Toro 2013 Annual Report Download - page 25

costs or are required to pay fines in connection with stolen cus-
We operate in many different jurisdictions and we could
tomer, employee, or other confidential information; we must dedi-
be adversely affected by violations of the U.S. Foreign
cate significant resources to system repairs or increase cyber
Corrupt Practices Act and similar worldwide
security protection; or we otherwise incur significant litigation or
anti-corruption laws.
other costs.
The U.S. Foreign Corrupt Practices Act and similar worldwide
anti-corruption laws generally prohibit companies and their We are subject to product liability claims, product
intermediaries from making certain improper payments for the pur- quality issues, and other litigation from time to time that
pose of obtaining or retaining business. The continued expansion could adversely affect our operating results or financial
of our international operations could increase the risk of violations condition.
of these laws in the future. Significant violations of these laws, or
The manufacture, sale, and use of our products expose us to sig-
allegations of such violations, could harm our reputation, could dis-
nificant risks associated with product liability claims. If a product
rupt our business, and could result in significant fines and penal-
liability claim or series of claims is brought against us for uninsured
ties that could have a material adverse effect on our results of
liabilities or in excess of our insurance coverage, and it is ulti-
operations or financial condition.
mately determined that we are liable, our business could suffer.
While we believe that we appropriately instruct our customers on
Management information systems are important to the
the proper usage of our products, we cannot ensure that they will
efficient operation of our business. If our management
implement our instructions accurately or completely. If our products
information systems fail to adequately perform, or if we
are defective or used incorrectly by our customers, injury may
experience an interruption in their operation, our
result and this could give rise to product liability claims against us
business and operating results could be adversely
or adversely affect our brand image or reputation. Any losses that
affected.
we may suffer from any liability claims, and the effect that any
We have many management information systems that are impor- product liability litigation may have upon the reputation and market-
tant to the efficient operation of our business, some of which are ability of our products, may have a negative impact on our busi-
managed by third parties. These management information systems ness and operating results. Some of our products or product
are used to record, process, summarize, transmit, and store elec- improvements were developed relatively recently and defects or
tronic information, and to manage or support a variety of business risks that we have not yet identified may give rise to product liabil-
processes and activities, including, among other things, our ity claims. Additionally, we could experience a material design or
accounting and financial functions, including maintaining our inter- manufacturing failure in our products, a quality system failure,
nal controls; our manufacturing and supply chain processes; and other safety issues, or heightened regulatory scrutiny that could
the data related to our research and development efforts. The fail- warrant a recall of some of our products. A recall of some of our
ure of our management information systems to perform properly, products could also result in increased product liability claims.
or difficulties encountered in the development of new systems or Unforeseen product quality problems in the development and pro-
the upgrade of existing systems, could disrupt our business, which duction of new and existing products could also result in loss of
may result in decreased sales, increased overhead costs, excess market share, reduced sales, rework costs, and higher warranty
or obsolete inventory, and product shortages, causing our business expense.
and operating results to suffer. Although we take steps to secure We are also subject to other litigation from time to time that
our management information systems, including our computer sys- could adversely affect our operating results or financial condition.
tems, intranet and internet sites, email and other telecommunica-
tions and data networks, the security measures we have imple- If we are unable to retain our key employees, and attract
mented may not be effective and our systems may be vulnerable and retain other qualified personnel, we may not be able
to theft, loss, damage and interruption from a number of potential to meet strategic objectives and our business could
sources and events, including unauthorized access or security suffer.
breaches, natural or man-made disasters, cyber attacks, computer
Our ability to meet our strategic objectives and otherwise grow our
viruses, power loss, or other disruptive events. Our reputation,
business will depend to a significant extent on the continued contri-
brand, and financial condition could be adversely affected if, as a
butions of our leadership team. Our future success will also
result of a significant cyber event or otherwise, our operations are
depend in large part on our ability to identify, attract, and retain
disrupted or shutdown; our confidential, proprietary information is
other highly qualified managerial, technical, sales and marketing,
stolen or disclosed; data is manipulated or destroyed; we incur
and customer service personnel. Competition for these individuals
is intense, and we may not succeed in identifying, attracting, or
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