65270--7/13/2006--METHODE_ELECTRONICS

related topics

{condition, economic, financial}

{competitive, industry, competition}

{product, market, service}

{property, intellectual, protect}

{product, liability, claim}

{operation, international, foreign}

Because we derive approximately 75% of our revenues from the automotive industry, any downturns or challenges faced by this industry may have an adverse effect on our business, financial condition and operating results. We are subject to intense pricing pressures in the automotive industry. Our technology-based business and the markets in which we operate are highly competitive. If we are unable to compete effectively, our sales will decline. Our business is cyclical and seasonal in nature and further downturns in the automotive industry could reduce the sales and profitability of our business. If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on another person s intellectual property, our business, financial condition and operating results could be materially adversely affected. We may be unable to keep pace with rapid technological changes, which would adversely affect our business. Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us. We face risks relating to our international operations.

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65270--7/13/2006--METHODE_ELECTRONICS_INC