1094739--6/30/2008--FINISAR

related topics

{customer, product, revenue}

{product, market, service}

{acquisition, growth, future}

{financial, litigation, operation}

{operation, international, foreign}

{stock, price, operating}

{debt, indebtedness, cash}

{property, intellectual, protect}

{stock, price, share}

{personnel, key, retain}

{product, liability, claim}

{provision, law, control}

{loss, insurance, financial}

We have incurred significant net losses, our future revenues are inherently unpredictable, our operating results are likely to fluctuate from period to period, and if we fail to meet the expectations of securities analysts or investors, our stock price could decline significantly We may have insufficient cash flow to meet our debt service obligations, including payments due on our subordinated convertible notes If we are unsuccessful in pending litigation, our payment obligations under our outstanding convertible subordinated notes could be accelerated We may not be able to obtain additional capital in the future, and failure to do so may harm our business Failure to accurately forecast our revenues could result in additional charges for obsolete or excess inventories or non-cancelable purchase commitments If we encounter sustained yield problems or other delays in the production or delivery of our internally-manufactured components or in the final assembly and test of our transceiver products, we may lose sales and damage our customer relationships We may lose sales if our suppliers or independent contractors fail to meet our needs We are dependent on widespread market acceptance of two product families, and our revenues will decline if the market does not continue to accept either of these product families We depend on large purchases from a few significant customers, and any loss, cancellation, reduction or delay in purchases by these customers could harm our business Because we do not have long-term contracts with our customers, our customers may cease purchasing our products at any time if we fail to meet our customers' needs Our market is subject to rapid technological change, and to compete effectively we must continually introduce new products that achieve market acceptance Continued competition in our markets may lead to a reduction in our prices, revenues and market share Decreases in average selling prices of our products may reduce gross margins Shifts in our product mix may result in declines in gross margins Our customers often evaluate our products for long and variable periods, which causes the timing of our revenues and results of operations to be unpredictable We depend on facilities located outside of the United States to manufacture a substantial portion of our products, which subjects us to additional risks Our future operating results may be subject to volatility as a result of exposure to foreign exchange risks. Our business and future operating results are subject to a wide range of uncertainties arising out of the continuing threat of terrorist attacks and ongoing military actions in the Middle East Past and future acquisitions could be difficult to integrate, disrupt our business, dilute stockholder value and harm our operating results We have made and may continue to make strategic investments which may not be successful, may result in the loss of all or part of our invested capital and may adversely affect our operating results We face risks of regulatory actions and inquiries into our historical stock option grant practices and related accounting, which could require significant management time and attention, and that could have a material adverse effect on our business, results of operations and financial condition We have been named as a party to derivative action lawsuits, and we may be named in additional litigation, all of which will require significant management time and attention and result in significant legal expenses and may result in an unfavorable outcome which could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are subject to other pending legal proceedings Because of competition for technical personnel, we may not be able to recruit or retain necessary personnel Our failure to protect our intellectual property may significantly harm our business Claims that we infringe third-party intellectual property rights could result in significant expenses or restrictions on our ability to sell our products Our products may contain defects that may cause us to incur significant costs, divert our attention from product development efforts and result in a loss of customers Our business and future operating results may be adversely affected by events outside our control The conversion of our outstanding convertible subordinated notes would result in substantial dilution to our current stockholders Delaware law, our charter documents and our stockholder rights plan contain provisions that could discourage or prevent a potential takeover, even if such a transaction would be beneficial to our stockholders Our stock price has been and is likely to continue to be volatile

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1094739--6/30/2008--FINISAR_CORP