Citrix 2009 Annual Report Download - page 36

products and Citrix Repeater appliance products are primarily performed by a third-party contract manufacturer.
We do not typically have long-term supply agreements with our suppliers; and, in most cases, we purchase the
products and components on an as-needed purchase order basis. In some instances, such as with respect to our
application networking products in our Datacenter and Cloud Solutions portfolio, we maintain internal
manufacturing capabilities to supplement third-party contract manufacturers and provide us with the flexibility
needed to meet our product delivery requirements on sales orders on a limited basis. While we have not, to date,
experienced any material difficulties or delays in the manufacture and assembly of our products, our suppliers
may encounter problems during manufacturing due to a variety of reasons, including failure to follow specific
protocols and procedures, failure to comply with applicable regulations, equipment malfunction and
environmental factors, any of which could delay or impede their ability to meet our demand. Our reliance on
these third-party suppliers and contract manufacturers subjects us to risks that could harm our business,
including:
• our suppliers, especially new suppliers, may make errors in manufacturing components that could
negatively affect the efficacy of our products or cause delays in shipment;
• our suppliers manufacture products for a range of customers, and fluctuations in demand for the
products these suppliers manufacture for others may affect their ability to deliver components and
products to us in a timely manner; and
• our suppliers may encounter financial hardships unrelated to our demand for components, which could
inhibit their ability to fulfill our orders and meet our requirements.
There may be delays associated with establishing additional or replacement suppliers, particularly for
components that are available only from limited sources. Any interruption or delay in the supply of products or
components, or our inability to obtain products or components from alternate sources at acceptable prices in a
timely manner, could impair our ability to meet the demand of our customers and adversely affect our business,
financial condition or results of operations.
Our products could contain errors that could delay the release of new products and may not be detected until
after our products are shipped.
Despite significant testing by us and by current and potential customers, our products, especially new
products or releases or acquired products, could contain errors. In some cases, these errors may not be discovered
until after commercial shipments have been made. Errors in our products could delay the development or release
of new products and could adversely affect market acceptance of our products. Additionally, our products depend
on third-party products, which could contain defects and could reduce the performance of our products or render
them useless. Because our products are often used in mission-critical applications, errors in our products or the
products of third parties upon which our products rely could give rise to warranty or other claims by our
customers, which may have a material adverse effect on our business, financial condition and results of
operations.
We have entered into a credit facility agreement that restricts our ability to conduct our business and failure to
comply with such agreement may have an adverse effect on our business, liquidity and financial position.
We, along with our subsidiary, Citrix Systems International GmbH, maintain a credit facility agreement that
contains financial covenants tied to a maximum consolidated leverage ratio and minimum interest coverage,
among other things. The credit facility agreement also contains affirmative and negative covenants, including
limitations related to our ability to incur future indebtedness, contingent obligations or liens, conduct certain
mergers or acquisitions, make certain investments and loans, alter our capital structure, sell stock or assets and
pay dividends. If we fail to comply with these covenants or any other provision of the credit facility agreement,
we may be in default under the credit facility agreement, and we cannot assure you that we will be able to obtain
the necessary waivers or amendments of such default. Upon an event of default under our credit facility
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