795403--3/1/2007--WATTS_WATER_TECHNOLOGIES

related topics

{cost, operation, labor}

{product, liability, claim}

{operation, international, foreign}

{stock, price, operating}

{customer, product, revenue}

{stock, price, share}

{condition, economic, financial}

{property, intellectual, protect}

{cost, regulation, environmental}

{tax, income, asset}

{debt, indebtedness, cash}

{product, market, service}

We face intense competition and, if we are not able to respond to competition in our markets, our revenues may decrease. Reductions or interruptions in the supply of raw materials and increases in the costs of raw materials could reduce our profit margins and adversely affect our ability to meet our customer delivery commitments. Implementation of our acquisition strategy may not be successful, which could affect our ability to increase our revenues or our profitability. We are subject to risks related to product defects, which could result in product recalls and could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated due to the unenforceability of liability limitations. We face risks from product liability and other lawsuits, which may adversely affect our business. Down economic cycles, particularly reduced levels of residential and non-residential starts and remodeling, could have an adverse effect on our revenues and operating results. Economic and other risks associated with international sales and operations could adversely affect our business and future operating results. Fluctuations in foreign exchange rates could materially affect our reported results. There are risks in expanding our manufacturing operations and acquiring companies in China. If we cannot continue operating our manufacturing facilities at current or higher utilization levels, our results of operations could be adversely affected. If we experience delays in introducing new products or if our existing or new products do not achieve or maintain market acceptance and regulatory approvals, our revenues and our profitability may decrease. Environmental compliance costs and liabilities could increase our expenses or reduce our profitability. Third parties may infringe our intellectual property and we may expend resources enforcing our rights or suffer competitive injury. The requirements of Financial Accounting Standards Board Statement No. 142, Goodwill and Other Intangible Assets (FAS 142) may result in a write-off of all or a portion of our goodwill, which would negatively affect our operating results and financial condition. The loss of a major customer could have an adverse effect on our results of operations. Certain indebtedness may limit our ability to pay dividends, incur additional debt and make acquisitions and other investments. One of our stockholders can exercise substantial influence over our Company. Conversion and sale of a significant number of shares of our Class B common stock could adversely affect the market price of our Class A common stock. Our Class A common stock has insignificant voting power.

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795403--3/1/2007--WATTS_WATER_TECHNOLOGIES_INC