67279--3/31/2006--MOCON

related topics

{product, market, service}

{operation, international, foreign}

{customer, product, revenue}

{property, intellectual, protect}

{system, service, information}

{acquisition, growth, future}

{control, financial, internal}

{stock, price, operating}

{tax, income, asset}

{regulation, change, law}

{capital, credit, financial}

If we experience any increase in the cost of raw materials or supplies, we may experience a decrease in profit margins. The markets in which we operate have experienced minimal growth in recent years, and our ability to increase our revenues will depend in part on our ability to develop new products, develop new applications for our existing products and to acquire complementary businesses and product lines. If we acquire businesses in the future, we could experience a decrease in our profit margins, a decrease in our net income, and other adverse consequences. Our growth strategy to supplement our internal growth with the acquisition of businesses and technologies that complement or augment our existing products involves other risks, including integration risks, which could harm our business. We face risks of technological changes that may render our products obsolete. Any reduction in the level of capital expenditures by our customers could negatively impact our sales. A significant portion of our sales are generated from foreign countries and selling in foreign countries entails a number of risks which could result in a decrease to our sales or an increase in our operating expenses. Fluctuations in foreign currency exchange rates could result in declines in our reported net sales and net earnings. Some of our competitors have greater resources than we do, which may provide our competitors with an advantage in the development and marketing of new products. Our reliance upon patents, domestic trademark laws and contractual provisions to protect our proprietary rights may not be sufficient to protect our intellectual property from others who may sell similar products. We rely on our management information systems for inventory management, distribution and other functions. If our information systems fail to adequately perform these functions or if we experience an interruption in their operation, our business and results of operations could be adversely affected. The market price of our common stock has fluctuated significantly in the past and will likely continue to do so in the future and any broad market fluctuations may materially adversely affect the market price of our common stock. Recently enacted and future changes in securities laws and regulations are likely to increase our costs. We will also be exposed to risks relating to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act.

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67279--3/31/2006--MOCON_INC