SanDisk 2003 Annual Report Download - page 44

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Future rapid growth may strain our operations.
We must continue to hire, train, motivate and manage our employees to achieve future growth. In the
past, we have from time to time experienced diÇculty hiring the necessary engineering, sales and marketing
personnel to support our growth. In addition, we must make a signiÑcant investment in our information
management systems to support increased manufacturing, as well as accounting and other management
related functions. Our systems, procedures and controls may not be adequate to support rapid growth in the
future, which could in turn harm our business, Ñnancial condition and results of operations.
Our success depends on key personnel, including our executive oÇcers, the loss of whom could disrupt our
business.
Our success greatly depends on the continued contributions of our senior management and other key
research and development, sales, marketing and operations personnel, including Dr. Eli Harari, our founder,
president and chief executive oÇcer. We do not maintain employment agreements with our executive oÇcers.
Our success will also depend on our ability to recruit additional highly skilled personnel. We cannot assure you
that we will be successful in hiring or retaining such key personnel, or that any of our key personnel will
remain employed with us.
We may make acquisitions that are dilutive to existing stockholders, result in unanticipated accounting
charges or otherwise adversely aÅect our results of operations, and result in diÇculties in assimilating and
integrating the operations, personnel, technologies, products and information systems of acquired companies or
businesses.
We may grow our business through business combinations or other acquisitions of businesses, products or
technologies that allow us to complement our existing product oÅerings, expand our market coverage, increase
our engineering workforce or enhance our technological capabilities. We continually evaluate and explore
strategic opportunities as they arise, including business combinations, strategic partnerships, capital invest-
ments and the purchase, licensing or sale of assets.
If we issue equity securities in connection with an acquisition, the issuance may be dilutive to our existing
stockholders. Alternatively, acquisitions made entirely or partially for cash would reduce our cash reserves.
Acquisitions may require signiÑcant capital infusions, typically entail many risks and could result in
diÇculties in assimilating and integrating the operations, personnel, technologies, products and information
systems of acquired companies. We may experience delays in the timing and successful integration of acquired
technologies and product development through volume production, unanticipated costs and expenditures,
changing relationships with customers, suppliers and strategic partners, or contractual, intellectual property or
employment issues. In addition, key personnel of an acquired company may decide not to work for us. The
acquisition of another company or its products and technologies may also result in our entering into a
geographic or business market in which we have little or no prior experience. These challenges could disrupt
our ongoing business, distract our management and employees, harm our reputation and increase our
expenses. These challenges are magniÑed as the size of the acquisition increases.
Furthermore, acquisitions may require large one-time charges and can result in increased debt or
contingent liabilities, adverse tax consequences, substantial depreciation or deferred compensation charges,
the amortization of identiÑable purchased intangible assets or impairment of goodwill, any of which could
negatively impact our results of operations. Any of these events could cause the price of our common stock to
decline.
We may not be able to Ñnd suitable acquisition opportunities that are available at attractive valuations, if
at all. Even if we do Ñnd suitable acquisition opportunities, we may not be able to consummate the acquisitions
on commercially acceptable terms or realize the anticipated beneÑts of any acquisitions we do undertake.
40