1042825--3/13/2009--POWER_ONE

related topics

{customer, product, revenue}

{product, market, service}

{debt, indebtedness, cash}

{condition, economic, financial}

{property, intellectual, protect}

{control, financial, internal}

{stock, price, share}

{capital, credit, financial}

{acquisition, growth, future}

{cost, regulation, environmental}

{tax, income, asset}

{financial, litigation, operation}

{operation, international, foreign}

{provision, law, control}

{personnel, key, retain}

{gas, price, oil}

We have a history of operating losses and our future profitability is uncertain; this may have a harmful effect on our business and the value of our common stock. We may face liquidity challenges to meet our debt obligations and capital expenditures, and may require additional funding in the future. The recent disruptions in the financial markets may limit our access to additional financing. Covenants in our debt instruments may adversely affect us. We may seek to raise additional funding through private or public sales of equity securities, which could have a dilutive and other negative effects on our existing stockholders. We have experienced manufacturing and supply chain problems that have caused an inability to deliver product on time. A prolonged economic slowdown or a lengthy or severe recession could hurt our operations, particularly if it results in a decline in profitability in the communications infrastructure and server/storage industries. Changes in demand or downturns in the volatile and cyclical communications infrastructure and server/storage industries could affect our business and profitability. We face intense industry competition, price erosion and product obsolescence, which, in turn, could reduce our profitability. Our inventory levels may be too high or too low, reducing our profitability. Failure to anticipate trends in the mix of power conversion products that our customers will demand may adversely affect our business. Vendor managed inventory programs give rise to variability in our revenue and operating results. Cancellations, reductions or delays in purchases could cause our quarterly results to fluctuate. We rely on a few major customers for a material portion of our business and the loss of any of those customers, or a change in our product mix, could reduce our net income and operating results. Interruptions in manufacturing of our products may impair our business and profitability. Environmental, health and safety laws may restrict our operations. We are subject to credit risks. We face, and might in the future face, intellectual property infringement claims that might be costly to resolve. Actions by our competitors and by foreign governments could undermine our intellectual property rights, which in turn could adversely affect our results. Our success depends on our ability to retain our senior management and to attract and retain key technical personnel and integrate new management personnel. Much of our business is subject to risks associated with operations in foreign countries. New technologies could result in a decrease in demand for our products, and we may not be able to develop new products to satisfy changes in demand which could result in a decrease in net sales and a loss of market share. We may fail to capture customers in the new markets that we are pursuing. We have in place a stockholder's right plan, and certain provisions in our charter documents and Delaware law may hinder or prevent a change in control of our company. Market fluctuations or volatility could cause the trading price of our common stock to decline and limit our ability to raise capital. Decline in the trading price of our common stock could indicate that our goodwill and other intangible assets are impaired and we may be required to record a significant charge to operating income. We are subject to internal control evaluations and attestation requirements of Section 404 of the Sarbanes-Oxley Act. Pending or future litigation could have a material adverse effect on our operating results and financial condition. We are subject to risks associated with future company and technology acquisitions, divestitures, joint ventures and strategic investments.

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1042825--3/13/2009--POWER_ONE_INC