355948--7/23/2009--RICHARDSON_ELECTRONICS_LTD/DE

related topics
{operation, international, foreign}
{condition, economic, financial}
{customer, product, revenue}
{competitive, industry, competition}
{control, financial, internal}
{tax, income, asset}
{system, service, information}
{product, liability, claim}
{debt, indebtedness, cash}
{stock, price, operating}
We have several years of historical losses and may have future losses. Current worldwide economic conditions may adversely affect our business, operating results and financial condition. We must continue to reduce our costs in order to compete effectively. We have exposure to economic downturns and operate in cyclical markets. We maintain a significant investment in inventory. We have also incurred significant charges for inventory obsolescence, and may incur similar charges in the future. Because we derive a significant portion of our revenue by distributing products designed and manufactured by third parties, we may be unable to anticipate changes in the marketplace and, as a result, could lose market share. We face intense competition in the markets we serve and, if we do not compete effectively, we could significantly harm our operating results. Because we generally do not have long-term contracts with our vendors, we may experience shortages of products that could harm our business and customer relationships. Our products may be found to be defective and, as a result, warranty and/or product liability claims may be asserted against us, which may have a material adverse effect on us. Economic, political, and other risks associated with international sales and operations could adversely affect our results of operations. A single stockholder has voting control over us. We are exposed to foreign currency risk. Our revolving credit agreement and the indentures for our outstanding notes impose restrictions with respect to various business matters. If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls over financial reporting, we may not be able to detect fraud or report our financial results accurately or timely, which could have a material adverse effect on our business. Our business is dependent upon the availability of our information systems. The failure of our information systems for any extended period of time could adversely affect our business.

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