Symantec 1999 Annual Report Download - page 43

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under arrangements through which our products are included with these resellers’ and vendors’ hardware products
prior to sale by them through retail channels. These licensing agreements are generally non-exclusive and do not
require these resellers or vendors to make minimum purchases. If we are unsuccessful in maintaining our current
relationships and securing license agreements with additional value-added resellers and independent software vendors,
or if these resellers and vendors are unsuccessful in selling their products, our future net revenues and operating results
may be adversely affected.
We may experience difficulty integrating acquisitions . We have completed a number of acquisitions including four
acquisitions in fiscal 1999 and may acquire other companies and technology in the future. Acquisitions involve a
number of special risks, including:
• difficulties of integrating the operations of the acquired companies in an efficient and timely manner;
• diversion of management’s attention from day-to-day operations;
• potential disruption of our existing businesses;
• difficulties in successfully incorporating acquired technologies with our existing products;
• difficulties of integration, training, retention and motivation of key employees of the acquired company;
• the burden of presenting a unified corporate image; and
• obstacles to the integration of acquired products, research and development and sales efforts.
In addition, because the employees of acquired companies have frequently remained in their existing geographically
diverse locations, we have not achieved certain economies of scale that we might otherwise have realized. Further
economies of scale may not be realized in the future.
We may need to secure financing to pay for future acquisitions. Acquisition financing may not be available on
favorable terms or at all. We typically incur significant expenses in connection with our acquisitions. Future
acquisitions may have a significant adverse impact on our future profitability and financial resources.
We face risks associated with our foreign operations . We transact a significant portion of our revenues,
manufacturing costs and operating expenses outside of the United States, often in foreign currencies. As a result, our
operating results may be materially and adversely affected by:
• fluctuations in currency exchange rates;
• increases in duty rates;
• exchange or price controls or other repatriation restrictions on foreign currencies;
• political and economic instability;
• government regulations;
• import restrictions;
• economic volatility; and
• reduced protection for the Company’s copyrights and trademarks in certain jurisdictions.
We utilize natural hedging to mitigate our foreign currency transaction exposure. We also hedge certain residual
balance sheet positions through the use of one-month forward contracts. These strategies may be ineffective in the
future. We may be unsuccessful in accurately forecasting transaction gains or losses. We expect an increase of our
activities that are not denominated in U.S. dollars in the future. If there are continued fluctuations in the currency
markets, our revenues could be materially and adversely affected.
Increased utilization and costs of our technical support services may adversely affect our financial results.
Technical support costs comprise a significant portion of our operating costs and expenses as with many companies in
the software industry. We base our technical support levels, in a large part, on projections of future sales levels. Over
the short term, we may be unable to respond to fluctuations in customer demand for support services. We also may be
unable to modify the format of our support services to compete with changes in support services provided by
competitors. While we perform extensive quality control review over the technical support services provided by our
corporate personnel and, to a lesser extent, over the support services outsourced to third-party vendors, customers may
be dissatisfied with these services. If we have not satisfied our customers’ technical support needs, future product and
upgrade sales to these customers may be reduced.
The results of our research and development efforts are uncertain. We believe that we will need to make
significant research and development expenditures to remain competitive. While we perform extensive usability and
beta testing of new products, the products we are currently developing or may develop in the future may not be