SIAL » Topics » adversely affect our financial results.

These excerpts taken from the SIAL 10-K filed Feb 26, 2008.

adversely affect our financial results.

We operate internationally primarily through wholly-owned subsidiaries located in North and South America, Europe, the Far East, the Middle East, Australia and Africa. Sales outside the United States were in excess of 60% of total sales in 2007. We expect that sales from international operations will continue to represent a growing portion of our sales. During 2007, approximately 9% of the Company’s United States operations’ chemical and equipment purchases were from international suppliers. In addition, many of our manufacturing facilities, employees and suppliers to our international operations 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:

 

   

future fluctuations in exchange rates,

 

   

complex regulatory requirements and changes in those requirements,

 

   

trade protection measures, tariff, royalies or taxes, and import or export licensing requirements or restrictions,

 

   

multiple jurisdictions and differing tax laws, as well as changes in those laws,

 

   

restrictions on our ability to repatriate investments and earnings from foreign operations,

 

   

changes in the political or economic conditions in a country or region, particularly in developing or emerging markets,

 

   

difficulty in staffing and managing worldwide operations,

 

   

changes in shipping costs, and

 

   

difficulties in collecting on accounts receivable.

If any of these risks materialize, we could face the loss of sales, and/or substantial increases in costs, which could adversely affect our results of operations.

adversely affect our financial results.

FACE="Times New Roman" SIZE="2">We operate internationally primarily through wholly-owned subsidiaries located in North and South America, Europe, the Far East, the Middle East, Australia and Africa. Sales outside the United States were in excess of
60% of total sales in 2007. We expect that sales from international operations will continue to represent a growing portion of our sales. During 2007, approximately 9% of the Company’s United States operations’ chemical and equipment
purchases were from international suppliers. In addition, many of our manufacturing facilities, employees and suppliers to our international operations 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:

 







  

future fluctuations in exchange rates,

 







  

complex regulatory requirements and changes in those requirements,

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 







  

trade protection measures, tariff, royalies or taxes, and import or export licensing requirements or restrictions,

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 







  

multiple jurisdictions and differing tax laws, as well as changes in those laws,

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 







  

restrictions on our ability to repatriate investments and earnings from foreign operations,

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 







  

changes in the political or economic conditions in a country or region, particularly in developing or emerging markets,

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 







  

difficulty in staffing and managing worldwide operations,

 







  

changes in shipping costs, and

 







  

difficulties in collecting on accounts receivable.

FACE="Times New Roman" SIZE="2">If any of these risks materialize, we could face the loss of sales, and/or substantial increases in costs, which could adversely affect our results of operations.

STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%">We have manufacturing and research facilities in Israel for which there are not immediate alternatives.

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">Capabilities of our manufacturing and research activities in Israel are not generally replicated in other geographic regions. We would incur substantial
cost and disruption to our sales and operations if certain activities were interrupted in this country for an extended period of time. Israel sourced sales approximate 6% of our total sales in 2007.

STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%">Risks Related to Intellectual Property

SIZE="2">We may become involved in disputes regarding our patents and other intellectual property rights, which could result in

SIZE="2">prohibition of the use of certain technology in current or planned products, exposure of the business to significant liability

FACE="Times New Roman" SIZE="2">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. Further, while we make every effort to respect others’ intellectual property, we may
not have identified each and every instance where our products may infringe or utilize intellectual property rights held by others. Thus, we cannot provide assurance that others will not claim that we are infringing their intellectual property
rights or that we do not in fact infringe those rights.

We have been and may in the future be sued by third parties alleging that we are
infringing upon their intellectual property rights. Any claims, with or without merit, could:

 







  

be expensive,

 







  

take significant time and divert management’s focus from other business concerns,

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– 14 –














  

if successful, require us to stop the infringing activity, redesign our product or process or license the intellectual property in question, thereby resulting in
delays and loss or deferral of sales,

 







  

require us to pay substantial damage awards, and/or

 







  

require us to enter into royalty or licensing agreements which may not be available on acceptable terms, if at all.

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">If we are unable to obtain a royalty agreement or license on acceptable terms, or are unable to redesign to avoid conflicts with any third party patent,
we may be unable to offer some of our products, which could result in reduced sales.

EXCERPTS ON THIS PAGE:

10-K (2 sections)
Feb 26, 2008
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