1326531--3/31/2006--TWC_Holding

related topics

{debt, indebtedness, cash}

{regulation, government, change}

{product, liability, claim}

{condition, economic, financial}

{operation, natural, condition}

{cost, regulation, environmental}

{cost, contract, operation}

{property, intellectual, protect}

{personnel, key, retain}

{customer, product, revenue}

{investment, property, distribution}

Risks Related to Our Indebtedness Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our indebtedness. Despite our current indebtedness levels, we may still be able to incur substantially more debt. This could exacerbate further the risks associated with our substantial leverage. Our ability to make payments under the notes and to service our other debt may depend on cash flow from our subsidiaries. The indenture governing the notes and our credit facility impose significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions. To service our indebtedness, we will require a significant amount of cash, and our ability to generate cash depends on many factors beyond our control. The co-issuers are the sole obligors under the Senior PIK notes and they may not have access to the cash flow and other assets of their subsidiaries that may be needed to make payment on the exchange notes. The Senior PIK notes are structurally subordinated to the debt and liabilities of the co-issuers subsidiaries, and are effectively subordinated to any of the co-issuers future secured debt. Risks Related to Our Business We rely on sales to U.S. Government entities. A loss of our contracts with the U.S. Government or a reduction of sales under those contracts would have a material adverse effect on our business. Our U.S. Government contracts contain unfavorable provisions and are subject to audit. Our strategy depends on continued outsourcing by our government and commercial customers. A reduction in the U.S. defense budget or a change in our relationship with the U.S. Government could have a material adverse effect on our business. Government contracts are subject to competitive bidding. If we are unable to successfully compete in the bidding process or if we fail to receive renewal or follow-on contracts, our results of operations will suffer. Our fixed-price contracts could subject us to losses in the event that we have cost overruns. Our operating results depend on the U.S. Government s demand for our food products and that demand can fluctuate significantly. Such fluctuations in demand may have a material adverse effect on our results of operations and financial condition. Our backlog is subject to reduction and cancellation. We have no redundant production facilities. Therefore, the loss of one of our facilities would materially adversely affect our production capability. Governmental regulation may have a negative impact on our business. Product recalls could have a material adverse effect on our business. Food-borne illness incidents could reduce our sales. Product liability claims could have a material adverse effect on our business. Our industry has low profit margins and is sensitive to national and regional economic conditions and other factors. Veritas Capital controls us and may have conflicts of interest with other holders of our securities, including the exchange notes. We depend on the services of key executives and technical and other personnel, the loss of whom could materially harm our business or reduce our operational effectiveness. Our failure to enforce and maintain our trademarks could adversely affect our ability to establish and maintain brand awareness. Environmental laws and regulations may subject us to significant costs and liabilities.

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1326531--3/31/2006--TWC_Holding_LLC