845434--6/26/2006--INFOCUS

related topics

{customer, product, revenue}

{operation, international, foreign}

{acquisition, growth, future}

{product, market, service}

{personnel, key, retain}

{property, intellectual, protect}

{cost, operation, labor}

{product, liability, claim}

{condition, economic, financial}

{regulation, change, law}

{financial, litigation, operation}

{stock, price, operating}

{competitive, industry, competition}

{system, service, information}

We will need to raise additional financing if our financial results do not improve. Our restructuring plan may not be successful. If our contract manufacturers experience any delay, disruption or quality control problems in their operations, we could lose market share and revenues, and our reputation may be harmed. Our competitors may have greater resources and technology, and we may be unable to compete with them effectively. If we are unable to manage the cost of older products or successfully introduce new products with higher gross margins, our revenues may decrease or our gross margins may decline. Our revenues and profitability can fluctuate from period to period and are often difficult to predict for particular periods due to factors beyond our control. Our operating expenses and portions of our costs of revenues are relatively fixed and we may have limited ability to reduce expenses quickly in response to any revenue shortfalls. If we do not effectively manage our sales channel inventory and product mix, we may incur costs associated with excess inventory or experience declining gross margins. If we cannot continually develop new and innovative products and integrate them into our business, we may be unable to compete effectively in the marketplace. If we are unable to provide our third-party contract manufacturers with an accurate forecast of our product requirements, we may experience delays in the manufacturing of our products and the costs of our products may increase. Our failure to anticipate changes in the supply of product components or customer demand may result in excess or obsolete inventory that could adversely affect our gross margins. Our contract manufacturers may be unable to obtain critical components from suppliers, which could disrupt or delay our ability to procure our products. Product defects resulting in a large-scale product recall or successful product liability claims against us could result in significant costs or negatively impact our reputation and could adversely affect our business results and financial condition. SMT, our joint venture with TCL Corporation, faces a number of uncertainties and may ultimately be unsuccessful in implementing its business plan. Our strategic investment and partnership strategy poses risks and uncertainties typical of such arrangements. The importation investigation of our Chinese subsidiary may not be resolved favorably and may result in a charge to our statement of operations. Customs or other issues involving product delivery from our contract manufacturers could prevent us from timely delivering our products to our customers. A deterioration in general global economic condition could adversely affect demand for our products. We are subject to risks associated with exporting products outside the United States. We are exposed to risks associated with our international operations. Currency exchange rate fluctuations may lead to decreases in our financial results. Our reliance on third party logistics providers may result in customer dissatisfaction or increased costs. We may be unsuccessful in protecting our intellectual property rights. If we become subject to intellectual property infringement claims, we could incur significant expenses and could be prevented from selling specific products. We rely on large distributors, national retailers and other large customers for a significant portion of our revenues, and changes in price or purchasing patterns could lower our revenues or gross margins. In order to compete, we must attract, retain and motivate key employees, and our failure to do so could have an adverse effect on our results of operations. We depend on our officers, and, if we are not able to retain them, our business may suffer. Our results of operations could vary as a result of the methods, estimates and judgments we use in applying our accounting policies.

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845434--6/26/2006--INFOCUS_CORP