1138639--3/1/2010--INFINERA

related topics

{customer, product, revenue}

{product, market, service}

{operation, international, foreign}

{stock, price, operating}

{control, financial, internal}

{property, intellectual, protect}

{acquisition, growth, future}

{cost, regulation, environmental}

{operation, natural, condition}

{cost, operation, labor}

{system, service, information}

{condition, economic, financial}

{personnel, key, retain}

{competitive, industry, competition}

{provision, law, control}

{loan, real, estate}

{regulation, government, change}

We have a history of significant operating losses and may not maintain profitability on an annual basis in the future. Our revenue and operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below investor or analyst expectations. Our gross margin may fluctuate from quarter to quarter and may be adversely affected by a number of factors, some of which are beyond our control. Aggressive business tactics by our competitors may harm our business. Our ability to increase our revenue will depend upon continued growth of demand by consumers and businesses for additional network capacity. Recent turmoil in the financial markets and the global recession has adversely affected and may continue to adversely affect our industry, business and gross margins. We have a limited operating history and limited history of selling our DTN Systems and ATN Systems, both of which make it difficult to predict our future operating results. The markets in which we compete are highly competitive and dominated by large corporations, and we may not be able to compete effectively. We are dependent on a small number of key customers for a significant portion of our revenue and the loss of, or a significant reduction in orders from one or more of our key customers would reduce our revenue and harm our operating results. Our large customers have substantial negotiating leverage, which may require that we agree to terms and conditions that result in increased cost of sales, decreased revenue and lower average selling prices and gross margins, all of which would harm our operating results. We are dependent on a single product, and the lack of continued market acceptance of our DTN System would harm our business. If we fail to expand sales of our DTN System into international markets or to sell our products to new types of customers, such as U.S. regional Bell operating companies and international postal, telephone and telegraph companies, our revenue will be harmed. If we fail to protect our intellectual property rights, our competitive position could be harmed or we could incur significant expense to enforce our rights. Claims by others that we infringe their intellectual property could harm our business. We have experienced delays in the development and introduction of our DTN System, and any future delays in releasing new products or in releasing enhancements to our existing products may harm our business. Our manufacturing process is very complex and the partial or complete loss of our manufacturing facility, or a reduction in yields or an inability to scale capacity to meet customer demands could harm our business. Our leadership transitions may not go smoothly and could adversely impact our future operations. If we fail to accurately forecast demand for our products, we may have excess or insufficient inventory, which may increase our operating costs, decrease our revenue and harm our business. Product performance problems, including undetected errors in our hardware or software, or deployment delays could harm our business and reputation. We must respond to rapid technological change and comply with evolving industry standards and requirements for our products to be successful. We are dependent on sole source and limited source suppliers for several key components, and if we fail to obtain these components on a timely basis, we will not meet our customers product delivery requirements. Our investments in auction rate securities are subject to risks which may cause losses and affect the liquidity of these investments. If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected. If we lose key personnel or fail to attract and retain additional qualified personnel when needed, our business may be harmed. Our sales cycle can be long and unpredictable, which could result in an unexpected revenue shortfall in any given quarter. Our international sales and operations subject us to additional risks that may harm our operating results. We may be adversely affected by fluctuations in currency exchange rates. If our contract manufacturers do not perform as we expect, our business may be harmed. Any acquisitions we make could disrupt our business and harm our financial condition and operations. Our use and reliance upon development resources in India, China and Canada may expose us to unanticipated costs or liabilities. Unforeseen health, safety and environmental costs could harm our business. We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets. If we need additional capital in the future, it may not be available to us on favorable terms, or at all. We are subject to government regulations that could adversely impact our business. Natural disasters, terrorist attacks or other catastrophic events could harm our operations. The trading price of our common stock has been volatile and is likely to be volatile in the future. If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline. Anti-takeover provisions in our charter documents and Delaware law could discourage delay or prevent a change in control of our company and may affect the trading price of our common stock.

Full 10-K form ▸

1138639--3/1/2010--INFINERA_CORP