748270--6/14/2006--MEDICAL_ACTION_INDUSTRIES

related topics

{regulation, change, law}

{system, service, information}

{provision, law, control}

{stock, price, operating}

{customer, product, revenue}

{operation, natural, condition}

{personnel, key, retain}

{product, market, service}

{tax, income, asset}

{product, liability, claim}

{acquisition, growth, future}

The Company may be unable to successfully manage growth, particularly if accomplished through acquisitions. In addition to the above risks, future acquisitions may result in the dilution of earnings and the amortization or write-off of goodwill and intangible assets, any of which could have a material adverse affect on our business, financial condition or results of operations. The Company s business is subject to the risks of international procurement. War, terrorism or public health issues could disrupt supply, delivery or demand of products which could negatively affect the Company s obligations and performance. Future operating results are dependent upon the Company s ability to obtain a sufficient supply of raw materials, some of which are available only from limited sources - volatility of resin cost. The cost of designing, implementing and staffing an effective corporate governance program to meet current and proposed regulations could affect the Company s future operating results. The corporate governance programs at the Company anticipated much of what is included in the Sarbanes-Oxley Act of 2002 ( Sarbanes-Oxley ). We had standards in place for dealing with issues of compliance training, board The market price of the Company s common stock has been, and may continue to be volatile. The market price of the Company s common stock has been, and may continue to be, highly volatile for various reasons, including the following: additions or departures of key personnel; and The Company quarterly revenue and operating results may fluctuate for a variety of reasons. The Company s profit margins vary among its products and its distribution channels. As a result, the overall profitability of the Company in any given period will depend, in part, on the product, geographic, and channel mix reflected in that period s net sales. The Company s success depends largely on its ability to attract and retain key personnel. Failure of the Company s information technology systems could adversely affect the Company s future operating results. Information technology system failures could disrupt the Company s ability to function in the normal course of business by potentially causing delays or cancellation of customer orders, impeding the manufacture or shipment of products, or resulting in the unintentional disclosure of customer or Company information. Management has taken steps to address these concerns by its implementation of internal control measures. However, there can be no assurance that a system failure or data security breach will not have a material adverse affect on the Company s results of operations. could be significantly increased and have a material effect on the Company s business and financial condition. Changes in accounting rules could adversely affect the Company s future operating results. Financial statements are prepared in accordance with U.S. generally accepted accounting principles. These principles are subject to interpretation by various governing bodies, including the Financial Accounting Standards Board ( FASB ) and the SEC, who interpret and create appropriate accounting regulations. A change from current accounting regulations can have a significant affect on the Company s results of operations and could impact the manner in which the Company conducts business. Unanticipated changes in the Company s tax rates could affect its future results. The high level of competition and buying groups place pressure on our profit margins and we may not be able to compete successfully. The disposable medical device segment of the healthcare industry in which we operate is highly competitive and is experiencing both horizontal and vertical consolidation. All of the products which we sell are available from sources other than us. The high level of competition in our industry places pressure on profit margins. Some of our competitors have greater resources than we have. These competitive pressures could have a material adverse affect on our business, financial condition or results of operations. The Company s products may be subject to recall or product liability claims. A significant adverse change in, or failure to comply with, governing regulations could adversely affect the Company s business. Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States. The Company is dependent on manufacturing and logistic services provided by third-parties and related risks. Anti-Takeover provisions of our charter documents and Delaware law could prevent or delay transactions resulting in a change of control. Provisions of our certificate of incorporation and bylaws and applicable provisions of Delaware law may make it more difficult for or prevent a third party from acquiring control of us without the approval of our board of directors. These provisions: set limitations on the removal of directors; If a natural or man-made disaster strikes our manufacturing facilities, we may be unable to manufacture our products for a substantial amount of time, which may adversely affect our expected results of operations.

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748270--6/14/2006--MEDICAL_ACTION_INDUSTRIES_INC