1093082--2/26/2010--HUTTIG_BUILDING_PRODUCTS

related topics

{cost, regulation, environmental}

{debt, indebtedness, cash}

{customer, product, revenue}

{condition, economic, financial}

{competitive, industry, competition}

{cost, operation, labor}

{personnel, key, retain}

{loss, insurance, financial}

{acquisition, growth, future}

{product, liability, claim}

The industry in which we compete is highly cyclical, and any downturn resulting in lower demand or increased supply would have a materially adverse impact on our financial results. If we are unable to meet the financial covenant under our credit facility, the lenders could elect to accelerate the repayment of the outstanding balance and, in that event, we would be forced to seek alternative sources of financing. Compliance with the restrictions and the financial covenant under our credit agreement will likely limit, at least in the near term, the amount available to us for borrowing under that facility and may limit management s discretion with respect to certain business matters. We will have to replace our existing credit facility before it expires under terms which may be unfavorable and/or more restrictive as compared to our existing facility. A significant portion of our sales are concentrated with a relatively small number of customers. A loss of one or more of these customers could have a material adverse effect on our operating results, cash flow and liquidity. A significant portion of our sales are on credit to our customers. Material changes in their credit worthiness or our inability to forecast deterioration in their credit position could have a material adverse effect on our operating results, cash flow and liquidity. Fluctuation in prices of commodity wood and steel products that we buy and then resell may have a significant impact on our results of operations. The termination of key supplier relationships may have an immediate material adverse effect on our financial condition and results of operations. The building materials distribution industry is fragmented and competitive, and we may not be able to compete successfully with some of our existing competitors or new entrants in the markets we serve. We have retained accident risk under our insurance programs. Significant claims and/or our inability to accurately estimate the liability for these claims could have a material adverse effect on our operating results. Federal and state transportation regulations, as well as increases in the cost of fuel, could impose substantial costs on us, which could adversely affect our results of operations. Our failure to attract and retain key personnel could have a material adverse effect on our future success. A number of our employees are unionized, and any work stoppages by our unionized employees may have a material adverse effect on our results of operations. We face the risks that product liability claims and other legal proceedings relating to the products we distribute may adversely affect our business and results of operations. We may acquire other businesses, and, if we do, we may be unable to integrate them with our business, which may impair our financial performance. We face risks of incurring significant costs to comply with environmental regulations.

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1093082--2/26/2010--HUTTIG_BUILDING_PRODUCTS_INC