3Ware 2001 Annual Report Download - page 41

N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
9.S I G N I F I C A N T C U S T O M E R A N D G E O G R A P H I C I N F O R M AT I O N
During the years ended March 31, 1999, 2000 and 2001, 19%, 26% and 10%, respectively, of net revenues were from
Nortel. In fiscal 1999, 2000 and 2001, Insight Electronics, a domestic distributor, accounted for 13%, 17% and 19%
of net revenues, respectively. Additionally, in 1999, Raytheon Systems Co. accounted for 16% of net revenues.
No other customer accounted for more than 10% of revenues in any fiscal year.
Net revenues by geographic region were as follows:
Year Ended March 31,
(in thousands) 1999 2000 2001
Net revenues:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 79,771 $132,119 $337,644
Europe and Israel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,136 28,980 56,807
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,093 11,253 41,092
$105,000 $172,352 $435,543
1 0 .C O N T I N G E N C I E S
The Company is party to various claims and legal actions arising in the normal course of business, including notifica-
tion of possible infringement on the intellectual property rights of third parties.
Starting in April 2001, a series of similar federal complaints were filed against the Company and its chief executive offi-
cer, chief financial officer and certain other executive officers and directors of the Company. These complaints allege
essentially identical violations of the Securities Exchange Act of 1934 (the “1934 Act”). The complaints have been
brought as purported shareholder class actions under Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 prom-
ulgated thereunder and seek unspecified monetary damages on behalf of the shareholder class. In general, the com-
plaints allege that the Company and the individual defendants misrepresented the Company’s financial prospects for
the fourth quarter of fiscal 2001 to inflate the value of the Company’s stock. We anticipate that the complaints pend-
ing in federal court will be consolidated into a single proceeding. In addition, in May 2001, certain individuals filed
derivative actions against the directors and certain executive officers in the California state courts. These state court
derivative complaints allege overstatement of the financial prospects of the Company, mismanagement, inflation of
stock value, and sale of stock at inflated prices for personal gain during the time period from November 2000 through
February 2001. The Company has not yet responded to any of these lawsuits, and no discovery has been conducted.
The Company believes that the allegations in each of these actions are without merit and intends to defend the actions
vigorously. The actions have been tendered to the Company’s insurance carriers.
Since 1993, the Company has been named as a potentially responsible party (“PRP”) along with a large number of
other companies that used Omega Chemical Corporation (“Omega”) in Whittier, California to handle and dispose of
certain hazardous waste material. The Company is a member of a large group of PRPs that has agreed to fund certain
remediation efforts at the Omega site for which the Company has accrued approximately $100,000. On September
14, 2000, the Company entered into a consent decree with the Environmental Protection Agency, pursuant to which
the Company agreed to fund its proportionate share of the initial remediation efforts at the Whittier site. Although the
ultimate outcome of these matters is not presently determinable, management believes that the resolution of all such
pending matters, net of amounts accrued, will not have a material adverse affect on the Company’s financial position
or liquidity; however, there can be no assurance that the ultimate resolution of these matters will not have a material
impact on the Company’s results of operations in any period.
1 1 .R E L AT E D PA RT Y T R A N S A C T I O N S
In August 2000, the Company made a strategic equity investment of $10 million in Raza Foundries, which is included
in the total strategic equity investments of $28 million as of Ma rch 31, 2001. The Chief Exe c u t i ve Officer and Chairman
of the Board of Di r ectors of Raza Foundries is a member of the Company’s Board of Di re c t o r s .
3 9