927417--3/14/2007--POLYMER_GROUP_INC

related topics
{debt, indebtedness, cash}
{product, market, service}
{cost, regulation, environmental}
{cost, operation, labor}
{product, liability, claim}
{property, intellectual, protect}
{operation, international, foreign}
{tax, income, asset}
{personnel, key, retain}
{customer, product, revenue}
Risks Related to the Company s Business The Company s substantial indebtedness could harm its ability to react to changes in business or market developments and prevent the Company from fulfilling its obligations under its indebtedness. The Company s variable rate indebtedness subjects the Company to interest rate risk, which could cause its debt service obligations to increase significantly. To service its indebtedness and fund its capital expenditures the Company will require a significant amount of cash. The Company s ability to generate cash depends on many factors beyond its control. Non-compliance with covenants contained in the Credit Facility, without waiver or amendment from the lenders of the Credit Facility, could adversely affect our ability to borrow under the Credit Facility. Because a significant number of its employees are represented by labor unions or trade councils and work under collective bargaining agreements, any employee slowdown or strikes or the failure to renew its collective bargaining agreements could disrupt the Company s business. The Company generates most of its revenue from the sale of manufactured products that are used in a wide variety of consumer and industrial applications and the potential for product liability exposure could be significant. The Company s international operations pose risks to its business that are not present with its domestic operations. The Company could incur substantial costs to comply with environmental laws, and violations of such laws may increase costs or require the Company to change certain business practices. If the Company is unable to adequately protect its intellectual property, the Company could lose a significant competitive advantage. Due to the unique products that the Company produces and the particular industry in which the Company operates, the loss of its senior management could disrupt its business. Risks Related to the Company s Industries Because the specialized markets in which the Company sells its products are highly competitive, the Company may have difficulty growing its business year after year. The Company must continue to invest significant resources in developing innovative products in order to maintain a competitive edge in the highly specialized markets in which the Company operates. The loss of only a few of the Company s large volume customers could reduce its revenues and profits. Increases in prices for raw materials or the unavailability of raw materials could reduce the Company s profit margins. In response to changing market conditions the Company may decide to restructure certain of its operations resulting in additional cash restructuring charges and asset impairment charges

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