|
| [May 19, 2008] |
 |
BDO Seidman LLP Report Identifies Leading Risk Factors At 100 Largest U.S. Public Technology Companies
SAN FRANCISCO --(Business Wire)-- Research released today by BDO Seidman, LLP, a leading professional services firm, identifies strong competition (92%) and changes to federal, state and local regulations, including tax (87%) as the most common risk factors among the 100 largest U.S. public technology companies. More interesting, major technology companies cited risks associated with international operations (85%) more frequently than risks related to U.S. general economic conditions (73%).
As companies look to carefully expand abroad, serve developing markets and strengthen U.S. operations, they are concerned with the challenges of managing current and future M&A transactions (86%), the inability to develop or market new products or services (84%) and intellectual property infringement (84%).
These are just a few of the findings in The 2008 BDO Seidman RiskFactor Report for Technology Businesses. The report examined the risk factors listed in the fiscal year 2007 10-K SEC filings of the largest 100 publicly traded U.S. technology companies; the factors were analyzed and ranked by order of frequency cited.
"We created The 2008 BDO Seidman RiskFactor Report to serve as an annual benchmark of the changing concerns at major public technology companies. This initial study shows that technology companies are much more concerned with the impediments to international growth and operations over the challenges they face at home with the struggling U.S. economy," said Doug Sirotta, a Partner in BDO Seidman's Technology Practice. "While companies are combating regulatory changes and continuingly addressing cost cutting, pricing and margins, they are also alarmed by issues relating to intellectual property infringement, legal proceedings, supplier/vendor quality and product liabilities. Management is communicating to shareholders that attention must be given to these issues before they impact customer confidence and, consequently, sales."
The following is the list of the top 20 Risk Factors of the 100
Largest U.S. Technology Companies:
1. Competition and consolidation in technology sector 92%
2. Changes to Federal, State and Local regulations, including tax 87%
3. Management of current and future M&A or divestitures 86%
4. Risks associated with international operations 85%
5. Inability to develop or market new products/services 84%
6. Intellectual property infringement 84%
7. U.S. general economic conditions 73%
8. Inability to attract or retain personnel, including management 72%
9. Pressures on pricing, margins and cost cutting 71%
10. Legal proceedings 70%
11. Cyclical revenue (and subsequent fluctuating stock price) 69%
12. Product liability, quality and safety issues 68%
13. U.S. and foreign supplier/vendor concerns 68%
14. Inability to acquire capital or financing 66%
15. Predicting customer demand 65%
16. Financial risk of customer 58%
17. Failure to properly execute corporate growth strategy 52%
18. Changes to accounting standards/regulations 47%
19. Internal controls and Sarbanes-Oxley compliance 45%
20. Indebtedness 44%
Further findings in The 2008 BDO Seidman RiskFactor Report for Technology Businesses:
-- Pricing, Costs and Growth Strategies. In an unpredictable U.S. business climate, companies point to the pressures on pricing, margins and cost cutting (71%) and their cyclical revenue (and subsequent fluctuating stock price) (69%) as roadblocks to meeting earnings expectations. As companies look to tackle these issues, many are concerned with the failure to properly execute their existing corporate growth strategies (52%).
-- Legal and Product Liabilities. Ranking high among technology companies' concerns are risks associated with legal proceedings (70%). Furthermore, sixty-eight percent cited risks associated with suppliers/vendors in the U.S. and internationally and over three-fifths (68%) cited product liability, quality and safety issues, as a concern.
-- Predicting Customer Demand. As technology companies diversify their products and services to serve developing markets and sub-industries, they are concerned with predicting customer demands (65%). They are also aware that their sales are subject to their customers' financial risks (58%), which may become unpredictable given the uncertain economy.
-- Retaining Key Employees. The recruitment and retention of skilled personnel in the technology industry is highly competitive, especially in the Silicon Valley area. In fact, seventy-two percent of technology companies noted that the inability to attract or retain key personnel, including management, may impact companies' abilities to meet earnings expectations.
-- Compliance and Governance. Almost half (47%) of the top 100 U.S. public technology companies cited risks associated with accounting standards and regulations as an issue. Within that percentage, several companies specifically cited their compliance with the U.S. Generally Accepted Accounting Standards (GAAP) and the adoption of International Financial Reporting Standards (IFRS) by their foreign competitors as an issue. Forty-five percent of the companies also cited implementation/compliance with internal controls, including Sarbanes-Oxley, as a concern.
-- Debt and Capital Concerns. The tightening credit market and recent liquidity disruptions in the debt market have created distressed situations for technology companies. Forty-four percent of the technology companies in the study have concerns about their indebtedness, which they fear may collaborate with their inability to acquire capital or financing (66%) in the coming year.
BDO Seidman, LLP has been a valued business advisor to a wide range of publicly traded and privately held technology companies ranging from software and hardware companies to media and telecommunications businesses to emerging Internet enterprises. These clients range in size from Silicon Valley start-ups to Fortune 500 technology conglomerates.
About BDO Seidman, LLP
BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values including, competence, honesty and integrity, professionalism, dedication, responsibility and accountability for almost 100 years, we have provided quality service and leadership through the active involvement of our most experienced and committed professionals.
BDO Seidman serves clients through 37 offices and more than 300 independent alliance firm locations nationwide. As a Member Firm of BDO International, BDO Seidman, LLP serves multi-national clients by leveraging a global network of resources comprised of 621 Member Firm offices in 110 countries. BDO International is a worldwide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.
[ Back To TMCnet.com's Homepage ]
|
Find Solutions for Enterprises, SMBs & Service Providers at the INTERNET TELEPHONY Conference and EXPO West, September 16-18, 2008. Los Angeles, California.
