1 1 requirements, the dif ficulty of ef fectively managing diverse global operations, terrorist activities, adverse foreign tax laws and the threat posed by potential pandemics in countries that do not have the resources necessary to deal with such outbreaks. Our financial results may be adversely af fected by the enactment of exchange controls or foreign governmental or regulatory restrictions on the transfer of funds. In addition, negative tax consequences relating to the repatriation of certain foreign income may adversely af fect our cash flows. Over time, we intend to continue to expand our foreign operations, which would serve to exacerbate these risks and their potential ef fect on our business, financial position and results of operations. Economic and political developments in the countries in which we have operations, including future economic changes or crises (such as inflation, currency devaluation or recession), government deadlock, political instability , political activism, terrorist activities, civil strife, international conflicts, changes in laws and regulations and expropriation or nationalization of property or other resources, could impact our operations or the market value of our common stock and have an adverse ef fect on our business, financial condition and results of operations. • In each of our markets, we face pricing pressures. Such pricing pressures could adversely af fect our results of operations and financial performance. W e face pricing pressures in each of our markets as a result of significant competition or over -capacity . In order to respond to these pricing pressures, we continually work toward reducing our costs through improving our processes and productivity . In the event we are unable to implement cost reduction measures that are designed to improve our manufacturing techniques and processes, we may not achieve desired ef ficiency or productivity levels or reduce our manufacturing costs. In addition, productivity increases are related in part to factory utilization rates. Decreases in utilization rates may adversely impact productivity . Further pricing pressures, without of fsetting cost reductions, could adversely af fect our results of operations and financial performance. • Growth through acquisition has been a significant part of our strategy and we may not be able to successfully identify , obtain or integrate acquisitions. Growth through acquisition has been, and is expected to continue to be, a significant part of our strategy . W e regularly evaluate possible acquisition candidates. There can be no assurance that we will be successful in identifying, financing and closing acquisitions at favorable prices and terms. Potential acquisitions may require us to issue additional shares of stock or obtain additional or new financing. The issuance of shares of our common or preferred stock in connection with potential acquisitions may dilute the value of shares held by our then existing equity holders. Further , there can be no assurance that we will be successful in integrating any such acquisitions that are completed. Integration of any such acquisitions may require substantial management, financial and other resources and may pose risks with respect to production, customer service and market share of our existing operations. In addition, we may acquire businesses that are subject to technological or competitive risks, and we may not be able to realize the benefits originally expected from such acquisitions. • Alternative technologies, such as fiber optic and wireless technologies, may make some of our products less competitive. Alternative technologies continue to have an adverse ef fect on elements of our business. For example, a continued increase in the rate of installations using fiber optic systems, an increase in the cost of copper -based systems, or advancing wireless technologies, as they relate to network and communications systems, may have an adverse ef fect on our business. While we do manufacture and sell fiber optic cables, any further acceleration in the erosion of our sales of copper cables due to increased market demand for fiber optic cables would most likely not be of fset by an increase in sales of our fiber optic cables. In addition, our sales of copper premise cables currently face downward pressure from wireless and other similar technology and the increased acceptance and use of these technologies has increased this pressure and the potential negative impact on our future financial results, cash flows or financial position. • W e are substantially dependent upon distributors and retailers for non-exclusive sales of our products and they could cease purchasing our products at any time. Distributors and retailers account for a substantial portion of our sales. These distributors and retailers are not contractually obligated to carry our product lines exclusively or for any period of time. Therefore, these distributors and retailers may purchase products that compete with our products or cease purchasing our products at any time. The loss of one or more lar ge distributors or retailers could have a material adverse ef fect on our ability to bring our products to end users and on our results of operations. Moreover , a downturn in the business of one or more lar ge distributors or retailers could adversely af fect our sales and could create significant credit exposure. • Changes in our tax rates or exposure to new tax laws could impact our profitability . W e are subject to income tax in the United States and in various other global jurisdictions. Our ef fective tax rates could be adversely af fected by changes in the mix of earnings by jurisdiction and the valuation of deferred tax assets and liabilities. Our ef fective tax rate could also be adversely af fected by changes in tax laws. For example, certain versions of recent US tax reform proposals could, if enacted, significantly impact the taxation of US based multinationals and could have a material impact on our tax expense and cash flows. In addition, we are subject to audits in various jurisdictions. Although we believe that our tax estimates are reasonable and appropriate, there are significant uncertainties in these estimates and as a result of these estimates there could be material adjustments. As a result of ongoing or possible future tax audits, we may be required to pay additional taxes and/or T able of Contents