840883--3/16/2007--BTU_INTERNATIONAL

related topics

{cost, operation, labor}

{operation, international, foreign}

{provision, law, control}

{product, market, service}

{system, service, information}

{condition, economic, financial}

{customer, product, revenue}

{operation, natural, condition}

{control, financial, internal}

{acquisition, growth, future}

{tax, income, asset}

{regulation, change, law}

{personnel, key, retain}

Risks Relating to Our Business We are subject to cyclical downturns in the electronics and semiconductor industries. We have shifted a significant and growing portion of our production capacity to a new and expanding manufacturing facility in Shanghai, China. We may encounter manufacturing problems associated with managing these operations. In the past two years, we have substantially improved our global supply chain and reduced our material costs. Failure to maintain these cost reductions would negatively affect our profit margins. Sales of our products to the alternative energy markets are subject to substantial risks. Failure to realize the full value of the R.T.C. and AtmoPlas acquisitions could negatively affect the Company s profitability. If we are unable to increase sales and reduce costs, our profitability may be affected negatively. Our future success will depend on our ability to effectively develop and market our products against those of our competitors. Our international sales and operations are subject to the economic, political, legal and business environments of the countries in which we do business, and our failure to operate successfully or adapt to changes in these environments could cause our international sales and operations to be limited or disrupted. Over the past few years, a majority of our revenue is generated from sales in the Asia Pacific region. Our operations are particularly vulnerable to instability in this region and competition from organizations based in this region. The cost of public company regulatory compliance in the United States places the Company at a competitive disadvantage in its primary geographical market. In China our new business systems to manage our operations are still being developed. If they are not developed and implemented, it could have a material adverse effect on our business. Our primary computer business system in the U.S. is outdated. A significant malfunction could disrupt our business operations. If we fail to maintain positive relationships with key personnel, we may be unable to successfully grow our business. The Company has identified two material weaknesses in its internal controls over financial reporting which could have adverse consequences. The income tax percentage on the Company s consolidated income before taxes is subject to variables beyond our control. Failure of critical suppliers to deliver sufficient quantities of parts in a timely and cost-effective manner would adversely impact our operations. The occurrence of natural disasters in the Asia Pacific region may adversely impact our operations and sales. Provisions in our organizational documents could prevent or frustrate attempts by stockholders to replace our current management and could make acquisitions more difficult. Our officers and directors may be able to block proposals for a change in control.

Full 10-K form ▸

840883--3/16/2007--BTU_INTERNATIONAL_INC