84581--4/17/2006--ROCK_OF_AGES

related topics

{control, financial, internal}

{cost, operation, labor}

{stock, price, operating}

{product, market, service}

{regulation, government, change}

{acquisition, growth, future}

{provision, law, control}

{debt, indebtedness, cash}

{personnel, key, retain}

{property, intellectual, protect}

{operation, international, foreign}

{cost, regulation, environmental}

{condition, economic, financial}

{competitive, industry, competition}

{customer, product, revenue}

Risk Factors That May Affect Future Results Our continued growth depends, at least in part, on our ability to form relationships with funeral directors, cemeteries and other death care providers. The growth and profitability of our retail operations depends, at least in part, on our ability to successfully execute staff productivity improvements, sales and marketing initiatives, and new product programs. Our credit facility with CIT includes covenants that impose restrictions on our financial and business operations and financial tests that we must meet in order to continue to borrow under the facility. If we are unable to maintain our relationships with independent retailers, our sales may not continue to grow and could decline. Opening new stores is a component of our growth strategy and entails uncertainties and risks that could adversely affect our profitability. Our international operations may expose us to a number of risks related to conducting business in foreign countries. Employees' strikes and other labor-related disruptions may adversely affect our operations. If we lose our key personnel, or are unable to attract and retain additional qualified personnel, our business could suffer. We face intense competition and, if we are unable to compete successfully, we may be unable to increase our sales, which would adversely affect our business and profitability. The increasing trend toward cremation, and potential declines in memorialization for other reasons, may result in decreased sales of our products. Sales of our products are seasonal and may cause our quarterly operating results to fluctuate. Our competitive position could be harmed if we are unable to protect our intellectual property rights. Our business is subject to a number of operating risks that are difficult to predict and manage. Sales of our ancillary products are cyclical, which may adversely affect our operating results. No-Call Legislation may adversely affect our retail marketing efforts. If we or our independent registered public accounting firm are unable to affirm the effectiveness of our internal control over financial reporting in future years, the market value of our common stock could be adversely affected. We may need to improve our controls over the preparation, review, presentation and disclosure of our consolidated financial statements. Existing stockholders are able to exercise significant control over us. We may incur substantial costs to comply with government regulations. Provisions of our corporate organizational documents and Delaware law could delay or prevent a change in control of the Company, even if it would be beneficial to our stockholders.

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84581--4/17/2006--ROCK_OF_AGES_CORP