1093082--3/9/2006--HUTTIG_BUILDING_PRODUCTS

related topics

{cost, regulation, environmental}

{condition, economic, financial}

{debt, indebtedness, cash}

{competitive, industry, competition}

{cost, operation, labor}

{personnel, key, retain}

{loss, insurance, financial}

{customer, product, revenue}

{acquisition, growth, future}

{product, liability, claim}

{loan, real, estate}

Our sales and profitability depend significantly on new residential construction and home improvement activity in markets in which we compete. The industry in which we compete is highly cyclical, and any downturn resulting in lower demand or increased supply could have a materially adverse impact on our financial results. Our financial results reflect the seasonal nature of our 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. The termination of key supplier relationships may have an immediate adverse effect on our financial condition and results of operations. If we are unable to meet the financial covenants 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 financial covenants 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. 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. 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. 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. 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. Our retained accident risk is based on estimates, which may not be accurate. 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.

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1093082--3/9/2006--HUTTIG_BUILDING_PRODUCTS_INC