856710--6/27/2007--AMERICAN_COLOR_GRAPHICS

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{product, market, service}

{condition, economic, financial}

{personnel, key, retain}

{competitive, industry, competition}

In Fiscal Years 2007, 2006, 2005, and 2004, our earnings were insufficient to cover fixed charges. Our ability to make payments on our indebtedness, to refinance our existing indebtedness and to operate our business depends on our ability to generate significant amounts of cash in the future. Our ability to generate such significant amounts of cash depends on many factors beyond our control. The agreements and instruments governing our indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business. If we are unable to retain key management personnel, our business could be adversely affected. We are subject to competitive pressures. Because our business is sensitive to changes in paper prices, our business could be adversely affected if paper prices increase significantly and we are unable to pass through price increases to our customers. Demand for our services may decrease due to a decline in customers or an industry sector s financial condition or due to an economic downturn. If we do not keep pace with technological changes, we will not be able to maintain our competitive position. Our noncompliance with or liability for cleanup under environmental regulations or efforts to comply with changes to current environmental regulations could adversely affect our business.

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856710--6/27/2007--AMERICAN_COLOR_GRAPHICS_INC