739878--3/30/2007--RUSS_BERRIE_&_CO

related topics

{product, market, service}

{debt, indebtedness, cash}

{stock, price, operating}

{customer, product, revenue}

{regulation, change, law}

{operation, international, foreign}

{property, intellectual, protect}

{product, liability, claim}

{regulation, government, change}

{system, service, information}

{provision, law, control}

{personnel, key, retain}

{loss, insurance, financial}

{acquisition, growth, future}

Our net sales and profitability depend on our ability to continue to conceive, design and market products that appeal to consumers. Increased consolidation and a declining number of independent retail outlets may have a continued negative impact on sales. The success of our gift segment will depend largely on the continued success of our Profit Improvement Program. Gross margin could be adversely affected by several factors. Changes in consumer preferences could adversely affect our net sales and profitability. Competition in our markets could reduce our net sales and profitability. Our debt covenants may affect our liquidity or limit our ability to complete acquisitions, incur debt, make investments, sell assets, merge or complete other significant transactions. Inability to maintain compliance with the bank covenants. Our cash flows and capital resources may be insufficient to make required payments on our indebtedness. Our cash flows and capital resources may be insufficient to make the required payments on the Kids Line Earnout Consideration. If we lose key personnel we may not be able to achieve our objectives. Our infant and juvenile business is dependent on several large customers. We may not be able to collect outstanding accounts receivable from our major retail customers. Disruptions in our current information technology system or difficulties in implementing an alternative global information technology system could harm our business. We rely on foreign suppliers, primarily in the PRC, to manufacture most of our products, which subjects us to numerous international business risks that could increase our costs or disrupt the supply of our products. Currency exchange rate fluctuations could increase our expenses. Product liability, product recalls and other claims relating to the use of our products could increase our costs. Competition for licenses could increase our licensing costs or limit our ability to market products. Trademark infringement or other intellectual property claims relating to our products could increase our costs. We may experience difficulties in integrating strategic acquisitions. Sales of our gift segment products are seasonal, which causes our operating results to vary from quarter to quarter. The trading price of our common stock has been volatile and investors in our common stock may experience substantial losses. A limited number of our shareholders can exert significant influence over us. Various restrictions in our charter documents, policies, New Jersey law and our 2006 Credit Agreements could prevent or delay a change in control of us which is not supported by our board of directors. Changes in our effective tax rate may have an adverse effect on our results of operations. Actual results differing from estimates. Increased costs associated with corporate governance compliance may affect our results of operations.

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739878--3/30/2007--RUSS_BERRIE_&_CO_INC