Exhibit 99.1
FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS
We participate in markets that are often subject to uncertain economic conditions, which makes it difficult to estimate growth in our markets and, as a result, future income and expenditures. |
We depend on the U.S. Government for a significant portion of our revenues, and the loss of this relationship or a shift in U.S. Government funding could have adverse consequences on our future business. |
We depend significantly on our U.S. Government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund one or more of these contracts could have an adverse impact on our business. |
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Generally, U.S. Government contracts are subject to oversight audits by U.S. Government representatives. In addition, the contracts generally contain provisions permitting termination, in whole or in part, without prior notice at the U.S. Government’s convenience upon the payment of compensation only for work done and commitments made at the time of termination. We can give no assurance that one or more of our U.S. Government contracts will not be terminated under these circumstances. Also, we can give no assurance that we would be able to procure new contracts to offset the revenues lost as a result of any termination of our U.S. Government contracts. Because a significant portion of our revenues are dependent on our procurement, performance and payment under our U.S. Government contracts, the loss of one or more large contracts could have an adverse impact on our financial condition.
Our government business also is subject to specific procurement regulations and a variety of socioeconomic and other requirements. These requirements, although customary in U.S. Government contracts, increase our performance and compliance costs. These costs might increase in the future, thereby reducing our margins, which could have an adverse effect on our financial condition. Failure to comply with these regulations and requirements could lead to suspension or debarment from U.S. Government contracting or subcontracting for a period of time. Among the causes for debarment are violations of various statutes, including those related to procurement integrity, export control, U.S. Government security regulations, employment practices, protection of the environment, accuracy of records and the recording of costs and foreign corruption. The termination of a U.S. Government contract or relationship as a result of any of these acts would have an adverse impact on our operations and could have an adverse effect on our reputation and ability to procure other U.S. Government contracts in the future.
We enter into fixed-price contracts that could subject us to losses in the event that we have cost overruns. |
We derive a substantial portion of our revenues from international revenues and are subject to the risks of doing business in foreign countries, including fluctuations in foreign currency exchange rates. |
• | Currency exchange controls, fluctuations of currency and currency revaluations; | |
• | The laws, regulations and policies of foreign governments relating to investments and operations, as well as U.S. laws affecting the activities of U.S. companies abroad; | |
• | Changes in regulatory requirements, including imposition of tariffs or embargoes, export controls and other trade restrictions; | |
• | Uncertainties and restrictions concerning the availability of funding, credit or guarantees; | |
• | The difficulty of managing an organization doing business in many countries; | |
• | Import and export licensing requirements and regulations, as well as unforeseen changes in export regulations; | |
• | Uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract clauses; and | |
• | Rapid changes in government, economic and political policies, political or civil unrest or the threat of international boycotts or U.S. anti-boycott legislation. |
While these factors or the impact of these factors are difficult to predict, any one or more of them could adversely affect our operations in the future.
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Our future success will depend on our ability to develop new products that achieve market acceptance. |
• | Identify emerging technological trends in our target markets; | |
• | Develop and maintain competitive products; | |
• | Enhance our products by adding innovative features that differentiate our products from those of our competitors; and | |
• | Manufacture and bring cost-effective products to market quickly. |
We believe that, in order to remain competitive in the future, we will need to continue to develop new products, which will require the investment of significant financial resources in new product development. The need to make these expenditures could divert our attention and resources from other projects, and we cannot be sure that these expenditures ultimately will lead to the timely development of new products. Due to the design complexity of some of our products, we may experience delays in completing development and introducing new products in the future. Any delays could result in increased costs of development or redirect resources from other projects. In addition, we cannot provide assurances that the markets for our products will develop as we currently anticipate. The failure of our products to gain market acceptance could reduce significantly our revenues and harm our business. Furthermore, we cannot be sure that our competitors will not develop competing products that gain market acceptance in advance of our products or that our competitors will not develop new products that cause our existing products to become obsolete. If we fail in our new product development efforts or our products fail to achieve market acceptance more rapidly than those of our competitors, our revenues will decline and our business, financial condition and results of operations will be adversely affected.
We cannot predict the consequences of future geo-political events, but they may affect adversely the markets in which we operate, our ability to insure against risks, our operations or our profitability. |
We have made, and may continue to make, strategic acquisitions that involve significant risks and uncertainties. |
• | Difficulty in integrating newly acquired businesses and operations in an efficient and cost-effective manner and the risk that we encounter significant unanticipated costs or other problems associated with integration; | |
• | Challenges in achieving strategic objectives, cost savings and other benefits expected from acquisitions; | |
• | Risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets; | |
• | Risk that we assume significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying parties; | |
• | Potential loss of key employees of the acquired businesses; and | |
• | Risk of diverting the attention of senior management from our existing operations. |
The inability of our subcontractors to perform, or our key suppliers to manufacture and deliver our components or products, could cause our products to be produced in an untimely or unsatisfactory manner. |
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Third parties have claimed in the past and may claim in the future that we are infringing upon their intellectual property rights, and third parties may infringe upon our intellectual property rights. |
The outcome of litigation or arbitration in which we are involved is unpredictable and an adverse decision in any such matter could have a material adverse affect on our financial position and results of operations. |
We are subject to customer credit risk. |
The fair values of our portfolio of passive investments are subject to significant price volatility or erosion. |
Developing new technologies entails significant risks and uncertainties. |
We have significant operations in Florida that could be impacted in the event of a hurricane and operations in California that could be impacted in the event of an earthquake. |
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