1028215--10/16/2007--KMG_CHEMICALS

related topics

{operation, natural, condition}

{cost, regulation, environmental}

{condition, economic, financial}

{cost, operation, labor}

{product, liability, claim}

{competitive, industry, competition}

{loan, real, estate}

{operation, international, foreign}

{regulation, government, change}

{acquisition, growth, future}

{personnel, key, retain}

{debt, indebtedness, cash}

Risks Relating to Our Business We may experience a reduced demand for our wood preserving chemicals if the demand for the wood products on which those chemicals are used decreases, which may adversely affect our business, results of operations, cash flow and financial condition. Increases in the price of our primary raw materials may decrease our profitability and adversely affect our liquidity and cash flow. If our products are not re-registered by the EPA or are re-registered subject to new restrictions, our ability to sell our products may be curtailed or significantly limited. Our products may be rendered obsolete or less attractive by changes in regulatory, legislative, and industry requirements or by supply-chain driven pressures to shift to environmentally preferable alternatives. We are dependent on a limited number of suppliers for cosolvent, creosote and one of our animal health pesticides, the loss of any one of which could have a material adverse effect on our financial condition and results of operations. Weather may impact our ability to conduct business adversely. If we are unable to identify, fund and execute new acquisitions, we will not be able to execute a key element of our business strategy. If we are unable to successfully position ourselves in smaller niche markets, our business may be adversely affected. The specialty chemical industry is highly competitive, and we may not be able to compete effectively with our competitors, which could adversely impact our results of operations. Restrictions in our debt agreements could limit our growth and our ability to respond to changing conditions. The distribution and sale of our products is subject to prior governmental approvals and thereafter ongoing governmental regulation. We are subject to extensive environmental laws and regulations and may incur costs that have a material adverse effect on our financial condition as a result of violations of or liabilities under environmental laws and regulations. Our use of hazardous materials exposes us to potential liabilities. Our business success depends significantly on the reliability and sufficiency of our manufacturing facilities. Our business is subject to many operational risks for which we may not be adequately insured. We may experience a reduction in demand for creosote if our customers dilute creosote with fuel oil prior to treating. Our business may be adversely affected by cyclical and seasonal effects. We depend on our senior management team and the loss of any member could adversely affect our operations. If we are unable to successfully negotiate with the labor unions representing our employees, we may experience a material work stoppage. We are subject to possible risk of terrorist attacks which could adversely affect our business. We are subject to risks inherent in foreign operations, including changes in social, political and economic conditions.

Full 10-K form ▸

1028215--10/16/2007--KMG_CHEMICALS_INC