CY » Topics » Purchase Commitment

This excerpt taken from the CY 10-K filed Mar 17, 2006.

Purchase Commitment

The Company purchases services, software, manufacturing equipment and other supplies from a variety of vendors. During the normal course of business, in order to manage manufacturing lead times and help assure adequate supply, the Company enters into agreements with contract manufacturing and suppliers that either allow them to procure goods and services based upon criteria, as defined by the Company, or that establish parameters defining the Company’s requirements. In certain instances, these agreements allow the Company the option to cancel, reschedule or adjust the Company’s requirements based on its business needs prior to firm orders being placed. Consequently, only a portion of the Company’s recorded purchase commitments arising from these agreements are firm, non-cancelable and unconditional commitments. As of January 1, 2006 and January 2, 2005, the Company estimated its obligations under such agreements to be approximately $91.0 million and $44.2 million, respectively.

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