1356711--3/29/2007--CPG_INTERNATIONAL

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{acquisition, growth, future}

{condition, economic, financial}

{cost, regulation, environmental}

{product, liability, claim}

{control, financial, internal}

{loss, insurance, financial}

{property, intellectual, protect}

{personnel, key, retain}

{product, market, service}

Risks Related to Our Business Our financial performance is dependent on raw material prices, as well as the continued availability of raw materials. Our continued success is dependent on the performance of our AZEK products, which represent a significant portion of our net sales. We face competition in each of our businesses and our customers may not continue to purchase our products. Some of our products experience seasonality. If we are unable to meet future capital requirements, our business may be adversely affected. Our business could be materially hurt by economic downturns. Our business is subject to risks associated with manufacturing processes. Our sales, cash flows from operations and results of operations may decrease if our relations with our key distributors decline. Acquisitions we may pursue in the future may be unsuccessful. Our insurance coverage may be inadequate to protect against the potential hazards incident to our business. We provide product warranties that could expose us to claims, which could in turn damage our reputation and adversely affect our business. Our business operations could be significantly disrupted if members of our management team were to leave. Our business operations could be negatively impacted if we fail to adequately protect our intellectual property rights or if third parties claim that we are in violation of their intellectual property rights. The cost of complying with laws relating to the protection of the environment may be significant. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our indebtedness. Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control. The indenture governing our outstanding notes and our senior secured revolving credit facility impose significant operating and financial restrictions, which may prevent us from capitalizing on business opportunities and taking some actions.

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1356711--3/29/2007--CPG_INTERNATIONAL_INC.