101271--3/16/2007--UNITED_INDUSTRIAL_CORP

related topics

{regulation, government, change}

{cost, contract, operation}

{customer, product, revenue}

{debt, indebtedness, cash}

{tax, income, asset}

{acquisition, growth, future}

{stock, price, share}

{financial, litigation, operation}

{cost, regulation, environmental}

{system, service, information}

{operation, international, foreign}

{product, candidate, development}

{product, market, service}

{personnel, key, retain}

{provision, law, control}

The company depends on government contracts for subst antially all of its sales and the loss of government contracts or a delay or decline in funding of existing or future government contracts could adversely affect the company s results of operations and ability to fund growth. As a U.S. Government contractor, the company is subject to a number of procurement rules and regulations. The company s business could be adversely affected by a negative audit by the U.S. Government. The company s revenues may be adversely affected if the company fails to win competitively awarded contracts or to receive renewal or follow-on contracts. A decline in the funding for the company s UAS programs or the company s inability to win future UAS contracts could have a material adverse effect on the company s financial position and results of operations. Other risks associated with U.S. Government high technology contracts may expose the company s business to adverse consequences. Military transformation and planning may affect future procurement priorities and existing programs. The company s backlog is subject to reduction and cancellation, which could negatively impact its revenues and results of operations. The company s earnings and profit margins may vary based on the mix of its contracts and programs. The company may be liable for system and service failures. Changes in underlying assumptions, circumstances or judgments used to estimate total revenues and cost at completion have resulted, and may result in the future, in cost overruns or have otherwise adversely affected, and may in the future adversely affect, results of operations, including decreased operating margins. 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. Business disruptions could adversely affect the company s future sales, financial condition, reputation or stock price or increase costs and expenses. 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. The company is subject to litigation and other liabilities, which could have a material adverse effect on the company s business, results of operations and financial condition. The company is subject to significant environmental laws and regulations. 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 s level of returns on employee benefit plans assets and interest rates could affect its earnings and cash flows in future periods. The company has complemented and may continue to complement its growth strategy through acquisitions, which subject the company to numerous risks that could have a material adverse effect on its business, financial condition or results of operations. Future acquisitions may require that the company incur debt or issue dilutive equity. The company may incur material goodwill and other intangible asset impairment charges related to mergers and acquisitions. The company increased its leverage as a result of the sale of the 3.75% Convertible Senior Notes. The 3.75% Convertible Senior Notes carry certain conversion, repurchase and payment rights which may result in the issuance of shares of the company s Common Stock and a dilution of existing shareholders. 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. 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.

Full 10-K form ▸

101271--3/16/2007--UNITED_INDUSTRIAL_CORP_/DE/