895565--3/30/2006--SYNAGRO_TECHNOLOGIES

related topics

{financial, litigation, operation}

{cost, regulation, environmental}

{cost, contract, operation}

{customer, product, revenue}

{cost, operation, labor}

{operation, natural, condition}

{tax, income, asset}

{property, intellectual, protect}

{regulation, change, law}

{personnel, key, retain}

{interest, director, officer}

{stock, price, share}

{regulation, government, change}

{acquisition, growth, future}

{product, market, service}

We are subject to extensive and increasingly strict federal, state and local environmental regulation and permitting, which could impose substantial costs on our operations or reduce our operational flexibility. We are affected by unusually adverse weather and winter conditions, which may adversely affect our revenues and operational results. Our ability to grow may be limited by direct or indirect competition with other businesses that provide some or all of the same services that we provide. If our long-term contracts are renewed on less attractive terms, or not renewed at all, or if we are unsuccessful in bidding on new long-term contracts, our operating results and financial condition would be adversely affected. If one or more of our customer contracts are terminated prior to the expiration of their term, and we are not able to replace revenues from the terminated contract or receive liquidated damages pursuant to the terms of the contract, the lost revenue would have a material and adverse effect on our business, financial condition and results of operations. If one or more of our new facilities is not completed as scheduled, and we are not able to replace revenues from the new facility, this could have a material and adverse effect on our financial performance and cash flow. A significant amount of our business comes from a limited number of customers and our revenue and profits could decrease significantly if we lost one or more of them as customers. If we were unable to obtain bonding required in connection with certain projects, we would be ineligible to bid on those projects. We could face personal injury, third-party or environmental claims or other damages resulting in substantial liability for which we are uninsured or inadequately insured and which could have a material adverse effect on our business, financial condition and results of operations. We are dependent on the availability and satisfactory performance of subcontractors for our design and build operations and the insufficiency and unavailability of and unsatisfactory performance by these unaffiliated third party contractors could have a material adverse effect on our business, financial condition and results of operations. Fluctuations in fuel costs could increase our operating expenses and negatively impact our net income. If we fail to properly estimate the cost of completing a project, and we cannot pass additional costs through to our customers, we may not generate sufficient revenue from the project to cover the operating costs of such project, which would adversely affect our net income. We are not able to guarantee that our estimated remaining contract value, which we call backlog, will result in actual revenues in any particular fiscal period. If we lose the pending lawsuits we are currently involved in, we could be liable for significant damages and legal expenses. We could face considerable business and financial risk in implementing our acquisition strategy. We are dependent on our senior management for their depth of industry experience and knowledge. Efforts by labor unions to organize our employees could divert management attention and increase our operating expenses. We may become subject to CERCLA or other federal or state cleanup laws, which could increase our costs of operations. Our intellectual property may be misappropriated or subject to claims of infringement. If we determine that our goodwill is impaired, we may have to write off all or part of it. We may be unable to meet changing laws, regulations and standards related to corporate governance and public disclosure. There is no assurance that we will continue declaring dividends or have the available cash to make dividend payments.

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895565--3/30/2006--SYNAGRO_TECHNOLOGIES_INC