1423221--12/20/2010--Quanex_Building_Products

related topics

{customer, product, revenue}

{product, market, service}

{acquisition, growth, future}

{debt, indebtedness, cash}

{cost, regulation, environmental}

{system, service, information}

{cost, operation, labor}

{product, liability, claim}

{condition, economic, financial}

{provision, law, control}

{operation, natural, condition}

{operation, international, foreign}

If the Company s raw materials or energy were to become unavailable or to significantly increase in price, the Company might not be able to timely produce products for its customers or maintain its profit levels. The Company depends on supplier relationships, insurance providers, and other vendors, and any disruption in these relationships may cause damage to its customer relationships or delays to its business. The Company s business is generally cyclical in nature. Fewer housing starts, reduced remodeling expenditures or weaknesses in the economy could significantly reduce revenue, net earnings and cash flow. The Company is subject to various environmental requirements, and compliance with, or liabilities under, existing or future environmental laws and regulations could significantly increase the Company s costs of doing business. The Company may not be able to successfully identify, manage or integrate future acquisitions, and if it is unable to do so, the Company s rate of growth and profitability could be adversely affected. If the Company s information technology systems fail, or if the Company experiences an interruption in their operation, then the Company s business, financial condition and results of operations could be materially adversely affected. The Company operates in competitive markets, and its business will suffer if it is unable to adequately address potential downward pricing pressures and other factors that may reduce operating margins. Original Equipment Manufacturers (OEMs) have significant pricing leverage over suppliers and may be able to achieve price reductions over time, which will reduce the Company s profits. The Company could lose customers and the related revenues due to the transfer of manufacturing capacity by its customers out of the United States to lower cost regions of the world. If the Company s relationship with its employees were to deteriorate, the Company could be faced with labor shortages, disruptions or stoppages, which could shut down certain of its operations, reducing revenue, net earnings, and cash flows. Changes in regulatory requirements or new technologies may render the Company s products obsolete or less competitive. Equipment failures, delays in deliveries or catastrophic loss at any of the Company s manufacturing facilities could lead to production curtailments or shutdowns that prevent the Company from producing its products. The Company s business involves complex manufacturing processes that may result in costly accidents or other disruptions of its operations. Flaws in the design or manufacture of the Company s products could cause future product liability or warranty claims for which it does not have adequate insurance or affect its reputation among customers. The Company s credit facility contains restrictions on the Company s ability to implement its acquisition program. The Company s credit facility contains certain financial covenants that limit the aggregate availability of funds. Failure to obtain alternative financing created by a potential breach of the lender s funding commitment could negatively impact the Company s growth strategy. The Company s corporate governance documents as well as Delaware law may delay or prevent an acquisition that stockholders may consider favorable, which could decrease the value of the Company s shares. The Company s expansion plans outside the United States may not succeed. The Company may not have the right infrastructure (people, systems, and processes) in place to achieve its growth initiatives. The Company s success depends upon its ability to develop new products and services, integrate acquired products and services and enhance its existing products and services through product development initiatives and technological advances.

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1423221--12/20/2010--Quanex_Building_Products_CORP