommercialadoptionofourservices.AnychangesinrequirementsorspecificationsforPCPostagecould
adverselyaffectourpricing,costofrevenues,operatingresultsandmarginsbyincreasingthecostofprovidingourservices.
TheUSPScouldalsodecidethatPCPostageshouldnolongerbeanapprovedpostageserviceduetosecurityconcerns,financial
difficultieswithintheUSPSorotherissues.Ourbusinesswouldsufferdramaticallyifwewereunablepromptlytoadaptourservicesto
anynewrequirementsorspecificationsoriftheUSPSweretodiscontinuePCPostageasanapprovedpostagemethod.Alternatively,
theUSPScouldintroducecompetitive
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