60849--3/1/2007--LUFKIN_INDUSTRIES_INC

related topics
{operation, international, foreign}
{cost, regulation, environmental}
{operation, natural, condition}
{cost, operation, labor}
{gas, price, oil}
{condition, economic, financial}
{personnel, key, retain}
{stock, price, operating}
{product, market, service}
{acquisition, growth, future}
{loss, insurance, financial}
{system, service, information}
{regulation, change, law}
The risks described below are those which the Company believes are the material risks that it faces. Any of the risk factors described below could significantly and adversely affect its business, prospects, financial condition and results of operations. A decline in domestic and worldwide oil and gas drilling activity would adversely affect the Company s results of operations. The business of the Trailer segment is highly cyclical, which could adversely affect its business and results of operations. Increases in the prices of our raw materials could adversely affect our margins and results of operations. Interruption in our supply of raw materials could adversely affect our results of operations. The inherent dangers and complexity of the Company s operations could subject it to substantial liability claims that could adversely affect our results of operations. We may not be able to successfully integrate future acquisitions, which will cause to fail to realize expected returns. Labor disputes and increasing labor costs could have a material adverse effect on our business. The inability to hire and retain qualified employees may hinder our growth. Significant competition in the industries in which the Company operates may result in its competitors offering new or better products and services or lower prices, which could result in a loss of customers and a decrease in revenues. Disruption of our manufacturing operations or management information systems would have an adverse effect or our financial condition and results of operations. The Company has foreign operations that would be adversely impacted in the event of war, political disruption, civil disturbance, economic and legal sanctions and changes in global trade policies. Results of operations could be adversely affected by actions under U.S. trade laws. The Company is subject to currency exchange rate risk, which could adversely affect its results of operations. The Company s common stock has experienced, and may continue to experience, price volatility.

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