Polaris 2010 Annual Report Download - page 33

logistical expenses and increased operational efficiencies, we give no assurance that we will be successful in
implementing the realignment efforts or that the amounts of our transition costs or our cost savings will be as
anticipated. Other risks and uncertainties in connection with the realignment initiatives include, but are not limited
to, failing to ensure that:
• there is no negative impact to product quality or delivery to customers as a result of shifting capacity;
• adequate raw material and other service providers are available to meet the needs at the new production
location;
• equipment can be successfully removed, transported and re-installed; and
• adequate supervisory, production and support personnel are available to accommodate the shift in
production.
In the event any of the risks or uncertainties related to the manufacturing realignment initiatives occurs, we may not
recoup our investment, and we could experience lost future sales and increased operating costs as well as customer
relations problems, which could have a material adverse effect on our results of operations.
Increases in the cost of raw material, commodity and transportation costs and shortages of certain raw
materials could negatively impact our business.
The primary commodities used in manufacturing our products are aluminum, steel and plastic resins as well as
diesel fuel to transport the products. Our profitability is affected by significant fluctuations in the prices of the raw
materials and commodities we use in our products. We may not be able to pass along any price increases in our raw
materials to our customers. As a result, an increase in the cost of raw materials, commodities, labor or other costs
associated with the manufacturing of our products could increase our costs of sales and reduce our profitability.
Our reliance upon patents, trademark laws, and contractual provisions to protect our proprietary rights
may not be sufficient to protect our intellectual property from others who may sell similar products and
may lead to costly litigation.
We hold patents and trademarks relating to various aspects of our products, such as our patented “on demand”
all-wheel drive, and believe that proprietary technical know-how is important to our business. Proprietary rights
relating to our products are protected from unauthorized use by third parties only to the extent that they are covered
by valid and enforceable patents or trademarks or are maintained in confidence as trade secrets. We cannot be
certain that we will be issued any patents from any pending or future patent applications owned by or licensed to us
or that the claims allowed under any issued patents will be sufficiently broad to protect our technology. In the
absence of enforceable patent or trademark protection, we may be vulnerable to competitors who attempt to copy
our products, gain access to our trade secrets and know-how or diminish our brand through unauthorized use of our
trademarks, all of which could adversely affect our business. Others may initiate litigation to challenge the validity
of our patents, or allege that we infringe their patents, or they may use their resources to design comparable products
that do not infringe our patents. We may incur substantial costs if our competitors initiate litigation to challenge the
validity of our patents, or allege that we infringe their patents, or if we initiate any proceedings to protect our
proprietary rights. If the outcome of any such litigation is unfavorable to us, our business, operating results, and
financial condition could be adversely affected. Regardless of whether litigation relating to our intellectual property
rights is successful, the litigation could significantly increase our costs and divert management’s attention from
operation of our business, which could adversely affect our results of operations and financial condition. We also
cannot be certain that our products or technologies have not infringed or will not infringe the proprietary rights of
others. Any such infringement could cause third parties, including our competitors, to bring claims against us,
resulting in significant costs, possible damages and substantial uncertainty.
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