99359--6/28/2010--BREEZE-EASTERN

related topics

{regulation, government, change}

{customer, product, revenue}

{cost, operation, labor}

{stock, price, share}

{condition, economic, financial}

{operation, international, foreign}

{control, financial, internal}

{tax, income, asset}

{debt, indebtedness, cash}

{loss, insurance, financial}

{cost, regulation, environmental}

{property, intellectual, protect}

{personnel, key, retain}

{competitive, industry, competition}

{product, liability, claim}

As a U.S. Government contractor, we are subject to a number of procurement rules and regulations and any non-compliance could subject us to fines, penalties or debarment. The U. S. Government has the right to terminate or not renew any contract with us at any time and without notice. Any such action would have a material adverse effect on our results of operations. Our business could be adversely affected by a negative audit by the U.S. Government. Cancellations, reductions, or delays in customer orders may adversely affect our results of operations. Our backlog is subject to reduction and cancellation at any time without notice, which could negatively impact our revenues and results of operations. The aircraft manufacturing industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer. We are subject to competition from entities which could have a substantial impact on our business. Our potential tax benefits from net operating loss carry forwards are subject to a number of risks. We are subject to liability under environmental laws. Our sales to foreign countries expose us to risks and adverse changes in local legal, tax, and regulatory schemes. Government regulations could limit our ability to sell our products outside the United States and otherwise adversely affect our business. While we believe our control systems are effective, there are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected. The terms of our credit agreement may restrict our current and future operating and financial flexibility. We are subject to financing and interest rate exposure risks that could adversely affect our business and operating results. We relocated to a new facility in Fiscal 2010. We depend on component availability, subcontractor performance, and key suppliers to manufacture and deliver our products and services. Our operating results and financial condition may be adversely impacted by the current worldwide economic conditions. Our future growth and continued success is dependent upon retaining key employees. Our profitability could be negatively affected if we fail to maintain satisfactory labor relations Our failure to adequately protect our intellectual property could have an adverse effect on our business. We use estimates when competing for contracts. Variances between actual and estimates could affect our profitability and overall financial position. Risks Related to our Common Stock Our common stock is thinly traded and subject to volatility.

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99359--6/28/2010--BREEZE-EASTERN_CORP