**Exhibit 99**
**Risks Relating to Our Business**
**We have incurred significant net losses, primarily due to the current economic climate in thecommunications industry. Unless we are able to increase our sales or further reduce our costs, wewill continue to incur net losses.**
     The current economic climate in the communications industry has resulted in reduced capitalspending from its peak for networking products. Spending for networking products appears to havestabilized and may see a rebound, although it is not expected to return to peak levels for theforeseeable future. As a result, many of our customers continue to express uncertainty as to theirfuture requirements. While we have experienced a significant increase in net sales, we neverthelessincurred a net loss during the nine months of fiscal 2005. The increase in net sales is largely theresult of the acquisition of Sterling. We do not expect substantial growth in the markets we serve.Any decline in demand for our customers’ products or a deterioration of general economic conditionsin the communications industry would likely result in reduction in demand for our products and ourbusiness, operating results and financial condition would suffer.
     Although we have implemented personnel reductions and other cost reduction programs, many ofour costs are fixed in the near term. Consequently, we will need to generate higher revenues whilecontaining costs and operating expenses if we are to return to profitability. If our efforts toincrease our revenues and contain our costs are not successful, we will continue to incur netlosses.
**Our success depends on the long-term growth of the communications industry and its use of ourtechnologies. If these events do not occur, our net sales may decline and our business would likelybe significantly harmed.**
     Our subsystems and components are used primarily in military, video broadcast, industrial,enterprise, metropolitan area, wide area and telecommunication networks. These markets are rapidlyevolving and it is difficult to predict their potential size or future growth rate. In addition,there is uncertainty as to the extent to which communications technologies will be used throughoutthese markets. Our success in generating revenue in these markets will depend on the long-termgrowth of these markets and their use of communications technologies. If these markets do not grow,or if the use of communications technologies in these markets does not expand, our net sales maydecline and our business would likely be significantly harmed.
     The market for communications equipment is changing rapidly and is dominated by several largemanufacturers. Our future growth will depend, in part, upon (1) our ability to develop andintroduce new products for this market and (2) the growth of the communications equipment marketand (3) our ability to compete successfully in the communications industry. The growth in themarket for communications equipment products and services is dependent on a number of factors,including without limitation:
 •  the amount of capital expenditures by network providers;
1

 

 •  regulatory and legal developments;  •  changes to capital expenditure rates by network providers;  •  the addition of new customers to the market; and  •  end-user demand for integrated Internet, data, video, voice and other networkservices.
     We cannot predict the growth rate of the market for telecommunications equipment products andservices. The economic climate in the communications industry, changes and consolidation in theservice provider market and constraints on capital availability have had a material adverse effecton many of our service provider customers, causing some of these customers to go out of businessand a number of other customers to substantially reduce their expansion plans and purchases.
**We must develop new products and technologies as well as enhancements to existing products andtechnologies in order to remain competitive. If we fail to do so, our products will no longer becompetitive and our net sales will decline.**
     The market for our products and technologies is characterized by rapid technological change,new and improved product introductions, changes in customer requirements and evolving industrystandards. Our future success will depend to a substantial extent on our ability to develop,introduce and support new products and technologies on a successful and timely basis. If we fail todevelop and deploy new products and technologies or enhancements of existing products on asuccessful and timely basis or we experience delays in the development, introduction or enhancementof our products and technologies, our products will no longer be competitive and our net sales willdecline. The introduction of new and enhanced products may cause our customers to defer or cancelorders for existing products. In addition, a slowdown in demand for existing products ahead of anew product introduction could result in a write down in the value of inventories relating toexisting products.
     The development of new, technologically advanced products is a complex and uncertain processrequiring high levels of innovation and highly skilled engineering and development personnel, aswell as the accurate anticipation of technological and market trends. We cannot assure you that wewill be able to identify, develop, manufacture, market or support new or enhanced productssuccessfully, if at all, or on a timely basis. Further, we cannot assure you that our new productswill gain market acceptance or that we will be able to respond effectively to product announcementsby competitors, technological changes or emerging industry standards. Any failure to respond totechnological change would significantly harm our business.
**Our products are incorporated into larger systems, which must comply with various domestic andinternational government regulations. If the performance of our products adversely affects ourcustomers’ ability to comply with these requirements, we may lose these customers and our net saleswill decline.**
     In the United States, our products are incorporated into larger systems, which must complywith various regulations and standards defined by the Federal Communications Commission andUnderwriters Laboratories. Internationally, our products are incorporated into larger systems,which must also comply with standards established by local authorities in various
2

 

countries, which may vary considerably. If the performance of our products contributes to ourcustomers’ inability to comply with existing or evolving standards established by regulatoryauthorities or to obtain timely domestic or foreign regulatory approvals, we may lose thesecustomers and our net sales will decline.
**If our products fail to comply with evolving industry standards or alternative technologies in ourmarkets, we may be required to make significant expenditures to redesign our products.**
     Our products comprise only a part of an entire networking system and must comply with evolvingindustry standards in order to gain market acceptance. In many cases, we introduce a product beforean industry standard has become widely accepted and we depend on the companies that provide othercomponents to support industry standards as they evolve. Because industry standards do not exist insome cases at the time we are developing new products, we may develop products that do not complywith the eventual industry standard. If this occurs, we would need to redesign our products tocomply with adopted industry standards. In addition, if alternative technologies were adopted as anindustry standard within our target markets, we would have to dedicate significant time andresources to redesign our products to meet this new industry standard. If we are required toredesign our products, we may incur significant expenses and losses due to lack of customer demand,unusable purchased components for these products and the diversion of our engineers from futureproduct development efforts. If we are not successful in redesigning our products or developing newproducts to meet new standards or any other standard that may emerge, our net sales will decline.
**We are also dependent on sales to the military/aerospace industry, including U.S. and foreigngovernment entities.**
     Approximately 36.2% of our sales for the nine-month period ended January 31, 2005 came fromdirect and indirect sales to the military/aerospace industry, which is heavily dependent on salesto U.S. and foreign government entities, either directly through contracts with such entities orindirectly through distributors and to prime contractors or subcontractors who are building systemsor subsystems for them. A significant decline in U.S. and foreign government expenditures couldhave a material adverse effect on our sales.
**Our sales cycle runs from our customers’ initial design to production for commercial sale. Thiscycle is long and unpredictable and may cause our net sales to decline or our operating expenses toincrease.**
     We cannot predict the timing of our sales accurately because of the length of our salescycles. As a result, if sales forecasts from specific customers are not realized, we may be unableto compensate for the sales shortfall and our net sales may decline. The period of time between ourinitial contact with a customer and the receipt of a purchase order may span over a year or more,and varies by product and customer. During this time, customers may perform, or require us toperform extensive evaluation and qualification testing of our products. Generally, they consider awide range of issues before committing to purchase our products, including ability to interoperatewith other subsystems and components, product performance and reliability. We may incur substantialsales and marketing expenses and expend significant management effort
3

 

while our potential customers are qualifying our products. Even after incurring these costs,we ultimately may not sell any or may only sell small amounts of our products to these potentialcustomers. Consequently, if new sales do not result from our efforts to qualify our products, ouroperating expenses will increase.
**Our customers may cease purchasing our products at any time and may cancel or defer purchases onshort notice, which may cause our net sales to decline or increase our operating expenses.**
     We generally do not have long-term contracts with our customers. Sales are typically madepursuant to individual purchase orders, often with short lead times, that may be canceled ordeferred by customers on short notice without significant penalty. Our customers base their ordersfor our products on the forecasted sales and manufacturing schedules for their own products. Ourcustomers have in the past significantly accelerated, canceled or delayed orders for our productsin response to unanticipated changes in the manufacturing schedules for their own products, andwill likely do so again in the future. During the last twelve months, our customers have cancelleda number of orders. The reduction, cancellation or delay of individual customer purchase orders hascaused and could continue to cause our net sales to decline. Moreover, these uncertaintiescomplicate our ability to accurately plan our manufacturing schedule and may increase our operatingexpenses.
**If we do not decrease our manufacturing costs or increase sales of higher margin products as theaverage unit price of our existing products decreases, our gross margins will decline.**
     The average unit prices of our products frequently decrease as the products mature in responseto increased competition, the introduction of new products and increased unit volumes. Most of ourproducts are designed and manufactured in our own facilities. Accordingly, a significant portion ofour cost of sales is fixed over the near term. In order to remain competitive, we must continuallyreduce our manufacturing costs through design and engineering changes and increases inmanufacturing efficiencies. We must also continue to develop and introduce on a timely basis newproducts that incorporate features that can be sold at higher average selling prices. Our inabilityto reduce manufacturing costs or introduce new products with higher average selling prices willcause our gross margins to decline, which would significantly harm our operating results.
**The market for our products is highly competitive, which may result in lost sales or lower grossmargins.**
     The market for our products is highly competitive. For optoelectronics, we compete primarilywith Agilent Technologies, Inc., Finisar Corporation, JDS Uniphase Corporation and OpticalCommunications Products, Inc. For fiber optics, we compete primarily with Amphenol Corporation,Molex, Inc. and Tyco International, Ltd. and numerous other smaller companies. For RF products wecompete with ADC Telecommunications, Inc, Amphenol, ITT Cannon (a subsidiary of ITT Industries),Kings Electronics Co., Inc, Radiall, S.A. and numerous other companies globally. In the microwaveproducts business, we compete with Huber+Suhner, WL Gore Associates, Inc. and a large number ofsmaller companies.
4

 

     Many of these companies have substantially greater financial, technical, marketing anddistribution resources and brand name recognition than we have. As a result, these competitors areable to devote greater resources than we can to the development, promotion, sale and support oftheir products. In addition, several of our competitors have large market capitalizations or cashreserves and are much better positioned than we are to acquire other companies in order to gain newtechnologies or products. Many of our competitors have much greater name recognition, moreextensive customer bases, better-developed distribution channels and broader product offerings thanwe do. These companies may leverage their customer bases and broader product offerings and adoptaggressive pricing policies to gain market share. In addition, companies with diversified productofferings can better sustain an economic downturn.
     We expect that more companies, including some of our customers, will enter the markets for ourproducts. We may not be able to compete successfully against either current or future competitors.Competitive pressures, combined with weakening demand, may result in further price reductions,lower margins and loss of market share. In addition, some of our current and potential customersare attempting to integrate their operations by producing their own subsystems or components oracquiring one or more of our competitors, which may eliminate the need to purchase our products.Furthermore, larger companies in other related industries are developing and acquiring technologiesand applying their significant resources, including their distribution channels and brand namerecognition, in an effort to capture significant market share. While this trend has nothistorically impacted our competitive position, it may result in future decreases in our net sales.
     Further, we manufacture many of our products in the United States and the United Kingdom. Ourmanufacturing costs are higher than the manufacturing costs of some of our competitors,particularly those located in foreign countries that benefit from lower-priced labor and governmentsubsidies. If our current or potential future customers decide to purchase products from theselower-cost competitors, we could suffer a significant decline in our sales, which could have amaterial adverse effect on our business, operating results and financial condition.
**We depend on suppliers for several key components. If we underestimate or overestimate ourrequirements for these components, our business could be significantly harmed.**
     We purchase several key components that are incorporated into our products from a limitednumber of suppliers. We have experienced shortages and delays in obtaining key components in thepast and expect to experience shortages and delays in the future. These shortages and delays havetypically occurred when demand within the industry has increased rapidly and exceeded the capacityof suppliers of key components in the short term. Delays and shortages also often occur in theearly stages of a product’s life cycle. The length of shortages and delays in the past has variedfrom several days to a month. We are unable to predict the length of any future shortages ordelays.
     Some of our critical components used in production of certain of our products are purchasedfrom a key supplier, which has been acquired by one of our competitors. If this supplier increasesprices, reduces quantities available to us or ceases to supply us, our business and results ofoperations may be significantly harmed.
5

 

     The inability to obtain sufficient quantities of these components that meet our qualityrequirements may interrupt and delay the manufacturing of our products or result in thecancellation of orders for our products. In addition, our suppliers could discontinue themanufacture or supply of these components at any time. We may not be able to identify and integratealternative sources of supply in a timely fashion, or at all. Any transition to alternativesuppliers may result in delays in shipment and increased expenses and may limit our ability todeliver products to our customers. Furthermore, if we are unable to identify an alternative sourceof supply, we may have to redesign or modify our products, which may cause delays in shipments,increased design and manufacturing costs and increased prices for our products.
     We make forecasts for our component requirements based on anticipated product orders.Although from time to time we enter into long-term agreements for the purchase of key components,our purchases of key components are generally made on a purchase order basis. We may also maintainan inventory of limited source components to limit the potential impact of a component shortage. Wemay not accurately predict the demand for our products and the lead-time required to obtain keycomponents. If we overestimate our requirements, we may have excess inventory, which may becomeobsolete and would increase our costs. If we underestimate our requirements, we may have inadequateinventory, which could interrupt our manufacturing and delay delivery of our products to ourcustomers. Either of these occurrences would significantly harm our business.
**Our success depends on our ability to hire and retain qualified personnel, and if we are unable todo so, our product development efforts and customer relations will suffer.**
     Our products require sophisticated manufacturing, research and development, marketing andsales, and technical support. Our success depends on our ability to attract, train and retainqualified technical personnel in each of these areas. Competition for personnel in all of theseareas is intense and we may not be able to hire or retain sufficient personnel to achieve our goalsor support the anticipated growth in our business. The market for the highly-trained personnel werequire is very competitive, due to the limited number of people available with the necessarytechnical skills and understanding of our products and technology. If we fail to hire and retainqualified personnel, our product development efforts and customer relations will suffer.
**Our products may contain defects, which may cause us to incur significant costs, divert ourattention from product development efforts and result in a loss of customers.**
     Our products are complex and may contain defects, particularly when first introduced or as newversions are released. Our customers integrate our subsystems and components into systems andproducts that they develop themselves or acquire from other vendors. As a result, when problemsoccur in equipment or systems into which our products have been incorporated, it may be difficultto identify the source of the problem. We may be subject to liability claims for damages related toproduct defects or experience manufacturing delays as a result of these defects in the future, anyor all of which could be substantial. The length of any future
6

 

manufacturing delays in connection with a product defect will depend on the nature of thedefect, and whether we or one of our component suppliers was the source of the defect. Moreover,the occurrence of defects, whether caused by our products or technology or the products of anothervendor, may result in significant customer relations problems and injury to our reputation and mayimpair the market acceptance of our products and technologies.
**We are subject to environmental laws and other legal requirements that have the potential tosubject us to substantial liability and increase our costs of doing business.**
     Our properties and business operations are subject to a wide variety of environmental, healthand safety laws and other legal requirements, including those relating to the storage, use,discharge and disposal of toxic, volatile or otherwise hazardous substances used in ourmanufacturing processes. We cannot assure you that these legal requirements will not impose on usthe need for additional capital expenditures or other requirements. If we fail to obtain requiredpermits or otherwise fail to operate within these or future legal requirements, we may be requiredto pay substantial penalties, suspend our operations or make costly changes to our manufacturingprocesses or facilities. Although we believe that we are in compliance and have complied with allapplicable legal requirements, we may also be required to incur additional costs to comply withcurrent or future legal requirements.
**Economic, political and regulatory risks associated with international operations may limit oursales and increase our costs of doing business abroad.**
     A significant portion of our sales is generated from customers located outside the UnitedStates, principally in Europe. We also operate a manufacturing facility in the United Kingdom.Sales to customers located outside of the United States were approximately 26.6% of our net salesduring the nine months ended January 31, 2005 and approximately 35.0% of our net sales during thenine months ended January 31, 2004, which did not fully reflect sales from Sterling, which weacquired on November 6th, 2003. Our international operations are subject to a number ofrisks and uncertainties, including:
 •  difficulties in managing operations in different locations;  •  changes in foreign currency rates;  •  longer accounts receivable collection cycles;  •  difficulties associated with enforcing agreements through foreign legal systems;  •  seasonal reductions in business activities in some parts of the world, such asduring the summer months in Europe;  •  trade protection measures and import and export licensing requirements;  •  changes in a specific country’s or region’s political or economic conditions;  •  potentially adverse tax consequences;  •  the potential difficulty in enforcing intellectual property rights in some foreigncountries; and  •  acts of terrorism directed against the United States or U.S. affiliated targets
7

 

     These, and other factors could adversely impact our international sales or increase our costsof doing business abroad or impair our ability to expand into international markets, and thereforecould significantly harm our business.
**We may pursue additional acquisitions. If we are unable to successfully integrate any businessesor technologies that we acquire in the future or are unable to realize the intended benefits of anyfuture acquisitions, our business will be harmed.**
     As part of our strategy, we may pursue opportunities to buy other businesses or technologiesthat would complement our current products, expand our markets or enhance our technicalcapabilities, or that may otherwise offer growth opportunities. Our experience in acquiring otherbusinesses and technologies is limited. Acquisitions could result in a number of financialconsequences, including:
 •  use of significant amounts of cash;  •  the incurrence of debt and contingent liabilities;  •  potentially dilutive issuances of equity securities;  •  large one-time write-offs; and  •  amortization expenses related to intangible assets.
     Acquisitions also involve numerous operational risks, including:
 •  difficulties in integrating operations, products, technologies and personnel;  •  unanticipated costs or write-offs associated with the acquisition;  •  diversion of management’s attention from other business concerns;  •  diversion of capital and other resources from our existing businesses; and  •  potential loss of key employees of purchased organizations.
     If we are unable to successfully integrate other businesses or technologies that we mayacquire in the future or are unable to realize the intended benefits of any future acquisitions,our business will be harmed.
**Our inability to protect our intellectual property rights would significantly impair their valueand our competitive position.**
     We rely on a combination of patent, copyright, trademark and trade secret laws, as well asconfidentiality agreements and licensing arrangements, to establish and protect our proprietaryrights. Although we have numerous issued patents and pending patent applications, we cannot assureyou that any patents will be issued as a result of our pending patent applications or, if issued,that any patent claim allowed will be sufficiently broad to protect our technology. In addition,we cannot assure you that any existing or future patents will not be challenged, invalidated orcircumvented, or that any right granted thereunder would provide us with meaningful protection ofour technology. Despite our efforts to protect our proprietary rights, unauthorized parties mayattempt to copy or otherwise obtain and use our products or technology. We may be unable to detectthe unauthorized use of our intellectual property or to take appropriate steps to enforce ourintellectual property rights. Policing unauthorized use of
8

 

our products and technology is difficult. In addition, the laws of some foreign countries donot protect our proprietary rights to the same extent as do the laws of the United States. Further,enforcing our intellectual property rights could result in the expenditure of significant financialand managerial resources and the success of these efforts cannot be predicted with certainty.Litigation has been necessary and may continue to be necessary in the future to enforce ourintellectual property rights. Such litigation could be costly and its outcome cannot be predictedwith certainty. Our inability to adequately protect against unauthorized use of our intellectualproperty would significantly impair its value and our competitive position.
**We are currently involved in pending patent litigation, which, if decided against us, could impairour ability to prevent others from using our technology, result in the loss of future royaltyincome and require us to pay significant monetary damages.**
     See discussion under Part II, Item 1: “Legal Proceedings”, located elsewhere in thisdocument.
**Various litigation matters, in which we are defendants, could result in significant monetarydamages and expenses or restrictions on our ability to sell our products.**
     We are involved in various litigation matters that arise from time to time in the ordinarycourse of business. Our Annual Reports on Form 10-K and quarterly reports on Form 10-Q describecertain matters, in which we are defendants.
     In recent years, there has been significant litigation in the United States involving patentsand other intellectual property rights. From time to time, third parties may assert patent,copyright and other intellectual property rights to technologies used in our business. Inaddition, our rights to use our name or other trademarks are subject to challenge by others. Anyclaims, with or without merit, could be time-consuming, result in costly litigation, and divert theefforts of our technical and management personnel. If we are unsuccessful in defending ourselvesagainst such claims, we could be subject to significant monetary damages and may be required to doone or more of the following: (1) stop using the challenged technology or selling our productsthat use or incorporate such technology, (2) attempt to obtain a license to sell or use therelevant technology, which license may not be available on reasonable terms or at all, (3) attemptto license a substitute technology on reasonable terms or (4) redesign the applicable products toavoid infringement.
     In the event a claim against us were successful and we could not obtain a license to therelevant technology on acceptable terms or license a substitute technology or redesign our productsto avoid infringement, our business would be significantly harmed.
9

 

**Risks Relating to the Securities Markets and Ownership of Our Common Stock**
**The market prices for securities of technology related companies have been volatile in recent yearsand our stock price could fluctuate significantly.**
     Our common stock has been publicly traded only since June 27, 2000. The market price of ourcommon stock has been subject to significant fluctuations since the date of our initial publicoffering. These fluctuations could continue. Factors that could affect our stock price include:
 •  economic and stock market conditions generally and specifically as they may impactparticipants in the communications industry;  •  earnings and other announcements by, and changes in market evaluations of,participants in the communications industry;  •  changes in financial estimates and recommendations by securities analysts followingour stock;  •  announcements or implementation by us or our competitors of technical innovations ornew products; and  •  strategic moves by us or our competitors, such as acquisitions.
     In addition, the securities of many companies have experienced extreme price and volumefluctuations in recent years, often unrelated to the companies’ operating performance.Specifically, market prices for securities of technology related companies have frequently reachedelevated levels, often following their initial public offerings. These levels may not besustainable and may not bear any relationship to these companies’ operating performances.
**Provisions in our charter documents and Delaware law may delay or prevent an acquisition of ourcompany, which could decrease the value of your shares.**
     Our restated certificate of incorporation and bylaws and Delaware law contain provisions thatcould make it more difficult for a third party to acquire us without the consent of our board ofdirectors or a supermajority of our shareholders. These provisions include limitations on actionsby our shareholders by written consent. In addition, our board of directors has the right to issuepreferred stock without shareholder approval, which could be used to dilute the stock ownership ofa potential hostile acquirer. Delaware law also imposes some restrictions on mergers and businesscombinations between us and any holder of 15% or more of our outstanding common stock. Theseprovisions apply even if the offer may be considered beneficial by some shareholders.
10