1362614--2/22/2008--NOVAMERICAN_STEEL

related topics

{cost, operation, labor}

{customer, product, revenue}

{cost, regulation, environmental}

{condition, economic, financial}

{system, service, information}

{personnel, key, retain}

{operation, natural, condition}

{capital, credit, financial}

{operation, international, foreign}

{competitive, industry, competition}

{interest, director, officer}

{product, liability, claim}

{acquisition, growth, future}

{gas, price, oil}

Risks Relating to Our Business The prices we pay for steel and the prices we are able to charge our customers for our products may fluctuate due to a number of factors beyond our control, which could negatively affect the prices of our products, reduce our margins of profitability and weaken our financial condition. Our business may be affected by the general economic conditions of the industries that purchase our products. Reduced demand from any one of these industries could result in lower operating income and profitability. An interruption in sources of steel supply could have a material adverse effect on our results of operations. We are subject to product liability claims and other damage claims with respect to the products we produce. We extend trade credit to certain of our customers in the ordinary course of business. Our results of operations may be adversely affected if these customers are unable to repay this credit. We may not be able to grow our business in the future or to manage our growth effectively. Our Canadian operations subject us to currency translation risk which could cause our reported results to fluctuate significantly from period to period. We could incur substantial costs in order to comply with, or to address any violations or liabilities under, environmental and occupational health and safety laws, significantly increasing our operating expenses and reducing our operating income. Unexpected equipment failures may lead to production curtailments or shutdowns. We operate in a highly fragmented and competitive industry and increased competition could reduce our sales and profitability. If our customers, which are primarily North American manufacturing and industrial companies, relocate operations or outsource functions overseas, we could lose their business. Our operations may be impacted by future labor negotiations or work stoppages and our inability to renegotiate labor contracts when they expire. We depend on our operating management team and the loss of a number of the members of our management team could prevent us from implementing our operating methodology. Failure to successfully implement our operating methodology, The Decalogue , may impede our plans to increase revenues and cash flow. The Acquisition could result in disruptions in business, loss of customers or contracts or other adverse effects. Damage to our information technology infrastructure could harm our business. The unaudited pro forma condensed consolidated financial statements are not an indication of the combined company's financial condition or results of operations following the Acquisition.

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1362614--2/22/2008--NOVAMERICAN_STEEL_INC.