1276827--3/13/2007--INFRASOURCE_SERVICES

related topics

{cost, contract, operation}

{cost, operation, labor}

{condition, economic, financial}

{tax, income, asset}

{customer, product, revenue}

{capital, credit, financial}

{system, service, information}

{personnel, key, retain}

{control, financial, internal}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{acquisition, growth, future}

Demand for our services is cyclical and vulnerable to downturns in the industries we serve, which may result in extended periods of low demand for our services. Our participation in fixed-price contracts exposes us to declines in profitability and contract losses related to cost overruns. Percentage-of-completion accounting on fixed-price contracts requires recognition of the total amount of any expected loss from a contract during the quarter when first determined and could result in a reduction or elimination of previously reported profits and significant fluctuations in financial results. We derive a significant portion of revenue from a small group of customers. The loss of one or more of those customers could negatively impact revenues. Inability to hire or retain key personnel could disrupt business. Skilled worker shortages and increased labor costs could negatively affect the ability to compete for new projects and the performance on existing projects. The Energy Act may fail to spur the anticipated increased investment in electric infrastructure, which could slow our growth. Seasonal and other variations, including severe weather conditions, may cause significant fluctuations in cash flows and profitability, which may cause the market price of our common stock to fall. Backlog may not be realized or may not result in profits. Project delays or cancellations may result in additional costs to us, reductions in revenues or the payment of liquidated damages. Provisions of our senior credit facility restrict business operations and may restrict access to sufficient funding, including letters of credit, to finance desired growth. We are subject to acquisition risks. If we are not successful in integrating acquired companies, we may not achieve the expected benefits and profitability could suffer. In addition, the cost of evaluating and pursuing acquisitions may not result in a corresponding benefit. We cannot be certain of the future effectiveness of internal controls over financial reporting or the impact thereof on our operations or the market price of our common stock. We are implementing a company-wide Enterprise Resource Planning system which could temporarily disrupt day-to-day operations. A significant portion of our business depends on our ability to obtain surety bonds. We may be unable to compete for or work on certain projects if we are not able to obtain the necessary surety bonds. Higher fuel prices and material costs may increase our cost of doing business, and we may not be able to pass those added costs to customers. We are subject to the risks associated with government contracts. Our projects are subject to numerous hazards. If we do not maintain an adequate safety record, we may be ineligible to bid on certain projects, could be terminated from existing projects and could have difficulty procuring adequate insurance. Our unionized workforce could cause interruptions in provision of services. In addition, we contribute to multiemployer plans that could result in liabilities to us if these plans are terminated or we withdraw.

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1276827--3/13/2007--INFRASOURCE_SERVICES_INC