Netgear 2004 Annual Report Download - page 39

Table of Contents
Risk Factors Affecting Future Results
Investing in our common stock involves a high degree of risk. The risks described below are not exhaustive of the risks that might
affect our business. Other risks, including those we currently deem immaterial, may also impact our business. Any of the following
risks could materially adversely affect our business operations, results of operations and financial condition and could result in a
complete loss of your investment.
We expect our operating results to fluctuate on a quarterly and annual basis, which could cause our stock price to fluctuate or
decline.
Our operating results are difficult to predict and may fluctuate substantially from quarter-to-quarter or year-to-year for a variety of
reasons, many of which are beyond our control. If our actual revenue were to fall below our estimates or the expectations of public
market analysts or investors, our quarterly and annual results would be negatively impacted and the price of our stock could decline.
Other factors that could affect our quarterly and annual operating results include those listed in this risk factors section of this
Form10-K and others such as:
•
changes in the pricing policies of or the introduction of new products or product enhancements by us or our competitors;
•
changes in the terms of our contracts with customers or suppliers;
•
slow or negative growth in the networking product, personal computer, Internet infrastructure, home electronics and related
technology markets, as well as decreased demand for Internet access;
•
changes in or consolidation of our sales channels and wholesale distributor relationships or failure to manage our sales channel
inventory and warehousing requirements;
•
delay or failure to fulfill orders for our products on a timely basis;
•
our inability to accurately forecast our contract manufacturing needs;
•
delays in the introduction of new or enhanced products by us or market acceptance of these products;
•
an increase in price protection claims, redemptions of marketing rebates, product warranty returns or allowance for doubtful
accounts;
•
operational disruptions, such as transportation delays or failure of our order processing system, particularly if they occur at the
end of a fiscal quarter;and
•
seasonal patterns of higher sales during the second half of our fiscal year, particularly retail-related sales in our fourth quarter.
As a result, period-to-period comparisons of our operating results may not be meaningful, and you should not rely on them as an
indication of our future performance. In addition, our future operating results may fall below the expectations of public market analysts
or investors. In this event, our stock price could decline significantly.
Our future success is dependent on the acceptance of networking products in the small business and home markets into which we
sell substantially all of our products. If the acceptance of networking products in these markets does not continue to grow, we will be
unable to increase or sustain our net revenue, and our business will be severely harmed.
We believe that growth in the small business market will depend, in significant part, on the growth of the number of personal
computers purchased by these end users and the demand for sharing data intensive applications, such as large graphic files. We
believe that acceptance of networking products in the home will depend upon the availability of affordable broadband Internet access
and increased demand for wireless products. Unless these markets continue to grow, our business will be unable to expand, which
could cause the value of your investment to decline. Moreover, if networking functions are integrated more directly into
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2005. EDGAR Online, Inc.