1250189--3/16/2006--INTERLINE_BRANDS

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{acquisition, growth, future}

{system, service, information}

{condition, economic, financial}

{product, market, service}

{product, liability, claim}

{personnel, key, retain}

{property, intellectual, protect}

{cost, regulation, environmental}

{competitive, industry, competition}

Disruption in our information technology system could significantly lower our revenues and profitability. Disruption in our national distribution center could significantly lower our revenues and profitability. We operate in a highly competitive industry and if we are unable to compete successfully we could lose customers and our sales may decline. Competition in our industry is primarily based upon product line breadth, product availability, service capabilities and price. To the extent that existing or future competitors seek to gain or retain market share by reducing price or by increasing support service offerings, we may be required to lower our prices or to make additional expenditures for support services, thereby reducing our profitability. Slowdowns in general economic activity and other unforeseen events may detrimentally impact our customers and thereby significantly reduce our revenues and profitability. Loss of key suppliers, lack of product availability or loss of delivery sources could decrease our revenues and profitability. Our ability to both maintain our existing customer base and to attract new customers is dependent in many cases upon our ability to deliver products and fulfill orders in a timely and cost-effective manner. In some cases we are dependent on long supply chains, which may subject us to interruptions in the supply of many of the products that we distribute. Fluctuations in the cost of raw materials, fuel prices or in currency exchange rates could significantly reduce our revenues and profitability. The loss of any of our significant customers could significantly reduce our revenues and profitability. We may not be able to facilitate our growth strategy by identifying or completing transactions with attractive acquisition candidates, which could impede our revenues and profitability. We cannot assure you that we will be able to successfully complete the integration of future acquisitions or manage other consequences of our acquisitions, which could impede our ability to remain competitive and, ultimately, our revenues and profitability. We may be unable to retain senior executives and attract and retain other qualified employees, which might hinder our growth and could impede our ability to run our business and potentially reduce our revenues and profitability. We may not be able to protect our trademarks, which could diminish the strength of our trademarks or limit our ability to use our trademarks and, accordingly, undermine our competitive position. We could face potential product quality and product liability claims relating to the products we distribute, which could result in a decline in revenues and profitability and negatively impact customer confidence. Our indebtedness may limit our cash flow available to invest in the ongoing needs of our business, which could prevent us from fulfilling our obligations. Despite our level of indebtedness, we may be able to incur substantially more debt. This could further exacerbate the risks described above. The terms of our credit facility and the indenture governing the 11.5% notes may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions. We may not be able to generate sufficient cash flow to meet our debt service obligations.

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1250189--3/16/2006--INTERLINE_BRANDS_INC