| MILLIPORE CORP /MA Item 1A Risk Factors |
| Lack of early success with our pharmaceutical and biotechnology customers can shut us out of future business with those customers |
| Many of the products we sell to the pharmaceutical and biotechnology customers are incorporated into the customers’ drug manufacturing processes |
| In some cases, once a customer chooses a particular product for use in a drug manufacturing process, it is unlikely that the customer will later switch to a competing alternative |
| In many cases the regulatory license for the product will specify the separation products qualified for use in the process |
| Obtaining the regulatory approvals needed for a change in the manufacturing process is time consuming, expensive and uncertain |
| Accordingly, if we fail to convince a pharmaceutical or biotechnology customer to choose our products early in its manufacturing design phase, we may lose permanently the opportunity to participate in the customer’s production of such product |
| Because we face vigorous competition in this market from companies with substantial financial and technical resources, we run the risk that our competitors will win significant early business with a customer making it difficult for us to recover that opportunity |
| The suspension or termination of production of a customer’s therapeutic product may result in the abrupt suspension or termination of their purchases of our products, resulting in an unexpected reduction in our revenue |
| Success in our Bioprocess business substantially depends on the incorporation of our products into a customer’s manufacturing process |
| If this “design in” is achieved, we will likely have the opportunity to sell consumable products to the customer during the life cycle of the customer’s product, which could continue for many years |
| Our planning and growth projections are built in part on the volume assumptions deriving from these customer successes |
| If a customer stops production of its product, either temporarily or permanently, our sales to the customer for the applicable product will drop or stop |
| A customer may suspend or terminate production of a product, either voluntarily or involuntarily, and related sales and distribution for many reasons |
| These may include adverse regulatory, competitive, legal or economic circumstances |
| We have had in the past, and expect to have in the future, situations in which a customer suspends its purchases of our products |
| A suspension or permanent cessation of a process in which we would otherwise anticipate selling a significant volume of consumables will reduce our revenues and negatively impact our earnings |
| Disruptions in the supply of raw materials from our single source suppliers could result in a significant disruption in sales and profitability |
| Our products are made from a wide variety of raw materials that are generally available from alternate sources of supply |
| However, certain critical raw materials and supplies required for the production of some of our principal products are available only from a single supplier |
| Such raw materials cannot be obtained from other sources without significant delay or at all |
| If such suppliers were to limit or terminate production or otherwise fail to supply these materials for any reason, such failures could have a material adverse impact on our product sales and our business |
| If we fail to maintain adequate quality standards for our products and services, our business may be adversely affected and our reputation harmed |
| Our pharmaceutical and biotechnology customers are subject to rigorous quality standards in order to obtain and to maintain regulatory approval of their products and the manufacturing processes that generate them |
| A failure to sustain the specified quality requirements, including the integrity of the separations function performed by our products, could result in the loss of the applicable regulatory license |
| In addition, any delays or quality lapses in our customer’s production line could result in substantial economic losses to us |
| For example, large production lots of biotherapeutics are very delicate and expensive and a failure of a separation membrane could result in the contamination of the entire lot, requiring its destruction |
| We also perform services that may be considered an extension of our customers’ manufacturing and quality assurance processes, which also require the maintenance of prescribed levels of quality |
| Although we believe that our continued focus on quality throughout the company adequately addresses these risks, there can be no assurance that we will not experience occasional 14 ______________________________________________________________________ [36]Table of Contents or systemic quality lapses in our manufacturing and service operations |
| If we experience significant or prolonged quality problems, our business and reputation may be harmed, which may result in the loss of customers, our inability to participate in future customer product opportunities, and reduced revenues and earnings |
| We may be unable to establish and to maintain collaborative development and marketing relationships with business partners, which could result in a decline in revenues or slower than anticipated growth rates |
| As a part of our business strategy, we have formed, and intend to continue to form, strategic alliances and marketing and distribution arrangements with corporate partners relating to the development, commercialization, marketing and distribution of certain of our existing and potential products to increase our revenues and to leverage our product and service offerings |
| Our success will depend, in part, on our ability to maintain these relationships and to cultivate additional corporate alliances with such companies |
| In 2005, we entered into a joint development agreement with Gen-Probe Incorporated |
| We cannot ensure that our historical collaborative relationships will be commercially successful, that we will be able to negotiate additional collaborative relationships, that such additional collaborative relationships will be available to us on acceptable terms, or that any such relationships, if established, will be commercially successful |
| In addition, we cannot ensure that parties with which we have established, or will establish, collaborative relationships will not, either directly or in collaboration with others, pursue alternative technologies or develop alternative products in addition to, or instead of, our products |
| Such parties may also be acquired by our competitors to terminate our relationship |
| They may also experience financial or other difficulties that lessen their value to us and to our customers |
| Our results of operations and opportunities for growth may be adversely affected by our failure to establish and maintain successful collaborative relationships |
| Demand for our bioprocess products and services are subject to the commercial success of our customers’ products which may vary for reasons outside our control |
| Even if we are successful in securing participation for our products in a customer’s manufacturing process, sales of many of our bioprocess products and services remain dependent on the timing and volume of the customer’s production, over which we have no control |
| The customer’s demand for our products will depend on the regulatory approval and commercial success of the supported product |
| The regulatory process is complex, lengthy and expensive and can often take years to complete, if at all |
| Commercial success of a customer’s product, which would drive demand in production and commensurate demand for our products and services, is dependent on many factors, some of which can change rapidly, despite early positive indications |
| Any delay or cancellation by a customer of volume manufacturing may harm our revenues and earnings |
| Technology innovations in the markets that we serve may create alternatives to our products and result in reduced sales |
| Our customers constantly attempt to reduce their manufacturing costs and to improve product quality |
| Technology innovations to which our current and potential customers would have access could reduce or eliminate their need for our membrane or chromatography products |
| For example, if a new membrane or chromatography technology of one of our competitors is accepted by the pharmaceutical or biotechnology industry as a market standard, sales of our membrane or chromatography products would be negatively impacted |
| In addition, a disruptive technology that reduces or eliminates the use of membranes or chromatography would negatively impact the sale of our products |
| We may be unable to respond on a timely basis to the changing needs of our customer base and the new technologies we design for our customers may prove to be ineffective |
| Our failure to develop and to introduce or to enhance products able to compete with such new technologies in a timely manner could have a material adverse effect on our business, results of operations, and financial condition |
| We may be unable to respond on a timely basis to the changing needs of our customer base and the new technologies we design for our customers may prove to be ineffective |
| 15 ______________________________________________________________________ [37]Table of Contents We may be unable to realize our growth strategy if we cannot identify suitable acquisition opportunities in the future |
| As part of our business strategy, we expect to continue to grow our business through acquisitions of technologies or companies |
| We may not identify or complete complementary acquisitions in a timely manner, on a cost-effective basis, or at all |
| In addition, we compete with other companies, including large, well funded competitors, to acquire suitable targets, and may not be able to acquire certain targets that we seek |
| There can be no assurance that we will be able to execute this component of our growth strategy which may harm our business and hinder our future growth |
| To achieve desired growth rates as we become larger, we may seek larger or public companies as potential acquisition candidates |
| The acquisition of a public company may involve additional risks, including the potential for lack of recourse against public shareholders for undisclosed material liabilities of the acquired business |
| In addition, if we were to proceed with one or more significant future acquisitions in which the consideration consisted of cash, a substantial portion of our available cash resources could be used |
| Our continued growth is dependent on our development and successful commercialization of new products |
| Our future success will depend in part on timely development and introduction of new products that address changing market requirements |
| We believe that successful new product introductions provide a significant competitive advantage because customers make an investment of time in selecting and learning to use a new product |
| Customers are reluctant to switch to a competing product after making their initial selection |
| To the extent that we fail to introduce new and innovative products, we may lose market share to our competitors, which will be difficult or impossible to regain |
| An inability, for technological or other reasons, to successfully develop and introduce new products could reduce our growth rate or otherwise damage our business |
| In the past, we have experienced, and are likely to experience in the future, delays in the development and introduction of products |
| We cannot assure that we will keep pace with the rapid rate of change in life sciences research, or that our new products will adequately meet the requirements of the marketplace or achieve market acceptance |
| If we fail to attract, hire, develop and retain qualified personnel, we may not be able to design, manufacture, market or sell our products or successfully grow our business |
| Competition for individuals with skills including sales, marketing, research, product development, engineering and others is strong and we may not be able to secure the personnel we need |
| The loss of the services of any key personnel, or our inability to hire new personnel with the requisite skills, could restrict our ability to develop new products and services or enhance existing products and services in a timely manner, sell products to our customers or manage our business effectively |
| As part of our global supply chain initiative to improve customer service and to amplify our product expertise, we have begun to concentrate our facilities in fewer geographical areas in which there is high demand for qualified staff |
| If we do not achieve the anticipated cost benefits of our global supply chain initiative, our future profitability may be adversely impacted |
| In 2004, we began a coordinated program to reorganize and to consolidate our worldwide supply chain function, including our manufacturing facilities |
| One of the purposes of this initiative was to reduce our overall manufacturing costs and improve our gross margin performance over time |
| A reorganization with this level of complexity and worldwide scope is subject to various execution risks |
| If we encounter unexpected delays or costs, our gross margin may not improve as we had anticipated |
| For example, delays in the required preparation and improvements of one of our primary facilities may defer the transfer of production from our facilities targeted for closing, resulting in continued carrying costs for such facilities |
| These preparations are subject to many factors, including the availability of construction materials and sophisticated production equipment, qualified construction labor and qualified additional production personnel |
| Even after completion of the program, we may not be able to obtain and maintain the anticipated efficiencies in our manufacturing and supply chain, which would limit our ability to improve or maintain our gross margins |
| 16 ______________________________________________________________________ [38]Table of Contents If our consolidated manufacturing operations were disrupted, we may be unable to supply products to our customers and achieve expected revenues |
| We are in the process of executing a coordinated reorganization of our supply chain and manufacturing operations |
| In an effort to better serve our customers and to attain efficiencies of scale and expertise, we are consolidating the majority of our production facilities into three centers of excellence in Jaffrey, New Hampshire, Molsheim, France and Cork, Ireland |
| Each of these facilities serves as our primary production facility for specific product lines |
| This concentration of production, however, exposes us to a greater risk of disruption to our ability to manufacture and supply our products |
| If operation at any of these facilities were disrupted, we may not be able to deliver products to our customers and achieve expected revenues or earnings |
| If we were unable to reestablish production in a timely manner, we may lose customers and have difficulty regaining them |
| It is uncertain whether the safety measures and contingency plans that we have implemented or may implement will successfully address the risks that may arise if production is disrupted |
| Also, there can be no assurance that the insurance that we maintain to protect against business interruption loss will be adequate or that such insurance will continue to remain available on acceptable terms, if at all |
| The extent of the coverage of our insurance could limit our ability to mitigate for lost sales and could result in such losses materially and adversely affecting our operating results |
| Sales of several of our products are dependent on a small number of customers, the loss of which may harm our business and result in a reduction in revenues and earnings |
| No single customer represents more than 10prca of our annual sales |
| However, sales of some of our products are dependent on a limited number of customers, who account for a significant portion of such sales |
| Some of these products are in areas in which we plan to grow substantially |
| The loss of such key customers for such products, or a significant reduction in sales to those customers, could significantly reduce our revenues in these products and adversely affect our future growth in such markets |
| We may become involved in disputes regarding our patents and other intellectual property rights, which could result in prohibition on the use of certain technology in current or planned products, exposure of the business to significant liability and diversion of management’s focus |
| We and our major competitors spend substantial time and resources developing and patenting new and improved products and technologies |
| Many of our products are based on complex, rapidly developing technologies |
| Although we try to identify all relevant third party patents and intellectual property rights, these products could be developed by the business without knowledge of published or unpublished patent applications that cover or use some aspect of these technologies |
| We have been and may in the future be sued by third parties alleging that we are infringing their intellectual property rights |
| These lawsuits are expensive, take significant time and divert management’s focus from other business concerns |
| If we are found to be infringing the intellectual property of others, we could be required to stop the infringing activity, or we may be required to design around or license the intellectual property in question |
| If we are unable to obtain a required license on acceptable terms, or are unable to design around any third party patent, we may be unable to sell some of our products and services, which could result in reduced revenue |
| In addition, if we do not prevail, a court may find damages or award other remedies in favor of the opposing party in any of these suits, which may adversely affect our earnings |
| Our operations must comply with environmental statutes and regulations, and any failure to comply could result in extensive costs which would harm our business |
| The manufacture of some of our products involves the use, transportation, storage and disposal of hazardous or toxic materials and is subject to various environmental protection and occupational health and safety laws and regulations in the countries in which we operate |
| This has exposed us in the past, and could expose us in the future, to risks of accidental contamination and events of non-compliance with environmental laws |
| Any such occurrences could result in regulatory enforcement or personal injury and property damage claims or could lead to a shutdown of some of our operations, which could have an adverse effect on our business and results of operations |
| We currently incur costs to comply with environmental laws and regulations and these costs may become more significant |
| 17 ______________________________________________________________________ [39]Table of Contents The environmental laws of many jurisdictions impose actual and potential obligations on us to remediate contaminated sites |
| These obligations may relate to sites: • that we currently own or operate; • that we formerly owned or operated; or • where waste from our operations was disposed |
| These environmental remediation obligations could reduce our operating results |
| In particular, our accruals for these obligations may be insufficient if the assumptions underlying the accruals prove incorrect or if we are held responsible for additional, currently undiscovered contamination |
| A substantial fine or penalty, the payment of significant environmental remediation costs or the loss of a permit or other authorization to operate or engage in our ordinary course of business could result in material, unanticipated expenses and the possible inability to satisfy customer demand |
| If our efforts to integrate acquired or licensed businesses or technologies into our business are not successful, our business could be harmed |
| As part of our business strategy, we expect to continue to grow our business through acquisitions of technologies or of companies that offer products, services and technologies that we believe would complement our technologies and services |
| In 2005, we acquired NovAseptic AB and MicroSafe BV Managing these acquisitions and any future acquisitions will entail numerous operational, legal and financial risks, including: • difficulties in assimilating new technologies, operations, sites and personnel; • diversion of resources and management attention from our existing businesses and technologies; • inability to maintain uniform quality standards, controls, and procedures; • inability to retain key employees of any acquired businesses or hire enough qualified personnel to staff any new or expanded operations; • impairment or loss of relationships with key customers of acquired businesses; • issuance of dilutive equity securities; • incurrence or assumption of debt; • exposure to unknown or unanticipated liabilities; • additional expenses associated with future amortization or impairment of acquired intangible assets or potential businesses; and • exposure to federal, state, local and foreign tax liabilities in connection with any acquisition or the integration of any acquired businesses |
| Our failure to address these risks successfully in the future could harm our business and prevent our achievement of anticipated growth |
| Our sales may be negatively affected by the implementation of second source programs by our customers |
| For many customers, we are the single source supplier for one or more critical components used in their production lines |
| We are aware of customers that have begun to implement second sourcing programs to reduce the potential risk of disruptions to their production due to a supply bottleneck |
| These can include diversifying purchases of one component among vendors or spreading the sources of components of a process, such as purification, among different suppliers |
| If, as a result of these second sourcing programs, existing customers were to choose another company to supply components that we currently supply, or if we lose future business opportunities for which we would otherwise be qualified, our future revenues may be harmed |
| 18 ______________________________________________________________________ [40]Table of Contents Our use of third party manufacturers exposes us to increased risks that may affect our ability to supply our customers |
| As part of our efforts to consolidate our manufacturing operations, we have increased the outsourcing of certain manufacturing operations |
| For example, in 2006, we will be migrating most of our standard bioprocess systems production to a company in India in which we have a minority equity interest |
| In addition, we often source products resulting from collaborative development relationships from such development partners |
| If any of our third party manufacturers experiences delays, disruptions, capacity constraints or quality control problems in its manufacturing operations or becomes insolvent, then product shipments to our customers could be delayed, which would decrease our revenues and harm our competitive position and reputation |
| Because we compete directly with one of our key suppliers and one of our significant distributors, our results of operations could be adversely affected if either of these parties discontinues or materially changes the terms of the agreement |
| We source a key raw material from a significant competitor in the market into which we sell the resulting products |
| Although we purchase these materials under a supply agreement which provides for some supply protections, our business could be adversely affected if this supplier discontinues selling the raw materials to us |
| In addition, one of our competitors also serves as a significant distributor |
| If this distributor discontinued selling our products or materially changed the terms, our sales and earnings could be adversely affected in the short term |
| If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected |
| We rely on one centralized information system throughout our company to process orders, manage inventory and process shipments to customers |
| If we were to experience a prolonged system disruption in the information technology systems that involve our interactions with customers and suppliers, it could result in the loss of sales and customers, which could adversely affect our business |
| We are subject to economic, political and other risks associated with our significant international sales and operations, which could adversely affect our business |
| We conduct operations throughout the world through a variety of subsidiaries and distributors |
| Sales outside the United States were approximately 65prca of total sales in both 2005 and 2004 |
| A significant portion of our revenues, approximately 40prca in 2005, is generated in Europe |
| We anticipate that revenue from international operations will continue to represent a significant portion of our revenues |
| In addition, two of our primary manufacturing facilities, Molsheim, France and Cork, Ireland, and many of our employees and suppliers, are located outside the United States |
| Our sales and earnings could be adversely affected by a variety of factors resulting from our international operations, including: • changes in the political or economic conditions in a country or region, particularly in developing or emerging markets; • trade protection measures and import or export licensing requirements; • differing tax laws and changes in those laws; • difficulty in staffing and managing widespread operations; and • differing regulatory requirements and changes in those requirements |
| Foreign exchange fluctuations may adversely affect our reported earnings, the value of our assets and the costs of our debt repayment |
| We prepare our consolidated financial statements in US dollars, but a significant portion of our earnings and expenditures are in other currencies |
| In 2005, we derived about 65prca of our revenues from customers outside 19 ______________________________________________________________________ [41]Table of Contents the United States |
| Our sales made in countries other than the United States are typically made in the local currencies of those countries |
| As a result, fluctuations in exchange rates have caused and will continue to cause foreign currency transaction gains and losses |
| Fluctuations in exchange rates between the US dollar and other currencies may also affect the book value of our assets outside the United States |
| In addition, in 2005, we borrowed €382 million under our new revolving credit facility denominated in Euros |
| We intend to repay in Euros from our European profits denominated in Euros |
| There can be no assurance that such cash flow from our European operations will be sufficient to repay such debt, in which case we may need to repay from profits denominated in US dollars |
| In such an event, a significant appreciation of the Euro with respect to the US dollar could expose us to additional foreign currency exposure |
| Due to the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates, we cannot predict the effects of exchange rate fluctuations on future operating results |
| We seek to minimize our currency exposure by coordinating our worldwide supply sourcing, actively managing cross-border currency flows, and engaging in foreign exchange hedging transactions |
| Despite these steps, there can be no assurance that our foreign currency management strategy will adequately protect our operating results from the effects of future exchange rate fluctuations |
| Reduction in our customers’ research and development budgets and government funding may result in reduced sales |
| Our customers include researchers at pharmaceutical and biotechnology companies, academic institutions and government and private laboratories throughout the world |
| Their research and development budgets and activities have a large effect on the demand for our products and services |
| Fluctuations in our customers’ research and development budgets occur due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities and institutional budgetary policies |
| Our bioscience business could be adversely impacted by any significant decrease in life sciences research and development expenditures by pharmaceutical and biotechnology companies, academic institutions or government and private laboratories |
| In addition, short term changes in administrative, regulatory or purchasing-related procedures can create uncertainties or other impediments which can contribute to lower sales |
| A portion of our bioscience sales have been to researchers, universities, government laboratories and private foundations whose funding may be dependent in part upon grants from government agencies such as the US National Institutes of Health (NIH) and similar domestic and international agencies |
| The annual NIH budget for 2006 was cut from its 2005 budget, the first such reduction in 35 years |
| We cannot assure you that this trend will change |
| Government funding of research and development is subject to the political process, which is inherently fluid and unpredictable |
| Our revenues may be adversely affected if our customers delay purchases as a result of uncertainties surrounding the approval of government or industrial budget proposals |
| If researchers were not able to obtain, for any extended period, government funding necessary to purchase our products or if there is a decrease in overall research funding, it could reduce our bioscience sales and damage our business |
| Our revenues may fluctuate, and this fluctuation could cause financial results to be below expectations |
| Fluctuations in our operating results from period to period may occur for a number of reasons |
| In planning our operating expenses for the foreseeable future, we assume that revenues will continue to grow |
| Generally operating expenses cannot be adjusted quickly in the short term because we have significant fixed costs |
| If our revenues decline or do not grow as anticipated, we may not be able to reduce our operating expenses accordingly |
| Failure to achieve anticipated levels of revenue could therefore significantly harm our operating results for a particular period |
| A revenue shortfall could arise from any number of factors, some of which we cannot control |
| For example, factors that may cause our results to vary by period include: • the volume and timing of orders from customers for our products and services; • the level and timing of our customers’ research and commercialization efforts; • changes in the mix of our products and services; 20 ______________________________________________________________________ [42]Table of Contents • the number, timing and significance of new products and services introduced by our customers; • our ability to develop, market and introduce new and enhanced products and services on a timely basis; • changes in the cost, quality and availability of materials and components required to manufacture or use our products; • the timing and costs of any acquisitions of businesses or technologies; • the introduction of new products by us or our competitors, • exchange rate fluctuations; and • general economic conditions |
| Increased exposure to product liability claims could adversely affect our earnings |
| Product liability is a major risk in testing and marketing biotechnology and pharmaceutical products offered by our customers |
| Currently these risks are primarily borne by our customers |
| As our products and services are further integrated into our customers’ production processes, we may become increasingly exposed to product liability and other claims in the event that the use of our products or services is alleged to have resulted in adverse effects |
| There can be no assurance that a future product liability claim or series of claims brought against us would not have an adverse effect on our business or the results of operations |
| Our business may be materially and adversely affected by a successful product liability claim or claims in excess of any insurance coverage that we may have |
| In addition, product liability claims, regardless of their merits, could be costly and divert management’s attention, and adversely affect our reputation and the demand for our products |
| We heavily rely on air cargo carriers and other third party package delivery services, and a significant disruption in these services or significant increases in prices may disrupt our ability to ship products or import materials, increase our costs and lower our profitability |
| We ship a significant portion of our products to our customers through independent package delivery companies |
| In addition, we transport materials among our company facilities, including our facilities in France and Ireland, and import raw materials from worldwide sources |
| Consequently, we heavily rely on air cargo carriers and third party package delivery providers |
| If any of our key third party package delivery providers experiences a significant disruption such that any of our products, components or raw materials would not be delivered in a timely fashion or we would incur additional shipping costs that we could not pass on to our customers, our costs may increase and our relationships with certain of our customers may be adversely affected |
| In addition, if our third party package delivery providers increase prices, and we are not able to find comparable alternatives or make adjustments to our delivery network, our profitability could be adversely affected |
| The stated value of long-lived and intangible assets may become impaired and result in an impairment charge |
| As of December 31, 2005, we had approximately dlra380 million of long-lived assets |
| We continue to invest in the construction and upgrading of our manufacturing and research facilities which may have the effect of increasing the recorded value of our long-lived assets |
| If we are successful in acquiring additional complementary businesses and technologies, a substantial portion of the value of these may be recorded as goodwill, an intangible asset |
| The carrying amounts of long-lived and intangible assets are affected whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable |
| Such events or changes might include a significant decline in market share, a significant decline in profits, rapid changes in technology, failure to achieve the benefits of capacity increases and utilization, significant litigation arising out of an acquisition or other matters |
| Adverse events or changes in circumstances may affect the estimated undiscounted future operating cash flows expected to be derived from long-lived and intangible assets |
| If at any time we determine that an impairment has occurred, we will be required to reflect the impaired value as a charge, resulting in a reduction in earnings in the quarter such impairment is identified and a corresponding reduction in our net asset value |
| The potential recognition of impairment in the carrying value, if any, could have a material and adverse affect on our results of operations |
| 21 ______________________________________________________________________ [43]Table of Contents Our level of debt could limit cash flow available for our operations and could adversely affect our ability to service our debt or obtain additional financing, if necessary |
| As of December 31, 2005, our total debt was dlra552 million |
| We recently established a revolving credit facility against which we can borrow in either the United States or Europe, up to a maximum corporate availability of €430 million |
| As of December 31, 2005, we had drawn dlra452 million (€382 million) on this credit facility |
| At such time as all or a substantial portion of the proceeds from this credit facility were to be expended and our cash position reduced commensurately, our level of debt could restrict our operations and make it more difficult for us to satisfy our obligations, including under the notes |
| Among other things, our level of debt may expose us to the risk of increased interest rates because a substantial portion of our debt has variable interest rates |
| We may require substantial additional capital to pursue strategic acquisitions or alliances, which capital we may not be able to obtain on commercially reasonable terms, if at all |
| We anticipate that our currently planned capital requirements will be satisfied by the future operating cash flow, current cash balances or other existing financing sources |
| To the extent that we desire to pursue a strategic acquisition or alliance requiring substantial cash expenditures for which our existing resources and credit facilities are insufficient, we may need to raise funds through public or private debt or equity financings |
| There is no assurance that such additional funds will be available or, if available, that we can obtain such funds on terms acceptable to us |
| If adequate funds are not available, we may have to forgo desired acquisitions or alliances, or reduce expenditures for research and development, production or marketing, which could have an adverse effect on our business |
| To the extent that additional capital is raised through the sale of equity or convertible securities, the issuance of such securities could result in dilution to our shareholders |