1338916--6/29/2006--DynCorp_International

related topics

{debt, indebtedness, cash}

{cost, contract, operation}

{regulation, government, change}

{stock, price, operating}

{personnel, key, retain}

{regulation, change, law}

{cost, operation, labor}

{competitive, industry, competition}

{financial, litigation, operation}

{provision, law, control}

{cost, regulation, environmental}

{customer, product, revenue}

{operation, natural, condition}

We rely on sales to U.S. government entities. A loss of contracts with the U.S. government, a failure to obtain new contracts or a reduction of sales under existing contracts could adversely affect our operating performance and our ability to generate cash flow to fund our operations. Our U.S. government contracts may be terminated by the U.S. government at any time prior to their completion and contain other unfavorable provisions, which could lead to unexpected loss of revenues Our U.S. government contracts are subject to competitive bidding, both upon initial issuance and recompetition. If we are unable to successfully compete in the bidding process or if we fail to receive renewal, it could adversely affect our operating performance and lead to an unexpected loss of revenue. Political destabilization or insurgency in the regions in which we operate may have a material adverse effect on our operating performance. Our indefinite delivery, indefinite quantity contracts are not firm orders for services, and we may never receive revenues from these contracts, which could adversely affect our operating performance. Our cost of performing under time-and-materials and fixed-price contracts may exceed our revenues which would result in a recorded loss on the contracts. A negative audit or other actions by the U.S. government could adversely affect our operating performance. We are subject to investigation by the U.S. government, which could result in our inability to receive government contracts and could adversely affect our future operating performance. An accident or incident involving our employees or third parties could harm our reputation and adversely affect our ability to compete for business and, as a result, adversely affect our operating performance. The expiration of our collective bargaining agreements could result in increased operating costs or work disruptions, which could potentially affect our operating performance. Proceedings against us in domestic and foreign courts could result in legal costs and adversely affect our operating performance. Competition in our industry could limit our ability to attract and retain customers or employees, which could result in a loss of revenue and/or a reduction in margins, which could adversely affect our operating performance. Loss of our skilled personnel, including members of senior management, may have an adverse effect on our operations and/or our operating performance until we find suitable replacements. If our subcontractors fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted. Environmental laws and regulations may subject us to significant costs and liabilities that could adversely affect our operating performance. The requirements of complying with the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002 may strain our resources and distract management. Our substantial level of indebtedness may make it difficult for us to satisfy our debt obligations and may adversely affect our ability to obtain financing for working capital, capitalize on business opportunities or respond to adverse changes in our industry. Our senior secured credit facility and the indenture governing our senior subordinated notes contain various covenants limiting the discretion of our management in operating our business. Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on numerous factors beyond our control, and we may be unable to generate sufficient cash flow to service our debt obligations, which could adversely affect our financial condition. Despite our current indebtedness level, we and our subsidiaries may still be able to incur substantially more debt, which could exacerbate the risks associated with our substantial leverage. If our Class A common stock price fluctuates, you could lose a significant part of your investment. We are controlled by Veritas Capital, whose interests may not be aligned with yours. Even if Veritas Capital no longer controls us in the future, certain provisions of our charter documents and agreements, as well as Delaware law, could discourage, delay or prevent a merger or acquisition at a premium price. We are dependent upon cash flows from our operating activities and availability under our senior secured credit facility as our principal source of liquidity.

Full 10-K form ▸

1338916--6/29/2006--DynCorp_International_Inc