61478--12/18/2007--ADC_TELECOMMUNICATIONS

related topics

{customer, product, revenue}

{stock, price, operating}

{product, market, service}

{cost, operation, labor}

{acquisition, growth, future}

{cost, contract, operation}

{condition, economic, financial}

{provision, law, control}

{operation, international, foreign}

{control, financial, internal}

{property, intellectual, protect}

{tax, income, asset}

{personnel, key, retain}

{competitive, industry, competition}

{financial, litigation, operation}

Shifts in our product mix may result in declines in our gross margin. We are becoming increasingly dependent on significant specific network expansion projects undertaken by our customers. Our cost-reduction initiatives may not result in anticipated savings or more efficient operations. Consolidation among our customers has resulted in our loss of customers and reduced revenue during the pendency of business combinations and related integration activities. Our sales could be impacted negatively if one or more of our key customers substantially reduces orders for our products. Our Professional Services business is exposed to risks associated with a highly concentrated customer base. Our market is subject to rapid technological change, and, to compete effectively, we must continually introduce new products that achieve market acceptance. We may not successfully close strategic acquisitions and, if these acquisitions are completed, we may have difficulty integrating the acquired businesses with our existing operations. If we seek to secure financing, we may not be able to obtain it on acceptable terms. We recorded a significant impairment charge during the quarter ended October 31, 2007 to reduce the carrying value of certain auction rate securities we hold, and we currently expect to incur additional impairment charges with respect to auction rate securities in fiscal year 2008. Possible consolidation among our competitors could result in a loss of sales. Our operating results fluctuate significantly from quarter to quarter. The regulatory environment in which we and our customers operate is changing. Conditions in global markets could affect our operations. We have agreed to acquire Century Man, and, if this acquisition is completed, we will be subject to special risks relating to doing business in China. Our intellectual property rights may not be adequate to protect our business. We are dependent upon our senior management and other critical employees. Compliance with internal control requirements is expensive and poses certain risks. Product defects or the failure of our products to meet specifications could cause us to lose customers and revenue or to incur unexpected expenses. We may encounter difficulties obtaining raw materials and supplies needed to make our products, and the prices of these materials and supplies are subject to fluctuation. We may encounter litigation that has a material impact on our business. We are subject to risks associated with changes in commodity prices, interest rates, security prices, and foreign currency exchange rates. Risks Related to Our Common Stock Our stock price has been volatile historically and may continue to be volatile. The price of our common stock may fluctuate significantly. Anti-takeover provisions in our charter documents, our shareholder rights agreement and Minnesota law could prevent or delay a change in control of our company.

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61478--12/18/2007--ADC_TELECOMMUNICATIONS_INC