741696--1/17/2006--APPLIED_SIGNAL_TECHNOLOGY

related topics

{customer, product, revenue}

{condition, economic, financial}

{cost, contract, operation}

{regulation, change, law}

{acquisition, growth, future}

{personnel, key, retain}

{property, intellectual, protect}

{product, market, service}

{regulation, government, change}

{operation, natural, condition}

{stock, price, operating}

We are subject to a number of special risks as a result of our acquisition of Dynamics Technology, Inc. We may not achieve the anticipated benefits of our investments in new business opportunities and any such investments could have a negative, material impact on our operating results and financial condition. Any decrease in expected product sales during a period could adversely impact our revenues, results of operations, and financial condition. If we are unable to recruit, train, and retain key personnel with required security clearances, our ability to develop, introduce, and sell our products may be adversely impacted. Stop-work orders could negatively impact our operating results and financial condition. Any reduction in government spending on global security could materially adversely impact our revenues, results of operations, and financial condition. If we are unable to comply with complex government regulations governing security and contracting practices, we could be disqualified as a supplier to the United States Government. We depend on revenues from a few significant contracts, and any loss, cancellation, reduction, or delay in these contracts could harm our business. U.S. Government contracts are generally not fully funded at inception and funding may be terminated or reduced at any time. Our business depends upon our relationships with, and the performance of, our prime contractors. We depend on revenues from a few significant customers, the loss of any significant customer could have an adverse effect on our business. Continued competition in global security may lead to a reduction in our revenues and market share. Unexpected increases in the cost to develop or manufacture our products under fixed-price contracts may cause us to experience unreimbursed cost overruns. Our future revenues are inherently unpredictable, our operating results are likely to fluctuate from period to period, and if we fail to meet the expectations of securities analysts or investors, our stock price could decline significantly. Our market is subject to rapid technological change, and to compete effectively, we must continually introduce new signal processing solutions and create contractual obligations that achieve market acceptance. Our results of operations could be negatively impacted if we are required to write off inventory deemed not saleable or usable. We may lose sales if our suppliers fail to meet our needs. Our headquarters and most of our operations are located in California where natural disasters may occur, resulting in disruption to our business. Delays in the receipt of contracts could negatively impact our business. Our failure to protect our intellectual property may significantly harm our business. Claims that we infringe third-party intellectual property rights could result in significant expenses or restrictions on our ability to sell our products. Continued compliance with new regulatory and accounting requirements will be challenging and is likely to cause our general and administrative expenses to increase and impact our future financial position and results of operations. Changes in stock option accounting rules are expected to adversely impact our operating results prepared in accordance with generally accepted accounting principles.

Full 10-K form ▸

741696--1/17/2006--APPLIED_SIGNAL_TECHNOLOGY_INC