9984--2/24/2009--BARNES_GROUP

related topics

{cost, contract, operation}

{competitive, industry, competition}

{condition, economic, financial}

{cost, operation, labor}

{cost, regulation, environmental}

{acquisition, growth, future}

{tax, income, asset}

{customer, product, revenue}

{operation, international, foreign}

{debt, indebtedness, cash}

{regulation, government, change}

{product, market, service}

{operation, natural, condition}

{personnel, key, retain}

{product, liability, claim}

{gas, price, oil}

RISKS RELATED TO OUR BUSINESS We depend on revenues and earnings from a small number of significant customers. Any bankruptcy of or loss, cancellation, reduction or delay in purchases by these customers could harm our business. We have significant indebtedness that could affect our operations and financial condition. Our failure to meet certain financial covenants required by our debt agreements may materially and adversely affect our assets, financial position and cash flows. Our operations depend on our manufacturing, distribution, sales and service facilities in various parts of the world which are subject to physical, financial, regulatory and other risks that could disrupt our operations. The global nature of our business exposes us to foreign currency fluctuations that may affect our future revenues and profitability. Our operations and assets subject us to additional financial and regulatory risks. Our ability to recover our significant deferred tax assets related to tax operating loss carryforwards depends on future income. Changes in the availability or price of materials, products and energy resources could adversely affect our costs and profitability. We maintain pension and other postretirement benefit plans in the U.S. and certain international locations. We have significant goodwill and an impairment of our goodwill could cause a decline in our net worth. We could be adversely affected by changes in interest rates. We may not realize all of the sales expected from our existing backlog or anticipated orders. We may not recover all of our up-front costs related to new or existing programs. We may not recover all of our up-front costs related to RSPs. We face risks of cost overruns and losses on fixed-price contracts. The departure of existing management and key personnel, a shortage of skilled employees or a lack of qualified sales professionals could materially affect our business, operations and prospects. Any product liability claims in excess of insurance may adversely affect our financial condition. Our business, financial condition, results of operations and cash flows could be adversely impacted by strikes or work stoppages. RISKS RELATED TO THE INDUSTRIES IN WHICH WE OPERATE A general economic downturn could adversely affect our business and financial results. We operate in very competitive markets. We may not be able to compete effectively with our competitors, and competitive pressures could adversely affect our business, financial condition and results of operations. Our customers businesses are generally cyclical. Weaknesses in the industries in which our customers operate could impact our revenues and profitability. Original equipment manufacturers in the transportation and aerospace industries have significant pricing leverage over suppliers and may be able to achieve price reductions over time. Demand for our defense-related products depends on government spending. The consolidation occurring in the industries in which we operate could adversely affect our business and financial results. The aerospace industry is highly regulated. Complications related to aerospace regulations may adversely affect the Company. Environmental regulations impose costs and regulatory requirements on our operations. Environmental compliance may be more costly than we expect, and we may be subject to material environmental-based claims in the future. High fuel prices may impact our operating results. Products and services of the mature industries in which we operate may be rendered obsolete by new products, technologies and processes. We may not be able to effectively integrate acquired companies into our operations. We may not be able to realize the anticipated cost savings, synergies or revenue enhancements from acquisitions, and we may incur significant costs to achieve these savings. Future acquisitions and strategic alliances are a key component of our anticipated growth. We may not be able to identify or complete future acquisitions or strategic alliances. Turmoil in the equity and credit markets may limit our ability to undertake acquisitions.

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9984--2/24/2009--BARNES_GROUP_INC