717238--3/1/2007--MSC_SOFTWARE

related topics

{product, market, service}

{property, intellectual, protect}

{stock, price, operating}

{condition, economic, financial}

{acquisition, growth, future}

{customer, product, revenue}

{operation, international, foreign}

{personnel, key, retain}

{regulation, government, change}

{provision, law, control}

{product, candidate, development}

{system, service, information}

Downturns in the aerospace and automotive industries we serve would adversely affect our sales and operating results. If we do not acquire other companies, we may not be able to increase our revenue at historical growth rates. We have acquired and may continue to acquire other companies and may be unable to integrate successfully such companies with our operations, and we have recorded, and may continue to record, a significant amount of goodwill in connection with our acquisitions. We have had losses and, should they recur, it could have a material adverse effect on our business, results of operations and financial condition. We may periodically restructure our operations or change our pricing model, which could adversely impact our operating results in the short term before we receive any benefits from these changes, if at all. Our operating results are dependent in part on our ability to develop and introduce new and enhanced products and we may not be able to develop new and enhanced products to satisfy changes in demand. Our sales cycle is lengthy and complicated. The timing of orders and shipments, which frequently occur at the end of a quarter, can cause fluctuations of our operating results that, in turn, may impact the price of our common stock. Our future results could be harmed by economic, political, regulatory and other risks associated with international sales and operations. We have entered into agreements with third parties for the inclusion of their technology as a component of some of our products. The termination of these agreements could adversely affect our business. Our operating expenses are fixed in advance. Therefore, we have limited ability to reduce expenses in response to any revenue shortfalls. Strong competition in the simulation software industry may affect prices, which could reduce margins and adversely affect our operating results and financial position, and we may not be able to maintain our competitive position against current and potential competitors. Our future success depends in part on the continued service of our key technical and management personnel and our ability to identify, hire and retain additional personnel. Business interruptions could adversely affect our business. If we cannot adequately protect our intellectual property rights, our financial results may suffer. We could be harmed by litigation involving intellectual property rights. Certain provisions of our certificate of incorporation may delay, defer or prevent a change in control which could impact the price of our stock.

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717238--3/1/2007--MSC_SOFTWARE_CORP