8x8 2001 Annual Report Download - page 35

- new products or new contracts by us, our competitors or their customers; and
- developments with respect to patents or proprietary rights, general market conditions, changes in financial estimates by securities analysts,
and other factors which could be unrelated to, or outside our control.
The stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices
for the common stocks of technology companies and that have often been unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the market price of our common stock. In the past, following periods of volatility in the
market price of a company's securities, securities class action litigation has often been initiated against the issuing company. If our stock price
is volatile, we may also be subject to such litigation. Such litigation could result in substantial costs and a diversion of management's attention
and resources, which would disrupt business and could cause a decline in our operating results. Any settlement or adverse determination in
such litigation would also subject us to significant liability.
THE LOCATION OF OUR HEADQUARTERS FACILITY SUBJECTS US TO THE RISK OF EARTHQUAKES
Our corporate headquarters is located in the San Francisco Bay area of Northern California, a region known for seismic activity. A significant
natural disaster, such as an earthquake, could have a material adverse impact on our business, operating results, and financial condition.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our financial market risk consists primarily of risks associated with international operations and related foreign currencies. We derive a
significant portion of our revenues from customers in Europe and Asia. In order to reduce the risk from fluctuation in foreign exchange rates,
the vast majority of our sales are denominated in U.S. dollars. In addition, all of our arrangements with our semiconductor foundry and
assembly vendors are denominated in U.S. dollars. We have foreign subsidiaries and are thus exposed to market risk from changes in exchange
rates. We have not entered into any currency hedging activities. To date, our exposure to exchange rate volatility has not been significant;
however, there can be no assurance that there will not be a material impact in the future.
We invest our surplus cash and cash equivalents in money market funds that bear variable interest rates, and, accordingly, fluctuations in
interest rates do not have an impact on the fair values of such investments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS
Schedules other than the one listed above have been omitted because they are inapplicable, because the required information has been included
in the financial statements or notes thereto, or the amounts are immaterial.
31
PAGE
----
FINANCIAL STATEMENTS:
Report of Independent Accountants......................... 32
Consolidated Balance Sheets at March 31, 2001 and 2000.... 33
Consolidated Statements of Operations for each of the
three years in the period ended March 31, 2001......... 34
Consolidated Statements of Stockholders' Equity for each
of the three years in the period ended March 31,
2001................................................... 35
Consolidated Statements of Cash Flows for each of the
three years in the period ended March 31, 2001......... 36
Notes to Consolidated Financial Statements................ 37
FINANCIAL STATEMENT SCHEDULE:
Schedule II -- Valuation and Qualifying Accounts.......... 58