101271--3/14/2006--UNITED_INDUSTRIAL_CORP

related topics

{regulation, government, change}

{product, market, service}

{debt, indebtedness, cash}

{cost, contract, operation}

{operation, international, foreign}

{customer, product, revenue}

{regulation, change, law}

{product, candidate, development}

{personnel, key, retain}

{property, intellectual, protect}

{acquisition, growth, future}

{provision, law, control}

{cost, regulation, environmental}

{tax, income, asset}

The Company depends on government contracts for substantially all of its sales. As a U.S. Government contractor, the Company is subject to a number of procurement rules and regulations. The Company s businesses could be adversely affected by a negative audit by the U.S. Government. The Company s revenues will be adversely affected if the Company fails to win competitively awarded contracts or to receive renewal or follow-on contracts. Cost overruns on the Company s fixed-price contracts could subject it to losses, decrease its operating margins and adversely affect its future business. Other risks associated with U.S. Government contracts may expose the Company s business to adverse consequences. Failure to perform by one of the Company s subcontractors, partners or suppliers could materially and adversely affect the Company s performance and its ability to obtain future business. The Company derives revenues from international sales and is subject to the risks of doing business in foreign countries. The Company may not be successful in obtaining the necessary licenses to conduct operations abroad and Congress may prevent proposed sales to foreign governments. The Company operates in highly competitive markets and its future success will depend on its ability to develop new technologies that achieve market acceptance and to compete successfully. United Industrial and Detroit Stoker are subject to asbestos related litigation and other liabilities. In addition to asbestos related claims, the Company may face costly litigation. The Company is subject to significant environmental laws and regulations. The Company s level of returns on pension plan assets and interest rates could affect its earnings and cash flows in future periods. The Company depends on the recruitment and retention of qualified personnel and its failure to attract and retain such personnel could seriously harm the Company s business. The Company may be unable to adequately protect its intellectual property rights, which could affect its ability to compete. The Company intends to complement its growth strategy through acquisitions, which subject the Company to numerous risks. The Company increased its leverage as a result of the sale of the 3.75% Convertible Senior Notes. The Company may violate financial covenants under its credit facility which could have a material adverse effect on the Company s liquidity and financial condition. The terms of the credit facility may restrict the Company s financial and operational flexibility, including its ability to invest in new business opportunities. Changes in stock option accounting rules will adversely impact the Company s results of operations prepared in accordance with generally accepted accounting principles. The Company s charter and bylaws, Delaware law and the indenture for the Company s 3.75% Convertible Senior Notes contain provisions that could discourage a takeover even if beneficial to shareholders.

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101271--3/14/2006--UNITED_INDUSTRIAL_CORP_/DE/