865846--12/14/2007--VITAL_SIGNS

related topics

{product, liability, claim}

{regulation, government, change}

{customer, product, revenue}

{product, market, service}

{property, intellectual, protect}

{stock, price, operating}

{cost, regulation, environmental}

{stock, price, share}

{acquisition, growth, future}

{personnel, key, retain}

{competitive, industry, competition}

{gas, price, oil}

{provision, law, control}

{operation, international, foreign}

{control, financial, internal}

{tax, income, asset}

Risks related to the Company s industry Public and private sector health care organizations continue to exert substantial cost containment pressures that could adversely impact the Company s selling prices and profitability. The time and expense needed to obtain regulatory approval and respond to changes in regulatory requirements could adversely affect the Company s ability to commercially distribute its products and services and generate sales revenue. Even after receiving FDA and foreign regulatory clearance or approval, the Company s products may be subject to product recalls, which may harm the Company. The Company may lose significant customers as a result of substantial consolidation within the health care industry. Government and private insurance plans may not reimburse the Company s customers for the Company s products, which could result in reductions in sales or selling prices for Company products. Health care reform proposals are gaining substantial support in the United States Congress and state legislatures and could impact the profitability of the Company s business. Health care legislation and regulation by state legislatures regarding licensure requirements for healthcare professionals could impact the profitability of the Company s business. The Company incurs expenses to comply with environmental, health and safety laws and regulations. Risks related to the Company s business The markets for the Company s products and services are highly competitive, and the Company competes against substantially larger companies. The presence of group purchasing organizations may affect the Company s competitive position, pricing and ultimately profits. The Company could lose customers and its business could be adversely affected if its competitors implement new technologies before the Company does. The Company is dependent on a single supplier for one of its key products. The Company is dependent on a limited number of suppliers for key components of some of its products and delivery delays or the loss of vendors could adversely affect the Company s business. If the Company loses key personnel, or is unable to attract and retain additional highly skilled personnel required to lead the Company and to enable the Company to grow its activities, the Company s business would likely suffer. The Company s success depends upon developing new products and product enhancements, which entails considerable time and expense. Price changes in the raw materials the Company uses could have a material adverse effect on its financial condition and results of operations. If the Company is unable to identify, complete, and integrate future acquisitions, its business may suffer. The Company cannot be certain that its product liability insurance will be sufficient to protect it against significant exposure to product liability risks. The Company manufactures and sells a significant portion of its products in markets outside the United States, subjecting the Company to various risks relating to international activities. If the Company is unable to maintain relationships with distributors, the Company s business may be adversely affected. The Company may not be able to obtain new patents or protect its existing patents, which could enable third-parties to use the Company s technology. The Company s competitive position is dependent in part upon unpatented trade secrets that the Company may not be able to protect. The Company s success is dependent in part on its ability to operate without infringing or misappropriating the proprietary rights of others. Government regulation restricts the manner in which the Company may sell its obstructive sleep apnea products to customers of the Company s sleep centers and the manner in which the Company relates to referring physicians. If the Company is unable to support its continued growth, the Company s business may suffer. A significant shift in technologies or methods used in the treatment of sleep apnea could make the Company s sleep centers and products obsolete or less attractive. If a natural or man-made disaster strikes one or more of the Company s manufacturing facilities, the Company may be unable to manufacture certain products for a substantial amount of time and the Company s revenue and profitability could decline. Requirements associated with the evaluation of internal controls required by Section 404 of the Sarbanes-Oxley Act of 2002 have required and will require significant Company resources and management attention . Risks related to purchasing the Company s common stock The Company s quarterly operating results are subject to fluctuation which may impact its stock price . A substantial portion of the Company s assets includes goodwill and an impairment in the value of goodwill would have the effect of decreasing the Company s earnings or increasing its losses. A large percentage of the Company s outstanding common stock is held by insiders, and, as a result, the trading market for the Company s common stock is less liquid and the Company s stock price can be volatile. The Company s major shareholders exercise significant influence on the Company and they may pursue policies with which other shareholders disagree. The Company s certificate of incorporation, by-laws, and New Jersey law contain provisions that could discourage another company from acquiring the Company and may prevent attempts by its stockholders to replace or remove the Company s current management.

Full 10-K form ▸

865846--12/14/2007--VITAL_SIGNS_INC