1011570--2/29/2008--KNOLL

related topics

{cost, regulation, environmental}

{property, intellectual, protect}

{product, market, service}

{customer, product, revenue}

{provision, law, control}

{stock, price, operating}

{condition, economic, financial}

{debt, indebtedness, cash}

{acquisition, growth, future}

{operation, international, foreign}

{personnel, key, retain}

{product, liability, claim}

{regulation, government, change}

{cost, operation, labor}

{stock, price, share}

Risks Related to our Business Our product sales are tied to corporate spending and service-sector employment, which are outside of our control. Our sales and/or growth in sales would be adversely affected by a recessionary economy characterized by decreased corporate spending and service-sector employment. We may have difficulty increasing or maintaining our prices as a result of price competition, which could lower our profit margins. Our competitors may develop new product designs that give them an advantage over us in making future sales. Our efforts to introduce new products that meet customer and workplace requirements may not be successful, which could limit our sales growth or cause our sales to decline. We may not be able to manage our business effectively if we are unable to retain our experienced management team or recruit other key personnel. We are dependent on the pricing and availability of raw materials and components, and price increases and unavailability of raw materials and components could lower sales, increase our cost of goods sold and reduce our profits and margins. We are affected by the cost of energy and increases in energy prices could reduce our margins and profits. We rely upon independent furniture dealers, and a loss of a significant number of dealers could affect our business, financial condition and results of operations. One of our largest clients currently is the U.S. government, a relationship, which is subject to uncertain future funding levels and federal procurement laws and requires restrictive contract terms; any of these factors could curtail current or future business. We operate with leverage, and a significant amount of cash will be required to service our indebtedness. Restrictions imposed by the terms of our indebtedness may limit our operating and financial flexibility. We may require additional capital in the future, which may not be available or may be available only on unfavorable terms. An inability to protect our intellectual property could have a significant impact on our business. If third parties claim that we infringe upon their intellectual property rights, we may incur liability and costs and may have to redesign or discontinue an infringing product. We could be required to incur substantial costs to comply with environmental requirements. Violations of, and liabilities under, environmental laws and regulations may increase our costs or require us to change our business practices. We are subject to potential labor disruptions, which could have a significant impact on our business. Our insurance may not adequately insulate us from expenses for product defects. We may be vulnerable to the effects of currency exchange rate fluctuations, which could increase our expenses. Risks Related to Our Common Stock Our corporate documents and Delaware law contain provisions that could discourage, delay or prevent a change in control of our company. Our stock price may be volatile, and your investment in our common stock could suffer a decline in value.

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1011570--2/29/2008--KNOLL_INC