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EXHIBIT 99
FORWARD LOOKING STATEMENTS
The Company is filing this cautionary statement to take advantage of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. This Form 10-K, any Form 10-Q, the Company's Annual Report to
Shareholders, or any Form 8-K of the Company, news releases or any other written
or oral statements made by or on behalf of the Company may include
forward-looking statements which reflect the current views of the Company
regarding future developments, as future events and future financial
performance. The words "believe", "expect", "anticipate", "intends", "estimate",
"forecast", "plans", "seeks", "trends", "project" and similar expressions
identify forward-looking statements.
The Company wishes to caution readers that any forward-looking
statements made by or on behalf of the Company are subject to uncertainties and
other factors that could cause actual results to differ materially from such
statements. The following important factors, among others, in some cases have
affected, and in the future could affect, the Company's actual results and could
cause its actual results in fiscal 1999 and beyond to differ materially from
those expressed in any forward-looking statements made by, or on behalf of, the
Company. Though the Company has attempted to list the important factors, other
factors may in the future prove to be more important. Factors emerge from time
to time and it is not possible for management to predict all of such factors,
nor can it assess the impact of each such factor on the business or the extent
to which any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking statements.
Investors are cautioned not to place undue reliance on such
forward-looking statements as they speak only of the Company's opinions at the
time the statement was made. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
RISKS ASSOCIATED WITH TECHNOLOGICAL CHANGE AND THE DEVELOPMENT AND
ACCEPTANCE OF NEW PRODUCTS. The markets for the Company's products and services
are characterized by rapid and significant technological change, changing market
conditions, frequent product enhancements and new product introductions and
evolving industry standards. The introduction of products embodying new
technologies or the emergence of new industry trends or standards can render
existing products or products under development obsolete or uncompetitive. The
Company's ability to anticipate changes in technology and industry trends or
standards and successfully develop and introduce new products on a timely basis
will be a significant factor in the Company's ability to grow and remain
competitive. Industry acceptance of new technologies developed by the Company
may be slow to develop due to, among other things, lack of available capital in
some industries, existing regulations written specifically for older
technologies and general unfamiliarity of users with new technologies.
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RISK REGARDING GROWTH POTENTIAL. Certain of the markets in which the
Company competes have been flat or declining over the past several years. The
Company has and continues to identify a number of strategies it believes will
allow it to grow its business, including developing new applications for its
technologies; strengthening its presence in selected geographic markets;
introducing enhanced products; and acquiring product lines or complementary
businesses. No assurance can be given that the Company will be able to
successfully implement its growth strategies, or that these strategies will
result in growth of the Company's business.
RISKS ASSOCIATED WITH COMPETITION. Many of the Company's foreign and
domestic competitors have more extensive engineering, manufacturing, marketing,
financial and personnel resources than the Company, and it believes its success
in competing with other manufacturers of precision instrumentation depends on
its engineering, manufacturing and marketing skills; the price, quality and
reliability of its products; and its delivery and service capabilities. The
Company anticipates increasing pricing pressures from current and future
competitors in certain of the markets for its products. In addition, the Company
believes that technological change, regulatory change and industry consolidation
or new entrants may cause rapid evolution in the competitive environment of the
Company's business, the full scope and nature of which is difficult to predict
at any point in time. Increased competition could result in price reductions,
reduced margins and loss of market share by the Company. There can be no
assurance that the Company will be able to compete successfully with its
existing or new competitors or that competitive pressures faced by the Company
will not materially and adversely affect its business, operating results and
financial condition.
FLUCTUATIONS IN OPERATING RESULTS. Operating results may fluctuate
significantly from quarter to quarter due to several factors, including, without
limitation, the volume and timing of orders from, and shipments to, major
customers, the timing of and the ability to obtain new customer contracts, the
timing of new product announcements, the availability of materials and
components, overall level of capital expenditures by various industries and
governments, market acceptance of new and enhanced versions of the Company's
products, and variations in the mix of products sold. The Company's expense
levels are based in part on expectations of future revenues. If revenue levels
in a particular period do not meet expectations, operating results will be
adversely affected. In addition, the Company's results of operations are
sometimes subject to seasonal factors. The Company historically has experienced
a stronger demand for its products in the third and fourth quarter, primarily as
a result of customer budget cycles. There can be no assurance that these
historical seasonal trends will continue in the future.
RISKS ASSOCIATED WITH ACQUISITIONS. One of the Company's growth
strategies is to supplement its internal growth with the acquisition of
businesses, product lines and technologies that complement or augment the
Company's existing product lines. Businesses that the Company has acquired, or
may seek to acquire in the future, may be marginally profitable or unprofitable.
In order for any acquired businesses to achieve the level of profitability
desired by the Company, the Company must successfully change operations and
improve market penetration. No assurance can be given that
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the Company will be successful in this regard. Promising acquisitions are
difficult to identify and complete for a number of reasons, including excessive
valuations by sellers and competition among prospective buyers. There can be no
assurance that the Company will be able to complete pending or future
acquisitions. In order to finance any such acquisitions, it may be necessary for
the Company to raise additional funds, either through public or private
financing. Any equity or debt financing, if available at all, may be on terms
which are not favorable to the Company and may result in dilution to the
Company's shareholders.
CHANGING REGULATORY ENVIRONMENT. The Company's sales of instruments
designed to enhance the safety, comfort and health of people in working
environments is subject to regulation in the United States and other countries.
The Company's business in these market areas is dependent upon the continued
growth of concern for the comfort, safety and health of people in the United
States and internationally. Federal and state regulatory agencies, including the
Occupational Safety and Health Administration, the Environmental Protection
Agency, the National Institute for Occupational Health and Safety and others,
regulate certain practices and operations of domestic and international
customers. While new regulations can represent opportunities for parts of the
Company's business, there can be no assurance that regulations will be adopted
when expected, that they will be adopted in the form expected, that they will be
accepted by various industries or that they will be enforced. Also, changes or
cancellation of some regulations could have an adverse affect on the Company's
sales or expected sales.
RISKS OF CAPITAL SPENDING POLICIES AND GOVERNMENT FUNDING. The
Company's customers include industrial companies, laboratories, government
agencies, and public and private research institutions. The capital spending of
these entities can have a significant effect on the demand for the Company's
products. Such spending levels are based on a wide variety of factors, including
the resources available to make such purchases, the spending priorities among
various types of research equipment, public policy, and the effects of different
economic cycles. Any decrease in capital spending by any of the customer groups
that account for a significant portion of the Company's sales could have a
material adverse effect on the Company's business and results of operations.
INTERNATIONAL RISKS. Export sales accounted for 33%, 38% and 36% of the
Company's net sales in fiscal 1998, 1997 and 1996, respectively, and export
sales could increase as a percentage of net sales in the future. The Company
owns manufacturing operations in Germany. Due to its export sales and, to a
lesser extent, its international manufacturing operations, the Company is
subject to the risks of conducting business internationally. These include
unexpected changes in, or impositions of, legislative or regulatory
requirements; fluctuations in the U.S. dollar, which could materially and
adversely affect U.S. dollar revenues or operating expenses; tariffs and other
barriers and restrictions, potentially longer payment cycles; greater difficulty
in accounts receivable collection; potentially adverse taxes and the burdens of
complying with a variety of foreign laws and standards. The Company also is
subject to general risks such as political and economic instability and changes
in diplomatic and trade relationships in connection with its international
operations. There can be no assurance that such factors will not materially and
adversely affect the Company's operations in the future or require the Company
to modify significantly its current business practices. In addition, the
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laws of certain foreign countries may not protect the Company's proprietary
technology to the same extent as do the laws of the United States.
RISKS ASSOCIATED WITH INTELLECTUAL PROPERTY. The Company's future
success depends in part upon its proprietary technology. Although the Company
attempts to protect its proprietary technology through patents, copyrights and
trade secrets, it also believes that its future success will depend upon product
development, technological expertise and distribution channels. There can be no
assurance that the Company will be able to protect its technology, or that
competitors will not be able to develop similar technology independently. The
Company may in the future receive from third parties, including some of its
competitors, notices claiming that it is infringing third-party patents or other
proprietary rights. There can be no assurance that the Company would prevail in
any litigation over third-party claims or that it would be able to license any
valid and infringed patents on commercially reasonable terms. Furthermore,
litigation, regardless of its outcome, could result in substantial cost to, and
diversion of effort by, the Company. Any litigation or successful infringement
claims by third parties could materially and adversely affect the Company's
business, operating results and financial condition.
RISK OF FLUCTUATION OF STOCK PRICE. The Company believes factors such
as announcements of new products by the Company or its competitors, quarterly
fluctuations in the Company's financial results, customer contracts awards,
developments in regulation and general conditions in the various markets where
the Company's products are sold have caused and are likely to continue to cause
the market price of the Company's common stock to fluctuate substantially. In
addition, instrumentation company stocks have experienced significant price and
volume fluctuations that often have been unrelated to the operating performance
of such companies. This market volatility may adversely affect the market price
of the Company's common stock.