50725--11/29/2007--GRIFFON

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{stock, price, share}

{condition, economic, financial}

{system, service, information}

{competitive, industry, competition}

{product, market, service}

{property, intellectual, protect}

{operation, international, foreign}

{investment, property, distribution}

{personnel, key, retain}

{product, liability, claim}

{customer, product, revenue}

{regulation, change, law}

Trends in the housing sector and in general economic conditions will directly impact the business. The Company operates in highly competitive industries and may be unable to compete effectively. If the Company were to lose any of its largest customers, the results of operations could be significantly harmed. Increases in raw material costs could adversely impact the financial condition and operating results. Trends in the baby diaper market will directly impact the business. The electronic information and communication systems business depends heavily upon government contracts. The Company must continually improve existing products, design and sell new products and manage the costs of research and development in order to compete effectively. The loss of certain key officers or employees could adversely affect the Company. The businesses are subject to seasonal variations. The Company is exposed to a variety of risks relating to international sales and operations, including foreign economic and political conditions and fluctuations in exchange rates. The Company may not be able to protect its proprietary rights. The Company is exposed to product liability claims. The Company has been, and may in the future be, subject to claims and liabilities under environmental laws and regulations. Changes in income tax laws and regulations or exposure to additional income tax liabilities could adversely affect profitability. The Company's compliance with restrictions and covenants in its debt agreements may limit its ability to take corporate actions and harm the business. The Company's inability to repurchase outstanding convertible notes as required under the indenture may cause an event of default under other agreements. The Company's reported earnings per share may be more volatile because of the conversion contingency provision of the notes. The Company may be unable to raise additional financing necessary to conduct its business, make payments when due or refinance its debt. The Company's indebtedness and interest expense will limit its cash flow and could adversely affect its operations and its ability to make full payment on its outstanding notes. The Company has the ability to issue additional equity securities, which would lead to dilution of its issued and outstanding common stock.

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50725--11/29/2007--GRIFFON_CORP