47518--12/6/2006--HILLENBRAND_INDUSTRIES

related topics

{financial, litigation, operation}

{cost, operation, labor}

{operation, international, foreign}

{product, liability, claim}

{personnel, key, retain}

{cost, regulation, environmental}

{regulation, government, change}

{acquisition, growth, future}

{loss, insurance, financial}

{loan, real, estate}

Continued fluctuations in mortality rates and increased cremations may adversely affect, as they have in recent years, the volume of Batesville Casket s sales of burial caskets. Future financial performance will depend in part on the successful introduction of new products into the marketplace on a cost-effective basis. The financial success of new products could be adversely impacted by competitors products, customer acceptance, difficulties in product development and manufacturing, quality issues and warranty claims, certain regulatory approvals and other factors. The introduction of new products may also cause customers to defer purchases of existing products, which could have an adverse effect on sales. Our health care and funeral services businesses are significantly dependent on several major contracts with large national providers and group purchasing organizations, or GPOs. Our relationships with these customers and organizations pose several risks. Increased prices for, or unavailability of, raw materials or sub-assemblies used in our products could adversely affect profitability or revenues. In particular, our results of operations continue to be adversely affected by high prices for steel, red metals, solid wood, plastic and fuel. Our strategic initiatives may not produce the intended growth in revenue and operating income. In addition, the possible separation of our two operating companies into two publicly traded companies may have adverse effects on us. We may not be successful in achieving expected operating efficiencies and operating cost reductions, and may experience business disruptions, associated with announced restructuring, realignment and cost reduction activities. We continue to incur significant legal costs in the defense of antitrust litigation matters involving both Batesville Casket and Hill-Rom and expect these increased costs to continue for the foreseeable future. Moreover, if class certification is granted in any of these antitrust matters and the plaintiffs prevail at trial, our results of operations, financial position and liquidity could be materially adversely affected. Product liability or other liability claims could expose us to adverse judgments or could affect the sales of our products. We are involved on an ongoing basis in claims and lawsuits relating to our operations, including environmental, antitrust, patent infringement, business practices, commercial transactions, and other matters. Our funeral services business is facing increasing competition from a number of non-traditional sources, including sales of competitors caskets through internet casket retailers and large retail discount stores, and caskets manufactured abroad and imported into North America. We may not be able to grow if we are unable to successfully acquire and integrate, or form business relationships with, other companies. We may not be able to attract and retain key personnel. Volatility in our investment portfolio or collection risk associated with our notes receivable portfolio could negatively impact earnings.

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47518--12/6/2006--HILLENBRAND_INDUSTRIES_INC