825692--3/16/2006--CARAUSTAR_INDUSTRIES

related topics

{condition, economic, financial}

{cost, regulation, environmental}

{acquisition, growth, future}

{cost, operation, labor}

{system, service, information}

{regulation, change, law}

{debt, indebtedness, cash}

{gas, price, oil}

Our business and financial performance may be harmed by future increases in raw material and other operating costs. Our operating margins and cash flow may be adversely affected by rising energy costs. Our business and financial performance may be adversely affected by downturns in industrial production, housing and construction and the consumption of nondurable and durable goods. We are adversely affected by the cycles, conditions and problems inherent in our industry. Our business may suffer from risks associated with growth and acquisitions. If we cannot raise the necessary capital for, or use our stock to finance, acquisitions, expansion plans or other significant corporate opportunities, our growth may be impaired. Our substantial indebtedness could adversely affect our cash flow and our ability to fulfill our obligations under our indebtedness. We are subject to many environmental laws and regulations that require significant expenditures for compliance and remediation efforts, and changes in the law could increase those expenses and adversely affect our operations. Our industry is highly competitive and price fluctuations and volatility could diminish our sales volume and revenues. We have incurred and may incur additional material restructuring charges in the future, and we may not be successful in achieving the cost reductions contemplated by our recent and future restructuring activities. Significant disruptions to our operations may materially and adversely affect our earnings. Our business is subject to changing regulation of corporate governance and public disclosure that have increased both our costs and the risk of noncompliance. The failure to effectively modernize and implement our information systems will adversely affect our operations, and the failure to complete the transition to our new information infrastructure could adversely affect our business.

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825692--3/16/2006--CARAUSTAR_INDUSTRIES_INC