1089542--3/31/2006--SFBC_INTERNATIONAL

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{financial, litigation, operation}

{regulation, change, law}

{cost, contract, operation}

{competitive, industry, competition}

{stock, price, share}

{stock, price, operating}

{debt, indebtedness, cash}

{customer, product, revenue}

{operation, international, foreign}

{acquisition, growth, future}

{cost, regulation, environmental}

{product, market, service}

{regulation, government, change}

{product, liability, claim}

{control, financial, internal}

{tax, income, asset}

{system, service, information}

{personnel, key, retain}

If we are unable to deal with all of the issues affecting the property upon which our Miami facility operates, we may lose future revenue and our future results of operations may be materially and adversely affected. While we are cooperating with the requests of the Senate Finance Committee for documents and will produce current employees if their presence before the Committee or its staff is requested, we are concerned that continued public disclosure could cause clients to withhold future work from us. Depending upon the outcome, the inquiry by the SEC can result in our being sued by the SEC and being subject to equitable relief including payment of a fine and civil monetary penalties. The pending FDA open item and other FDA inspections may cause clients not to award future contracts to us or cancel existing contracts, which may have a material and adverse affect on our future results of operations. While we have insurance coverage in connection with the pending class actions, the potential adverse outcome may exceed our insurance coverage. If there is an adverse outcome in the securities class action lawsuits that have been filed against us, our business may be materially harmed. Further, defending against these and other lawsuits may be expensive and could divert the attention of our management. If we are unable to stabilize our operations in Miami, we may be unable to compete effectively in that area. The risks set forth immediately above as well as those in the balance of these risk factors may cause us not to meet our 2006 or future earnings guidance, which could cause our stock price to fall substantially. Risks Related to Our Business We have grown rapidly over the last few years, and our growth has placed, and is expected to continue to place, significant demands on us. A significant portion of our growth has come from acquisitions, and we may make more acquisitions in the future as part of our continuing growth strategy. This growth strategy subjects us to numerous risks. We are subject to changes in outsourcing trends and regulatory requirements affecting the branded pharmaceutical, biotechnology, generic drug and medical device industries which could adversely affect our operating results. If branded pharmaceutical, biotechnology, generic drug or medical device companies reduce their expenditures, our future revenue and profitability may be reduced. If we do not continue to generate a large number of new client contracts, or if our clients cancel or defer contracts, our future profitability may be adversely affected. At any given time, one or a limited number of clients may account for a large percentage of our revenue, which means that we could face a greater risk of loss of revenue if we lose a major client. We may bear financial risk if we under-price our contracts or overrun cost estimates. If we are not able to remediate the material weaknesses relating to our internal controls or if we incur further instances of breakdowns in our internal controls, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the price of our common stock. Our indebtedness may impact our financial condition and results of operations and the terms of our outstanding indebtedness may limit our activities. We may not have sufficient funds to pay the principal return upon conversion or to repurchase our outstanding convertible senior notes under circumstances when we are required to do so. Our operating results can be expected to fluctuate from period to period. If we are required to write off goodwill or other intangible assets, our financial position and results of operations would be adversely affected. Our business is subject to international economic, political and other risks that could negatively affect our results of operations or financial position. Our substantial non-United States operations expose us to currency risks. We could be adversely affected by tax law changes in Canada or in other jurisdictions. Governmental authorities may question our inter-company transfer pricing policies or change their laws in a manner that could increase our effective tax or otherwise harm our business. Because we are smaller than our largest competitors, we may lack the resources needed to compete effectively. If we do not continue to develop new assay methods for our analytical applications, we may be unable to compete with other entities offering bioanalytical laboratory services. We risk potential liability when conducting clinical trials, which could cost us large amounts of money. We face a risk of liability from our handling and disposal of medical wastes, which could cause us to incur significant costs or otherwise adversely affect us. Failure to comply with applicable governmental regulations could harm our operating results and reputation. If we lose the services of our key personnel or are unable to attract qualified staff, our business could be adversely affected. Our business depends on the continued effectiveness and availability of our information technology infrastructure, and failures of this infrastructure could harm our operations. Risks Related to Our Common Stock We may issue a substantial amount of our common stock in the future which could cause dilution to new investors and otherwise adversely affect our stock price. Recent changes in accounting standards could limit the desirability of granting stock options, which could harm our ability to attract and retain employees, and could also negatively impact our results of operations. Our stock price can be extremely volatile, and your investment could suffer a decline in value.

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1089542--3/31/2006--SFBC_INTERNATIONAL_INC