1257296--5/1/2006--HLI_OPERATING_CO

related topics

{cost, operation, labor}

{debt, indebtedness, cash}

{operation, international, foreign}

{product, market, service}

{capital, credit, financial}

{product, liability, claim}

{operation, natural, condition}

{competitive, industry, competition}

{property, intellectual, protect}

{personnel, key, retain}

{cost, regulation, environmental}

{cost, contract, operation}

{tax, income, asset}

{control, financial, internal}

We depend on a small number of significant customers. Our customers cost cutting efforts and purchasing practices may adversely impact our business. We operate in the highly competitive automotive supply industry. We have substantial levels of debt and debt service that will divert a significant amount of cash from our business operations. Restrictions and covenants in the indenture governing the Senior Notes and the Credit Facility limit our ability to take certain actions and may limit access to our revolving credit facility. We may not generate sufficient cash flow to fund required capital expenditures and for that and other reasons we may need additional financing in the future, which we may be unable to obtain. We may suffer future asset impairments and other restructuring charges, including write downs of goodwill or intangible assets. Our exposure to variable interest rates and foreign currency fluctuations may negatively affect our results. We may be unable to maintain trade credit with our suppliers. Our failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and the price of our common stock. The nature of our business exposes us to product liability, recall, and warranty claims and other legal proceedings. Our pension and other postretirement employee benefits expense could materially increase. We have recently experienced downgrades to our credit ratings and we may experience further downgrades in the future. Increased cost of supplies and raw materials, especially steel and iron, could affect our financial health. Unexpected equipment failures, delays in deliveries, or catastrophic loss at any of our manufacturing facilities could lead to production curtailments or shutdowns. We have significant international operations that subject us to risks not faced by domestic competitors. We may not be able to successfully implement our planned operational improvements or realize the benefits of those plans already implemented. We may be unable to successfully launch production at our newly expanded facilities. We may not be able to timely or successfully launch new products. Our success will depend on our ability to attract and retain qualified employees. We might fail to adequately protect our intellectual property or third parties might assert that our technologies infringe on their intellectual property. Our products may be rendered obsolete or less attractive by changes in regulatory requirements or competitive technologies.

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1257296--5/1/2006--HLI_OPERATING_CO_INC