835011--9/3/2010--MGP_INGREDIENTS

related topics

{gas, price, oil}

{cost, contract, operation}

{customer, product, revenue}

{debt, indebtedness, cash}

{competitive, industry, competition}

{acquisition, growth, future}

{cost, operation, labor}

{cost, regulation, environmental}

{personnel, key, retain}

{stock, price, share}

{provision, law, control}

{tax, income, asset}

RISKS THAT AFFECT OUR BUSINESS AS A WHOLE An interruption of operations at our Atchison facility could negatively affect our business. Our profitability is affected by the cost of natural gas and of grain and flour that we use in our business, the availability and cost of which are subject to weather and other factors beyond our control. Our hedging strategy may not protect us from changes in prices of commodities and natural gas or translate to a competitive advantage in the marketplace. If ICP incurs losses, it could result in closure of its Pekin plant. This could result in increased costs and impairment losses for us. We have incurred impairment and restructuring losses in the past and may suffer such losses in the future The markets for our products are very competitive, and our results could be adversely affected if we do not compete effectively. If we lose certain key personnel, we may not be successful. Covenants and other provisions in our credit facility could hinder our ability to operate. Our failure to comply with covenants in our credit facility could result in the acceleration of the debt extended under such facility, limit our liquidity and trigger other rights. We may require significant cash flow to make needed capital expenditures, and our ability to make such expenditures could be limited. We are subject to extensive regulation, and compliance with existing or future laws and regulations, including those relating to greenhouse gases and climate change, may require us to incur substantial expenditures or require us to make product recalls. RISKS SPECIFIC TO OUR DISTILLERY PRODUCTS SEGMENT Volatile corn prices affect our profitability. The relationship between the price we pay for corn and the sales prices of our distillery co-products can fluctuate significantly and affect our results of operations. Although we have reduced our own production of fuel grade alcohol, we continue to have some exposure to fuel grade alcohol market price fluctuations through our ICP joint venture RISKS SPECIFIC TO OUR INGREDIENT SOLUTIONS SEGMENT The contracted production of our Wheatex product ends in August 2012, and our continued production and sales of this product depend on extending the contract or finding an economical production alternative. RISKS SPECIFIC TO OUR OTHER SEGMENT Our plant-based biopolymers and wood-based composite resins may not prove to be profitable or commercially scalable. Common stockholders have limited rights under our Articles of Incorporation The trading volume in our common stock fluctuates, and depending on market conditions, the sale of a substantial number of shares in the public market could depress the price of our stock and make it difficult for stockholders to sell their shares.

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835011--9/3/2010--MGP_INGREDIENTS_INC