768158--3/29/2007--MICHAEL_FOODS_INC

related topics

{cost, regulation, environmental}

{property, intellectual, protect}

{customer, product, revenue}

{operation, natural, condition}

{competitive, industry, competition}

{product, liability, claim}

{gas, price, oil}

Our operating results are significantly affected by egg, potato and cheese market prices and the prices of other raw materials, such as grain, which can fluctuate widely. We produce and distribute food products that are susceptible to microbial contamination. As a result of selling food products, we face the risk of exposure to product liability claims. A decline in egg consumption or in the consumption of processed food products could have a material adverse effect on our net sales and results of operations. The categories of the food industry in which we operate are highly competitive, and our inability to compete successfully could adversely affect our business, prospects, results of operations and financial condition. Our largest customers have historically accounted for a significant portion of our net sales volume. Accordingly, our business may be adversely affected by the loss of, or reduced purchases by, one or more of our large customers. Patents and trademarks have historically been important to our business. The loss or expiration of a patent, whether licensed or owned, or the loss of any trademark could negatively impact our ability to produce and sell the products associated with such patent or trademark, which could have a material adverse effect on our sales volume and net income. Government regulation could increase our costs of production and increase our legal and regulatory expenses. We may incur unexpected costs associated with compliance with environmental regulations. Extreme weather conditions, disease (such as avian influenza) and pests could harm our business.

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768158--3/29/2007--MICHAEL_FOODS_INC_/MN