3Ware 2002 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2002 3Ware annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 79

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79

Our operating results are subject to fluctuations because we rely heavily on international sales.
International sales account for a significant part of our revenues and may account for an increasing portion
of our future revenues. As a result, an increasing portion of our revenues may be subject to certain risks,
including:
• foreign currency exchange fluctuations;
• changes in regulatory requirements;
• tariffs and other barriers;
• timing and availability of export licenses;
• political and economic instability;
• difficulties in accounts receivable collections;
• difficulties in staffing and managing foreign subsidiary operations;
• difficulties in managing distributors;
• difficulties in obtaining governmental approvals for communications and other products;
• the burden of complying with a wide variety of complex foreign laws and treaties; and
• potentially adverse tax consequences.
We are subject to risks associated with the imposition of legislation and regulations relating to the import or
export of high technology products. We cannot predict whether quotas, duties, taxes or other charges or
restrictions upon the importation or exportation of our products will be implemented by the United States or
other countries. Because sales of our products have been denominated to date primarily in United States dollars,
increases in the value of the United States dollar could increase the price of our products so that they become
relatively more expensive to customers in the local currency of a particular country, leading to a reduction in
sales and profitability in that country. Future international activity may result in increased foreign currency
denominated sales. Gains and losses on the conversion to United States dollars of accounts receivable, accounts
payable and other monetary assets and liabilities arising from international operations may contribute to
fluctuations in our results of operations. Some of our customer purchase orders and agreements are governed by
foreign laws, which may differ significantly from United States laws. Therefore, we may be limited in our ability
to enforce our rights under such agreements and to collect damages, if awarded.
Our markets are subject to rapid technological change, so our success depends heavily on our ability to
develop and introduce new products.
The markets for our products are characterized by:
• rapidly changing technologies;
• evolving and competing industry standards;
• short product life cycles;
• changing customer needs;
• emerging competition;
• frequent new product introductions and enhancements;
• increased integration with other functions; and
• rapid product obsolescence.
17