1001718--3/16/2006--EGL

related topics

{operation, international, foreign}

{cost, regulation, environmental}

{financial, litigation, operation}

{condition, economic, financial}

{competitive, industry, competition}

{property, intellectual, protect}

{stock, price, operating}

{regulation, government, change}

{personnel, key, retain}

{system, service, information}

{loss, insurance, financial}

{customer, product, revenue}

{provision, law, control}

{acquisition, growth, future}

{tax, income, asset}

{regulation, change, law}

{gas, price, oil}

We may not be successful in growing either internally or through acquisitions. Risks associated with operating in international markets could restrict our ability to expand globally and harm our business and prospects. Events impacting the volume of international trade and international operations could adversely affect our international operations. As a U.S. government contractor, we are subject to a number of procurement and other rules and regulations. Fuel shortages and price volatility could adversely affect our business and operations. Our business is subject to seasonal trends. Currency devaluations in the foreign markets in which we operate could decrease demand for our services. Currency fluctuations in the foreign markets in which we operate could result in currency translation exchange gains or losses or could increase or decrease the book value of our net assets. Our effective income tax rate will impact our results of operations, our cash flows and our profitability. If we fail to develop, deploy and integrate financial and operational information technology systems or if we fail to upgrade or replace our information technology systems to handle increased volumes and levels of complexity, meet the demands of our customers and protect against disruptions of our operations, our business may be seriously harmed. If we fail to protect our confidential information, including our intellectual property rights, we may lose market share and our financial condition may be materially adversely affected. Heightened security measures as a result of terrorist threats have created economic, political and regulatory uncertainties, some of which may materially harm our business and prospects and our ability to conduct business. Our ability to serve our customers depends on the availability of cargo space from other parties. We are subject to market pricing by our suppliers (airlines, ocean carriers, and trucking companies). If we are not able to pass these costs on to our customers, our profitability will be impacted. We may lose business to competitors. Our industry is consolidating and if we are unable to gain sufficient market presence in our industry, we may not be able to compete successfully against larger companies in our industry. Our success depends on the efforts of our founder and other key managers and personnel. If we are unable to limit our exposure for customers claims through contract terms and insurance coverage, we could be required to pay large amounts as compensation for their claims and our results of operations could be materially adversely affected. We are subject to claims arising from our pick up and delivery operations. We could incur additional expenses or taxes if the independent owner/operators we use in connection with our local pick up and delivery operations are found to be employees rather than independent contractors. The failure of our policies and procedures which are designed to prevent the unlawful transportation or storage of hazardous, explosive or illegal materials could subject us to large fines, penalties or lawsuits. Our failure to comply with governmental permit and licensing requirements could result in substantial fines or revocation of our operating authorities, and changes in these requirements could adversely affect us. Our chairman beneficially owns approximately 21.7% of our outstanding common stock and has the greatest influence of any of our stockholders. Provisions of our charter, bylaws and shareholder rights plan and of Texas law may delay or prevent transactions that would benefit stockholders.

Full 10-K form ▸

1001718--3/16/2006--EGL_INC