914712--10/14/2008--ModusLink_Global_Solutions

related topics

{customer, product, revenue}

{cost, operation, labor}

{system, service, information}

{acquisition, growth, future}

{stock, price, operating}

{product, market, service}

{tax, income, asset}

{operation, international, foreign}

{property, intellectual, protect}

{personnel, key, retain}

{investment, property, distribution}

{competitive, industry, competition}

{condition, economic, financial}

{regulation, change, law}

We derive a substantial portion of our revenue from a small number of clients and adverse industry trends or the loss of any of those clients could significantly damage our business. We may have difficulty achieving and sustaining operating profitability, and if we deplete our working capital balances, our business will be materially and adversely affected. Our quarterly results may fluctuate significantly. A reduction in consumer demand may harm our results of operations. Change in our effective tax rate may harm our results of operations. Because our contracts do not contain minimum purchase requirements and we sell primarily on a purchase order basis, we are subject to uncertainties and variability in demand by clients, which could decrease revenue and adversely affect our financial results. We must maintain adequate levels of inventory in our supply chain management business in order to meet client needs, which present risks to our financial position and operating results. Our failure to meet client demands could result in lost revenues, increased expenses and negative publicity. If we are not able to establish client sites where requested, or if we fail to retain key clients at established sites, our client relationships, revenue and expenses could be seriously harmed. We may encounter problems in our efforts to increase operational efficiencies. We are subject to risks of operating internationally. We may be affected by strikes, work stoppages and slowdowns by our employees. We may have problems raising capital we need in the future. A decline in the technology sector could reduce our revenue. The gross margins in the supply chain management business are low, which magnify the impact of variations in revenue and operating costs on our financial results. We will continue to be subject to intense competition. The physical or intellectual property of our clients may be damaged, misappropriated, stolen or lost while in our possession, subjecting us to litigation and other adverse consequences. We could be subject to infringement claims and other liabilities. We may be liable if third parties misappropriate personal information of our clients customers. We depend on third-party software, systems and services. We depend on important employees, and the loss of any of those employees may harm our business. Our strategy of expanding our business through acquisitions of other businesses and technologies presents special risks. The price of our common stock has been volatile and may fluctuate, in part, based on the value of our assets. We may incur impairments to goodwill or long-lived assets. Venture capital investing is risky and highly speculative.

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914712--10/14/2008--ModusLink_Global_Solutions_Inc