830916--11/17/2009--MULTI_FINELINE_ELECTRONIX

related topics

{customer, product, revenue}

{property, intellectual, protect}

{product, market, service}

{stock, price, operating}

{system, service, information}

{condition, economic, financial}

{stock, price, share}

{loan, real, estate}

{control, financial, internal}

{cost, operation, labor}

{acquisition, growth, future}

{tax, income, asset}

{cost, regulation, environmental}

{operation, international, foreign}

{personnel, key, retain}

{provision, law, control}

{cost, contract, operation}

{competitive, industry, competition}

FACTORS THAT MAY AFFECT OUR OPERATING RESULTS We are heavily dependent upon the wireless and consumer electronics industries, and any downturn in these sectors may reduce our net sales. We depend on a limited number of key customers for significant portions of our net sales and if we lose business with any of these customers, our net sales could decline substantially. We will have difficulty selling our products if customers do not design our flexible printed circuit products into their product offerings or our customers product offerings are not commercially successful. Our customers have in the past and likely will continue to cancel their orders, change production quantities, delay production or qualify additional vendors, any of which could reduce our net sales and/or increase our expenses. Our industry is extremely competitive, and if we are unable to respond to competitive pressures we may lose sales and our market share could decline. Our products and their terms of sale are subject to various pressures from our customers and competitors, any of which could harm our gross profits. Significant product failures could harm our reputation and our business. Problems with manufacturing yields and/or our inability to ramp up production could impair our ability to meet customer demand for our products. We must develop and adopt new technology and manufacture new products and product features in order to remain competitive, and we may not be able to do so successfully. If we are unable to attract or retain personnel necessary to operate our business, our ability to develop and market our products successfully could be harmed. We must continue to be able to procure raw materials and components on commercially reasonable terms to manufacture our products profitably. Our global operations expose us to additional risk and uncertainties. We are in the process of increasing our manufacturing capacity, and we may have difficulty managing these changes. If we encounter problems during the upgrade of our information systems, we could experience a disruption of our operations and unanticipated increases in our costs. WBL Corporation Limited beneficially owns approximately 59% of our outstanding common stock and is able to exert influence over us and our major corporate decisions. WBL is currently unable to vote its shares on specified matters that require stockholder approval without obtaining its own stockholders and regulatory approval and it is possible that WBL s stockholders or the relevant regulators may not approve the proposed corporate action. Our business requires significant investments in capital equipment, facilities and technological improvements, and we may not be able to obtain sufficient funds to make such capital expenditures. The global credit market crisis and economic weakness may adversely affect our earnings, liquidity and financial condition. A portion of our investment portfolio is in auction rate securities. We are subject to the risk of increased income tax rates and other taxes. If we fail to secure or protect our intellectual property rights, competitors may be able to use our technologies, which could weaken our competitive position and harm our business. We may be sued by third parties for alleged infringement of their proprietary rights. Complying with environmental laws and regulations may increase our costs and reduce our profitability. Potential future acquisitions could be difficult to integrate, divert the attention of key management personnel, disrupt our business, dilute stockholder value and adversely affect our financial results. We face potential risks associated with loss, theft or damage of our property or property of our customers. Litigation may distract us from operating our business. The trading price of our common stock is volatile. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results. Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable. Because we do not intend to pay dividends, our stockholders will benefit from an investment in our common stock only if our stock price appreciates in value.

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830916--11/17/2009--MULTI_FINELINE_ELECTRONIX_INC