919443--3/7/2008--LACROSSE_FOOTWEAR

related topics

{customer, product, revenue}

{product, market, service}

{operation, natural, condition}

{property, intellectual, protect}

{personnel, key, retain}

{operation, international, foreign}

{debt, indebtedness, cash}

{provision, law, control}

{cost, regulation, environmental}

If we do not accurately forecast consumer demand, we may have excess inventory to liquidate or have greater difficulty filling our customers orders, either of which could adversely affect our business. The continued consolidation of domestic retailers, and their capital requirements to fund growth, increases and concentrates our credit risk. Because we depend on third party manufacturers, we face challenges in maintaining a timely supply of goods to meet sales demand, and we may experience delay or interruptions in our supply chain. Any shortfall or delay in the supply of our products may decrease our sales and have an adverse impact on our customer relationships. Failure to efficiently import foreign sourced products could result in decreased margins, cancelled orders and unanticipated inventory accumulation. Labor disruptions or disruptions due to natural disasters or casualty losses at one of our three distribution facilities or our domestic manufacturing facility could have a material adverse effect on our operations. Our financial success may be limited by the strength of our relationships with our retail customers and by the success of such retail customers. We face significant competition and if we are unable to compete effectively, sales of our products may decline and our business could be harmed. We may be unable to meet changing consumer preferences and demands. Changes in the price or availability of raw materials could disrupt our operations and adversely affect our financial results Also, our product costs are subject to risks associated with foreign currency fluctuations (particularly with respect to the Euro and Chinese Renminbi), oil price increases and higher foreign labor costs. If we are unable to increase our selling prices to offset such product cost increases, our revenues and earnings would be negatively impacted. Our failure or inability to protect our intellectual property could significantly harm our competitive position and reduce future revenues. We depend on a limited number of suppliers for key production materials, and any disruption in the supply of such materials could interrupt product manufacturing and increase product costs. In order to be successful, we must retain and motivate key employees, and the failure to do so could have an adverse impact on our business. If we fail to comply with the covenants contained in our revolving credit facility we may be unable to secure additional financing and repayment obligations on our outstanding indebtedness may be accelerated. Our articles of incorporation, bylaws and Wisconsin corporate law each contain provisions that could delay, defer or prevent a change in control of our company or changes in our management.

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919443--3/7/2008--LACROSSE_FOOTWEAR_INC