716314--6/2/2009--GRAHAM

related topics

{operation, international, foreign}

{product, market, service}

{customer, product, revenue}

{property, intellectual, protect}

{provision, law, control}

{gas, price, oil}

{personnel, key, retain}

{condition, economic, financial}

{financial, litigation, operation}

{cost, regulation, environmental}

{stock, price, share}

{competitive, industry, competition}

We serve markets that are capital intensive. The recent volatility and disruption of the capital and credit markets and adverse changes in the global economy may negatively impact our operating results. Such volatility and disruption may also negatively impact our ability to access additional financing. The larger markets we serve are the petroleum refining and petrochemical industries which are both cyclical in nature and dependent on the price of oil. As a result, volatility in the price of crude oil may negatively impact our operating results. Our international sales operations are subject to uncertainties that could harm our business. A large percentage of our sales are in non-U.S. jurisdictions. As a result, we are subject to the economic, political, regulatory and other risks of international operations. We are subject to foreign currency fluctuations which may adversely affect our operating results. If we fail to introduce enhancements to our existing products or to keep abreast of technological changes in our markets, our business and results of operations could be adversely affected. The loss of any member of our executive management team and our inability to make up for such loss with a qualified replacement could harm our business. Our business is highly competitive. If we are unable to successfully implement our business strategy, we risk losing market share to current and future competitors. If we are unable to make necessary capital investments or respond to pricing pressures, our business may be harmed. If third parties infringe our intellectual property or if we were to infringe the intellectual property of third parties, we may expend significant resources enforcing or defending our rights or suffer competitive injury. We are subject to contract cancellations and delays by our customers, which may adversely affect our operating results. A decrease in supply or increase in cost of the materials used in our products could harm our profitability. If we are unable to effectively outsource a portion of our production during times when we are experiencing strong demand, our results of operations might be adversely affected. In addition, outsourcing may negatively affect our profit margins. We face potential liability from asbestos exposure and similar claims. Risks related to operating a subsidiary in China The operations of our Chinese subsidiary may be adversely affected by China s evolving economic, political and social conditions. Intellectual property rights are difficult to enforce in China. Uncertainties with respect to the Chinese legal system may adversely affect the operations of our Chinese subsidiary. Risks related to the ownership of our common stock Provisions contained in our certificate of incorporation, bylaws and our stockholder rights plan could impair or delay stockholders ability to change our management and could discourage takeover transactions that our stockholders might consider to be in their best interests.

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716314--6/2/2009--GRAHAM_CORP