1329364--4/2/2007--PQ

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{condition, economic, financial}

{property, intellectual, protect}

{operation, international, foreign}

{acquisition, growth, future}

{product, market, service}

{product, liability, claim}

{stock, price, operating}

{personnel, key, retain}

{regulation, change, law}

{competitive, industry, competition}

Risks Relating to Our Business We face substantial competition in the markets in which we operate. Alternative technology may eliminate the need for our specialty chemicals and engineered glass products. Increased costs of raw materials and natural gas may result in increased operating expenses and adversely affect our results of operations and cash flow. Demand for some of our products is seasonal and we may experience prolonged depressed market conditions for our products. Reductions in highway safety spending could result in a decline in our sales. As a global business, we are exposed to local business risks in different countries which could have a material adverse effect on our financial condition, results of operations and cash flows. If we lose certain key personnel or are unable to hire additional qualified personnel, our business could be adversely affected because we may not be able to execute our business strategy. Certain of our businesses are subject to government regulation, and could be adversely affected by future governmental regulation. Exchange rate fluctuations could adversely affect our results of operations and cash flows. We may be liable for damages based on product liability claims brought against us and our customers in our end-use markets. Environmental, health and safety matters could require material expenditures and changes in our operations. Acquisitions that we pursue may present unforeseen integration obstacles or costs. Our failure to protect our intellectual property rights could adversely affect our future performance and growth. Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or prevent us from selling our products. Risks Relating to Our Indebtedness Our substantial leverage and significant debt service obligations could adversely affect our ability to fulfill our obligations, including the notes, and make it more difficult for us to fund our operations. Despite our substantial indebtedness, we may still be able to incur significantly more debt. This could intensify the risks described above. We are subject to a number of restrictive covenants which, if breached, may restrict our business and financing activities. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. We are controlled by an affiliate of JPMP and its interests as an equity holder may conflict with those of our creditors. Efforts to comply with the Sarbanes-Oxley Act will involve significant expenditures, and non-compliance with the Sarbanes-Oxley Act may adversely affect us.

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1329364--4/2/2007--PQ_CORP