1048685--3/16/2009--METALICO

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The profitability of our scrap recycling operations depends, in part, on the availability of an adequate source of supply. The cyclicality of our industry could negatively affect our sales volume and revenues. The volatility of the import and export markets may adversely affect our operating results and financial condition. The volatility of lead pricing may impact our ability to sell product. An impairment in the carrying value of goodwill or other acquired intangibles could negatively affect our operating results and net worth. Our significant indebtedness may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns. Our indebtedness contains covenants that restrict our ability to engage in certain transactions and failure to comply with the terms of such indebtedness could result in a default that could have material adverse consequences for us. We have pledged substantially all of our assets to secure our borrowings and are subject to covenants that may restrict our ability to operate our business. We may not generate sufficient cash flow to service all of our debt obligations. We may seek to make acquisitions that may prove unsuccessful or strain or divert our resources. We intend to develop greenfield projects which are subject to risks commonly associated with such projects. The markets in which we operate are highly competitive. Competitive pressures from existing and new companies could have a material adverse effect on our financial condition and results of operations. Unanticipated disruptions in our operations or slowdowns by our shipping companies could adversely affect our ability to deliver our products, which could materially and adversely affect our revenues and our relationship with our consumers. Our operations consume large amounts of electricity and natural gas, and shortages, supply disruptions or substantial increases in the price of electricity and natural gas could adversely affect our business. The loss of any member of our senior management team or a significant number of our managers could have a material adverse effect on our ability to manage our business. The concentration of our consumers and our exposure to credit risk could have a material adverse effect on our results of operations and financial condition. A significant increase in the use of scrap metal alternatives by current consumers of processed scrap metals could reduce demand for our products. Our operations are subject to stringent regulations, particularly under applicable environmental laws, which could subject us to increased costs. If more of our employees become members of unions, our operations could be subject to interruptions, which could adversely affect our results of operations and cash flow. Our operations present significant risk of injury or death. We may be subject to claims that are not covered by or exceed our insurance. Our business is seasonal and affected by weather conditions, which could have an adverse effect on our revenues and operating results. Risks Relating To Our Common Stock We do not expect to pay any dividends for the foreseeable future. Our stockholders may never obtain a return on their investment. Our certificate of incorporation, our bylaws, Delaware law and certain instruments binding on us contain provisions that could discourage a change in control. We have incurred and will continue to incur significant increased costs in order to assess our internal controls over financial reporting and our internal controls over financial reporting may be found to be deficient. The market price of our common stock has declined significantly and may continue to be volatile and our stock price may decline further.

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1048685--3/16/2009--METALICO_INC