76954--9/28/2006--PEERLESS_MANUFACTURING

related topics

{cost, contract, operation}

{operation, international, foreign}

{capital, credit, financial}

{product, liability, claim}

{customer, product, revenue}

{operation, natural, condition}

{personnel, key, retain}

{control, financial, internal}

{stock, price, share}

{debt, indebtedness, cash}

{stock, price, operating}

{product, market, service}

If actual costs for our projects with fixed-price contracts exceed our original estimates, our profits will be reduced or we may suffer losses. Customers may cancel or delay projects. As a result our backlog may not be indicative of our future revenue. Our ability to conduct business outside the United States may be adversely affected by factors outside of our control and our revenues and profits from international sales could be adversely impacted. Our financial performance may vary significantly from period to period, making it difficult to estimate future revenue. Our margins are affected by shifts in our product mix. Our products are covered by warranties. Unanticipated warranty costs for defective products could adversely affect our financial condition and results of operations and reputation. Product liability claims not covered by insurance could adversely affect our financial condition and results of operations. A significant portion of our accounts receivable are related to large contracts, which increases our exposure to credit risk. Changes in billing terms can increase our exposure to working capital and credit risk. The terms and conditions of our credit facility impose restrictions on our operations, including restrictions on our ability to raise additional capital, if needed. Our business is subject to risks of terrorist acts, acts of war and natural disasters. The inability of our engineering and/or manufacturing operations to sufficiently scale up operations in the short term, in response to unexpected spikes in orders with short cycle times, directly impacts our ability to optimize absorption of our manufacturing overhead expense. Our ability to operate effectively could be impaired if we fail to attract and retain key personnel. Our customers may require us to perform portions of our projects in their local countries. The relocation of our administrative, research development, manufacturing and storage operations in Dallas, Texas could result in a negative impact on the Company s financial performance. We will be exposed to risks relating to evaluation of our internal controls over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002. Our common stock is thinly traded, which may make it difficult to sell our common stock and may make our stock price more volatile.

Full 10-K form ▸

76954--9/28/2006--PEERLESS_MANUFACTURING_CO