Richardson Electronics (RELL)

Risks

• We may not achieve our plan for sales growth and margin targets.
• We have historically incurred significant charges for inventory obsolescence and may incur similar charges in the future.
• We face competitive pressures that could have a material adverse effect on our business.
• We are dependent on a limited number of vendors to supply us with essential products.
• We rely heavily on information technology systems that, if not properly functioning, could materially adversely affect our business.
• Our products may be found to be defective or our services performed may result in equipment or product damage and, as a result, warranty and/or product liability claims may be asserted against us.
• Substantial defaults by our customers on our accounts receivable or the loss of significant customers could have a significant negative impact on our business.
• Failure to successfully implement our growth initiatives, or failure to realize the benefits expected from these initiatives if implemented, may create ongoing operating losses or otherwise adversely affect our business, operating results and financial condition.
• We may not be successful in identifying, consummating and integrating future acquisitions.
• Economic weakness and uncertainty could adversely affect our revenues and gross margins.
• Our business and results of operations are subject to a broad range of uncertainties arising out of world and domestic events.
• Major disruptions to our logistics capability or to the operations of our key vendors or customers could have a material adverse impact on our operations.
• A significant portion of our cash, cash equivalents and investments is held by our foreign subsidiaries and could affect future liquidity needs.
• The withdrawal by the United Kingdom from the European Union could have a material adverse effect on our business, financial position, liquidity and results of operations.
• We may be subject to intellectual property rights claims, which are costly to defend, could require payment of damages or licensing fees, and/or could limit our ability to use certain technologies in the future.
• A single stockholder has voting control over us.
• If we fail to maintain an effective system of internal controls or discover material weaknesses in our internal controls over financial reporting, we may not be able to detect fraud or report our financial results accurately or timely.
• If we are deemed to be an investment company, we will be required to meet burdensome compliance requirements and restrictions on our activities.
• Our stock price may be volatile.