101116--3/31/2006--UNITED_COMPONENTS

related topics

{debt, indebtedness, cash}

{product, market, service}

{cost, operation, labor}

{cost, regulation, environmental}

{operation, international, foreign}

{acquisition, growth, future}

{gas, price, oil}

{condition, economic, financial}

{product, liability, claim}

{personnel, key, retain}

{property, intellectual, protect}

{competitive, industry, competition}

Our substantial indebtedness could adversely affect our financial condition by limiting our available cash and our access to additional capital. To service our indebtedness, we require a significant amount of cash. Despite our indebtedness levels, we and our subsidiaries may still be able to incur substantially more indebtedness, which would exacerbate the risks associated with our substantial leverage. Restrictive covenants in our senior credit facilities and the indenture governing our outstanding senior subordinated notes may restrict our ability to pursue our business strategies. Our lean manufacturing and other cost saving plans may not be effective. It may be difficult for us to recruit and retain the types of highly-skilled employees we need to remain competitive. We may be subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, either of which could negatively impact the profitability of our business. We are subject to increasing pricing pressure from import activity, particularly from China. As a supplier to the automotive industry, we face certain risks due to the nature of the automotive business. Increased crude oil and energy prices could reduce global demand for and use of automobiles and increase our costs, which could have an adverse effect on our profitability. We could face considerable business and financial risk in implementing our acquisition strategy. Environmental regulations may impose significant environmental compliance costs and liabilities on us. We could face potential product liability claims relating to products we manufacture or distribute. Increases in our raw materials costs or the loss of a number of our suppliers could adversely affect our financial health. We face competition in our markets. If we are unable to meet future capital requirements, our business may be adversely affected. The introduction of new and improved products and services poses a potential threat to the aftermarket for automotive parts. We are subject to risks associated with changing manufacturing techniques, which could place us at a competitive disadvantage. Our international operations are subject to uncertainties that could affect our operating results. Our intellectual property may be misappropriated or subject to claims of infringement.

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101116--3/31/2006--UNITED_COMPONENTS_INC