1090069--4/18/2006--CHEROKEE_INTERNATIONAL

related topics

{customer, product, revenue}

{competitive, industry, competition}

{product, market, service}

{cost, regulation, environmental}

{condition, economic, financial}

{regulation, government, change}

{operation, natural, condition}

{debt, indebtedness, cash}

{operation, international, foreign}

{personnel, key, retain}

{property, intellectual, protect}

{stock, price, operating}

Risks Relating to Our Company and Industry We are substantially dependent upon sales to a relatively small group of customers. The loss of one or more major customers, or the discontinuation or modification of these customers products, could materially and adversely affect the results of our operations. Failure by our customers or us to keep up with rapid technological change in the electronic equipment industries could result in reduced sales. We face significant competition, including from some competitors with greater resources and geographic presence than us. Our failure to adequately compete could have a material adverse effect on our business. Cancellations, reductions or delays in customers orders or commitments, or an increase in the number of warranty product returns could have a material adverse impact on our financial condition and results of operations. Our international manufacturing operations and our international sales subject us to various risks associated with, among other things, foreign laws, policies, economies and exchange rate fluctuations. An interruption in delivery of component supplies could lead to supply shortages or a significant increase in our cost of materials. Our quarterly sales may fluctuate while our expenditures remain relatively fixed, potentially resulting in lower gross margins and volatility in our stock price. Our ability to successfully implement our business strategy is dependent on our ability to retain and attract key personnel. Changes in government regulations or product certification could result in delays in shipment or loss of sales. Environmental compliance could require significant expenditures and failure to so comply could result in fines or revocation of licenses or permits, any of which could materially and adversely affect our financial condition or results of operations. Our operations are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure and other events beyond our control. Third parties may sue us for alleged infringement of their proprietary rights. Provisions of the agreements governing our debt will restrict our business operations. Credit risks could materially and adversely affect our operations and financial condition.

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1090069--4/18/2006--CHEROKEE_INTERNATIONAL_CORP