1275014--3/12/2008--ULTRA_CLEAN_HOLDINGS

related topics

{customer, product, revenue}

{product, market, service}

{acquisition, growth, future}

{operation, international, foreign}

{control, financial, internal}

{property, intellectual, protect}

{stock, price, operating}

{personnel, key, retain}

{cost, operation, labor}

{debt, indebtedness, cash}

{operation, natural, condition}

{product, liability, claim}

{cost, regulation, environmental}

{competitive, industry, competition}

We rely on a small number of customers for a significant portion of our sales, and any impairment of our relationships with these customers would adversely affect our business. We have experienced and may continue to experience difficulties with our new enterprise resource planning (ERP) system, which we implemented during the fourth quarter of fiscal 2007, and which has impacted and could further impact our results of operation. We may not be able to integrate efficiently the operations of past and future acquired businesses. We have established, and intend to expand, our operations in China, which exposes us to risks associated with operating in a foreign country. Our quarterly revenue and operating results fluctuate significantly from period to period, and this may cause volatility in our common stock price. Third parties have claimed and may in the future claim we are infringing their intellectual property, which could subject us to litigation or licensing expenses, and we may be prevented from selling our products if any such claims prove successful. We are subject to order and shipment uncertainties and any significant reductions, cancellations or delays in customer orders could cause our revenue to decline and our operating results to suffer. The manufacturing of our products is highly complex, and if we are not able to manage our manufacturing and procurement process effectively, our business and operating results will suffer. OEMs may not continue to outsource other critical subsystems, which would adversely impact our operating results. If our new products are not accepted by OEMs or if we are unable to maintain historical margins on our new products, our operating results would be adversely impacted. We may not be able to manage our future growth successfully. Our business is largely dependent on the know-how of our employees, and we generally do not have a protected intellectual property position. If we do not keep pace with developments in the semiconductor industry and with technological innovation generally, our products may not be competitive. The industry in which we participate is highly competitive and rapidly evolving, and if we are unable to compete effectively, our operating results would be harmed. We must achieve design wins to retain our existing customers and to obtain new customers. We may not be able to respond quickly enough to increases in demand for our products. Our dependence on our suppliers may prevent us from delivering an acceptable product on a timely basis. Defects in our products could damage our reputation, decrease market acceptance of our products, cause the unintended release of hazardous materials and result in potentially costly litigation. We have outstanding indebtedness; the restrictive covenants under some of our debt agreements may limit our ability to expand or pursue our business strategy; if we are forced to prepay some or all of this indebtedness our financial position would be severely and adversely affected. The technology labor market is very competitive, and our business will suffer if we are unable to hire and retain key personnel. We may not be able to fund our future capital requirements from our operations, and financing from other sources may not be available on favorable terms or at all. Fluctuations in currency exchange rates may adversely affect our financial condition and results of operations. If environmental contamination were to occur in one of our manufacturing facilities, we could be subject to substantial liabilities. We might experience business disruptions and unanticipated expenses associated with the relocation of our headquarters to a new facility. If our facilities were to experience catastrophic loss due to natural disasters, our operations would be seriously harmed. We must maintain effective controls, and our auditors will report on them. The market for our stock is subject to significant fluctuation.

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1275014--3/12/2008--ULTRA_CLEAN_HOLDINGS_INC