1111928--3/13/2008--IPG_PHOTONICS

related topics

{customer, product, revenue}

{stock, price, operating}

{product, market, service}

{acquisition, growth, future}

{operation, international, foreign}

{property, intellectual, protect}

{cost, operation, labor}

{personnel, key, retain}

{cost, regulation, environmental}

{product, liability, claim}

{condition, economic, financial}

{provision, law, control}

{regulation, change, law}

{system, service, information}

If fiber lasers do not achieve broader market acceptance or if market penetration occurs more slowly than we expect, prospects for our growth and profitability may be negatively impacted. We may not be able to effectively manage our growth and we may need to incur significant costs to address the operational requirements related to our growth, either of which could harm our business and operating results. Our vertically integrated business results in high levels of fixed costs and inventory levels that may adversely impact our gross profits and our operating results in the event that demand for our products declines or we maintain excess inventory levels. We may experience lower than expected manufacturing yields, which would adversely affect our gross margins. Our capacity expansion plans for manufacturing and operations may not be appropriate for future levels of demand and may adversely affect our gross margins. Because we lack long-term purchase commitments from our customers, our sales can be difficult to predict, which could lead to excess or obsolete inventory and adversely affect our operating results. We are subject to litigation alleging that we are infringing third-party intellectual property rights. Intellectual property claims could result in costly litigation and harm our business. Our inability to protect our intellectual property and proprietary technologies could result in the unauthorized use of our technologies by third parties, hurt our competitive position and adversely affect our operating results. Future downturns in the global economy, particularly in the materials processing and communications markets, could have a material adverse effect on our sales and profitability. We depend upon internal production and on outside single or limited-source suppliers for many of our key components and raw materials. Any interruption in the supply of these key components and raw materials could adversely affect our results of operations. We rely on the significant experience and specialized expertise of our senior management and scientific staff and if we are unable to retain these key employees and attract other highly skilled personnel necessary to grow our business successfully, our business and results of operations could suffer. Failure to effectively build and expand our direct field service and support organization could have an adverse effect on our business. The laser and amplifier industries may experience declining average selling prices, which could cause our gross margins to decline and harm our operating results. A few customers account for a significant portion of our sales, and if we lose any of these customers or they significantly curtail their purchases of our products, our results of operations could be adversely affected. We have experienced, and expect to experience in the future, fluctuations in our quarterly operating results. These fluctuations may increase the volatility of our stock price. We depend on our OEM customers and system integrators and their ability to incorporate our products into their systems. The markets for our products are highly competitive and increased competition could increase our costs, reduce our sales or cause us to lose market share. Our inability to manage risks associated with our international customers and operations could adversely affect our business. Foreign currency transaction risk may negatively affect our net sales, cost of sales and operating margins and could result in exchange losses. Our products could contain defects, which may reduce sales of those products, harm market acceptance of our fiber laser products or result in claims against us. We may pursue acquisitions and investments in new businesses, products, patents or technologies. These may involve risks which could disrupt our business and may harm our financial condition. We are subject to various environmental laws and regulations that could impose substantial costs upon us and may adversely affect our business, operating results and financial condition. We are subject to export control regulations that could restrict our ability to increase our international sales and may adversely affect our business. Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing. Dr. Valentin P. Gapontsev, our chairman, Chief Executive Officer and principal stockholder, controls approximately 45% of our voting power and has a significant influence on the outcome of director elections and other matters requiring stockholder approval, including a change in corporate control. Dr. Valentin P. Gapontsev, our chairman, chief executive officer and principal stockholder, owns a material portion of one of our operating subsidiaries, which creates the possibility of a conflict of interest. Anti-takeover provisions in our charter documents and Delaware law could prevent or delay a change in control of our company, even if a change in control would be beneficial to our stockholders. Substantial sales of our common stock could cause our stock price to decline. We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.

Full 10-K form ▸

1111928--3/13/2008--IPG_PHOTONICS_CORP