817366--2/27/2009--VCA_ANTECH

related topics

{debt, indebtedness, cash}

{system, service, information}

{condition, economic, financial}

{regulation, government, change}

{cost, operation, labor}

{tax, income, asset}

{loss, insurance, financial}

{product, market, service}

Changes in the demand for our products and services could negatively affect our operating results. General economic conditions may continue to cause a decline in business and have a material adverse effect on our revenue and profitability. Due to the fixed cost nature of our business, fluctuations in our revenue could adversely affect our gross profit, operating income and margins. Any failure in our information technology systems, disruption in our transportation network or failure to receive supplies could significantly increase testing turn-around time, reduce our production capacity and otherwise disrupt our operations. Difficulties integrating new acquisitions may impose substantial costs and cause other problems for us. The significant competition in the companion animal healthcare industry could result in a decrease in our prices, an increase in our acquisition costs, a loss of market share and could materially affect our revenue and profitability. The carrying value of our goodwill and other intangible assets could be subject to an impairment write-down. We require a significant amount of cash to service our debt and expand our business as planned. Our failure to satisfy covenants in our debt instruments will cause a default under those instruments. Our debt instruments may adversely affect our ability to run our business. Any failure by the manufacturers of our medical imaging equipment, failure in our ability to develop functional and cost-effective software for our products, or any product malfunctions could result in a decline in customer purchases and a reduction in our revenue, demand and profitability. Our use of self-insurance, self-insured retention and high-deductible insurance programs to cover certain claims for losses suffered and costs or expenses incurred could negatively impact our business upon the occurrence of an uninsured and/or significant event. We may experience difficulties hiring skilled veterinarians due to shortages that could disrupt our business. If we fail to comply with governmental regulations applicable to our business, various governmental agencies may impose fines, institute litigation or preclude us from operating in certain states. We may have to write-off certain capitalized software development costs.

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817366--2/27/2009--VCA_ANTECH_INC