1266700--3/31/2006--BRODER_BROS

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{cost, operation, labor}

{personnel, key, retain}

{stock, price, operating}

{condition, economic, financial}

{acquisition, growth, future}

{tax, income, asset}

{product, market, service}

{competitive, industry, competition}

{operation, natural, condition}

Our industry is highly competitive and if we are unable to compete successfully we could lose customers and our sales may decline. Slowdowns in general economic activity may detrimentally impact our customers and may have an adverse effect on our sales and profitability. Disruption in our distribution centers could adversely affect our results of operations. We may not realize all of the anticipated operating synergies and cost savings from the prior acquisitions and we may experience difficulties in integrating NES business which may adversely affect our financial performance. We obtain a significant portion of our products from a limited group of suppliers. Any disruption in their ability to deliver products to us or a decrease in demand for their products could have an adverse effect on our results of operations and damage our customer relationships. Our relationships with most of our suppliers are terminable at will and the loss of any of these suppliers could have an adverse effect on our sales and profitability. We do not have any long-term contracts with our customers and the loss of customers could adversely affect our sales and profitability. We must successfully predict customer demand for our private label products to succeed. We rely significantly on one shipper in order to distribute our products to our customers and any service disruption could have an adverse effect on our sales. If any of our distribution facilities were to unionize, we would incur increased risk of work stoppages and possibly higher labor costs. Loss of key personnel or our inability to attract and retain new qualified personnel could hurt our business and inhibit our ability to operate and grow successfully. We may incur restructuring or impairment charges that would reduce our earnings. We may not successfully identify or complete future acquisitions or establish new distribution facilities, which could adversely affect our business. The current principal shareholders of Broder have significant influence over us. Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control and we may be unable to generate sufficient cash flow to meet our debt service obligations. Our failure to comply with restrictive covenants contained in the revolving credit facility or the indenture could lead to an event of default under such instruments.

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1266700--3/31/2006--BRODER_BROS_CO