320345--8/29/2008--MICROS_SYSTEMS

related topics

{customer, product, revenue}

{operation, international, foreign}

{system, service, information}

{property, intellectual, protect}

{operation, natural, condition}

{personnel, key, retain}

{condition, economic, financial}

{cost, operation, labor}

{product, market, service}

{gas, price, oil}

{cost, contract, operation}

{stock, price, operating}

{loan, real, estate}

{product, candidate, development}

{regulation, change, law}

{cost, regulation, environmental}

Our business is very sensitive to the threat of terrorism and political uncertainty. Our business is very sensitive to environmental and health disasters. Higher oil and gas prices worldwide could have a material adverse impact on the travel and tourism industries. We maintain offices in certain parts of the world that are subject to economic instability, political unrest, and terrorism, such as Argentina, Brazil and Israel. Increasing tensions between Russia and the United States could adversely affect our business in Eastern Europe and Central Asia. 2. ECONOMIC, PRICING AND FINANCIAL RISKS. We are subject to the variability of world economies. Our quarterly financial results are dependent upon the timing and size of customer orders and the shipment of products for large orders. Our ability to establish pricing is subject to rapidly changing market and competitive conditions. Our gross margins will vary from quarter to quarter based upon product mix. Our non-major account business is difficult to predict. Some of the advanced systems we sell are very complex and require a high level of technical sophistication, which may result in increased costs that adversely affect our operating results. We are subject to certain material cost increases that may be out of our control. We are subject to fluctuations in foreign currencies and exchange rates. As a publicly traded company, our stock price is subject to certain market trends that are out of our control and that may not reflect our actual operating performance. We have encountered risks associated with maintaining large cash balances. Our customers requirements are increasingly sophisticated. The development of software is an inherently difficult process that may result in software bugs that adversely impact a customer s business. The manufacturing of our hardware platform is performed primarily by GES, a company in Singapore. Large customized deployments may be difficult and may result in cost overruns that are not recoverable. Our investment in certain technologies may prove to be unsuccessful and may delay our focus on more promising technologies. Actual or perceived security vulnerabilities in our software products may result in reduced sales or liabilities. 4. RESOURCE AND PERSONNEL RISKS. We could be adversely affected by vendor labor difficulties. Our inability to hire qualified personnel, including particularly research development personnel, could adversely affect our ability to satisfy customer requirements on an efficient basis. 5. LEGAL AND ACCOUNTING RISKS. Although we attempt to protect our proprietary technology, these protections do not preclude competitors from developing products with features similar to our products. We are subject to litigation, which may be costly. We are subject to claims by others that we are infringing their intellectual property rights. Credit card issuers have promulgated credit card security guidelines as part of their ongoing effort to battle identity theft and credit card fraud, which may substantially increase our expenses; breaches of our customers credit card security may adversely affect us.

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320345--8/29/2008--MICROS_SYSTEMS_INC