742550--1/23/2009--XETA_TECHNOLOGIES

related topics

{customer, product, revenue}

{product, market, service}

{stock, price, operating}

{system, service, information}

{operation, natural, condition}

{condition, economic, financial}

{personnel, key, retain}

{property, intellectual, protect}

{tax, income, asset}

{regulation, change, law}

Telephone service in hotel rooms is now a net cost to most hotels and feature rich voice applications are of modest value in most hospitality locations. As a result, the value of our product and service offerings to this market is declining. Success in our overall strategy, a key component of which is to focus on the marketing of advanced communications products and applications and related services, may be difficult or even prevented by a variety of factors. We may experience severe declines in our service revenues from the loss of a major wholesale services customer. Our manufacturers could change their incentive programs, which may affect our operating results. Microsoft Corporation has entered the UC market, which could result in significant disruption to the current communications market landscape. We face intense competition fueled by rapid changes in the technologies and markets in which we operate. The success of our business depends significantly upon our ability to retain and recruit highly skilled personnel. The technology we sell is highly complex and changes rapidly, increasing our reliance upon the manufacturers for technical assistance and increasing the risk that our inventories on hand will become obsolete. The loss of our highest level dealer certifications with any of our manufacturers could negatively impact our ability to differentiate our products and services in the market and could negatively impact our operating results. The introduction of new products could result in reduced revenues, reduced gross margins, reduced customer satisfaction, and longer collection periods. Compliance with new corporate governance and accounting regulations may require a material increase in our operating expenses beginning in fiscal 2010. A significant portion of our expected growth in services revenues is dependent upon our relationship with a few wholesale customers. Hitachi s decision to cease manufacturing communications systems for the hospitality market has caused some uncertainty with respect to our future relationship with our Hitachi installed base of hospitality customers. We are connecting our products to our customers computer networks and integrating these products to existing customer-owned software applications such as the Microsoft Office Suite of desktop software. In most cases, we are integrating our products to mission-critical networks and systems owned by the customer such as contact centers. Problems with the implementation of these products could cause disruption and loss of revenues and gross profits to our customers entire operations. We expect our gross margins to vary over time. If our dealer agreements with the original equipment manufacturers are terminated prematurely or unexpectedly, our business could be adversely affected. We are dependent upon a few suppliers. We might have to record a significant goodwill impairment loss in the event our business was to suffer a severe decline. Our stock price may continue to be volatile Our business is subject to the risks of tornadoes and other natural catastrophic events and to interruptions caused by man-made problems such as computer viruses or terrorism. We may be subject to infringement claims and litigation, which could cause us to incur significant expenses or prevent us from selling certain products and services.

Full 10-K form ▸

742550--1/23/2009--XETA_TECHNOLOGIES_INC