6571--4/13/2006--ANGELICA_CORP

related topics

{cost, contract, operation}

{cost, regulation, environmental}

{acquisition, growth, future}

{loss, insurance, financial}

{regulation, government, change}

{operation, natural, condition}

{cost, operation, labor}

{financial, litigation, operation}

{tax, income, asset}

{control, financial, internal}

{debt, indebtedness, cash}

{investment, property, distribution}

{system, service, information}

{gas, price, oil}

{stock, price, operating}

{stock, price, share}

{personnel, key, retain}

{competitive, industry, competition}

{condition, economic, financial}

{product, market, service}

Our acquisition strategy involves risks relating to integrating acquired businesses. A key component of our growth strategy relies on our ability to continue to identify and acquire suitable acquisition candidates. To the extent we are unable to continue to identify and acquire such candidates, our growth will slow. Our contracts may not contain energy surcharge clauses sufficient to cover energy cost increases. If we are not able to recoup some or all of the utility cost increases we may experience, our results of operations may suffer. The length and pricing terms of our customer contracts may constrain our ability to recover inflationary costs and to make a profit. We face considerable pricing pressures from our customers, particularly from large national, regional or local healthcare organizations and group purchasing organizations. If we are not able to maintain or improve our operating margins due to these pressures or otherwise, our results of operations may be harmed. We are primarily self-insured with respect to health insurance and workers compensation. If our reserves for health insurance and workers compensation claims and other expenses are inadequate, we may incur additional charges if the actual costs of these claims exceed the amounts estimated. Our business requires significant, periodic capital investment in facilities, machinery and other equipment; however, because our future capital needs are uncertain, we may need to raise additional funds in the future, and such funds may not be available on acceptable terms or at all. Our operating costs may increase or work stoppages may occur if we are unable to reach initial or renewal collective bargaining agreements with the unions representing our employees. An insurance company with which we have previously done business is in financial distress. If our insurer does not fulfill their obligations, we may experience significant losses. If we fail to maintain an effective system of internal control or discover material weaknesses in our internal control over financial reporting, we may not be able to report our financial results accurately or detect fraud, which may harm our business and the trading price of our stock. Our credit facilities require that we meet specified levels of financial performance. In the event we fail either to meet these requirements or have them waived, we may be subject to penalties and we may be forced to seek additional financing. A significant portion of our revenues is derived from operations in a limited number of markets. Recessions, spikes in costs or natural disasters in these markets may harm our operations. Any increase in the cost of linens and textiles which is not recovered may affect our operating results. We may face risks resulting from purchasing linens and other textiles from international sources. A decrease in the price of natural gas below the fixed prices we have contracted for may negatively affect our operating results. An increase in interest rates may negatively impact our operating results. If we are unable to reduce costs as a result of implementing best practice initiatives company-wide, we will not recover the consulting expenses incurred as part of this implementation. We are dependent on the proper functioning and availability of our information systems, many of which we are currently upgrading. We face intense competition in our business. If we fail to compete effectively, we may miss new business opportunities or lose existing clients and our revenues and profitability may decline. We are subject to numerous federal, state, and local regulatory requirements involving employees, including those covering employment, wage and hour and occupational health and safety issues. Any changes to existing regulations or new laws may result in significant, unanticipated costs. Environmental issues, whether arising from our current operations or from the facilities we have recently acquired, or may in the future acquire, may subject us to significant liability and limit our ability to grow. We may be exposed to employment-related claims and costs that could harm our business, financial condition, or results of operations. If we are not able to hire and retain qualified employees, our ability to service our existing customers and retain new customers will be adversely affected. Ineffective management could cause our business, results of operations and financial condition to suffer. If our goodwill and other intangible assets become impaired, we will be required to write down their carrying value and incur a charge against income. We have contingent liabilities on guarantees of leases for some of our former retail store locations. We also have received an unsecured junior subordinated promissory note from the acquiring company of our retail business. We may be subject to costly and time-consuming product liability or personal injury actions that would materially harm our business. One of the locations of our laundry facilities is subject to a pending condemnation action in conjunction with an eminent domain situation. If a number of facilities were subject to this type of action, our ability to continue operations could be interrupted. Our customer base is concentrated in the healthcare industry and our strategy partially depends on a trend of healthcare providers to outsource non-core services, such as linen management services. If the healthcare industry suffers a downturn or the trend toward outsourcing reverses, our growth may be hindered. Our business is dependent on the healthcare industry and will decline if the demand for healthcare services declines. A small number of existing shareholders have considerable control over our company, which may lead to conflicts with other shareholders over corporate governance. A declining stock market and lower interest rates negatively affect the value of our defined benefit pension assets and the defined benefit pension assets of the union-sponsored multi-employer plans to which we contribute and may harm our financial position. While we have paid dividends regularly in the past, we may not be able to continue to pay dividends at the same level or at all in the future. If we fail to pay quarterly dividends to our common stockholders, the market price of our shares of common stock may decline.

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6571--4/13/2006--ANGELICA_CORP_/NEW/