61478--12/22/2008--ADC_TELECOMMUNICATIONS

related topics

{customer, product, revenue}

{product, market, service}

{stock, price, operating}

{operation, international, foreign}

{cost, operation, labor}

{tax, income, asset}

{control, financial, internal}

{provision, law, control}

{condition, economic, financial}

{property, intellectual, protect}

{acquisition, growth, future}

{debt, indebtedness, cash}

{personnel, key, retain}

{competitive, industry, competition}

{financial, litigation, operation}

Our gross margins may vary over time, and our level of gross margin may not be sustainable. We are becoming increasingly dependent on specific network expansion projects undertaken by our customers, which are subject to intense competition and result in sales volatility. Our cost-reduction initiatives may not result in anticipated savings or more efficient operations. Further consolidation among our customers may result in the loss of some customers and may reduce revenue during the pendency of business combinations and related integration activities. Our profitability could be impacted negatively if one or more of our key customers substantially reduces orders for our products and/or transitions their purchases towards lower gross margin 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. Access to our existing line of credit requires that we meet several covenants, which could be more challenging in a difficult operating environment. Moreover, if we need to utilize our existing line of credit, our operational flexibility may be impaired. If we seek to secure other financing, we may not be able to obtain it on acceptable terms. We have recorded significant impairment charges to reduce the carrying value of certain auction-rate securities we hold, and additional impairment charges with respect to auction-rate securities may occur in the future. We may complete transactions, undertake restructuring initiatives or face other circumstances in the future that will result in restructuring or impairment charges, including, but not limited to, significant goodwill impairment charges. 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 are 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. Managing our inventory is complex and may include write-downs of excess or obsolete inventory. 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. If our manufacturing operations suffer production or shipping delays or if we do not have sufficient manufacturing capabilities, we may experience difficulty in meeting customer demands. 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. Our ability to operate our business and report financial results is dependent on maintaining effective information management systems. 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.

Full 10-K form ▸

61478--12/22/2008--ADC_TELECOMMUNICATIONS_INC