Potential product liability claims relating to the products we manufacture

Our products are sold for use in a variety of activities, which are subject to inherent risks that could result in death, personal injury, property damage, pollution or loss of production and potential resultant liabilities of the Company. Actual or claimed defects in our products may give rise to claims against us for losses and expose us to claims for damages. We cannot assure that our insurance will be adequate or available to protect us in the event of a claim or that the coverage will not be canceled or otherwise terminated.

We may face risks associated with the implementation of our growth strategy

As part of our growth strategy, we may expand our existing facilities, build additional plants, acquire other businesses and steel assets, enter into joint ventures, or form strategic alliances that we believe will complement our existing business. These transactions will likely involve some or all of the following risks:

•       difficulty of competing for acquisitions and other growth opportunities with companies having materially greater financial resources

•       difficulty of integrating acquired operations and personnel into our existing business

•       potential disruption of our ongoing business and culture

•       diversion of resources

•       inability of management to maintain uniform standards, controls, procedures and policies

•       difficulties of managing the growth of a larger company

•       risk of entering markets in which we have limited experience

•       risk of becoming involved in labor, commercial or regulatory disputes or litigation related to new enterprise

•       risk of contractual or operational liability to our venture participants or to third parties as a result of our participation

•       inability to work efficiently with joint venture or strategic alliance partners

•       difficulties of terminating joint venture or strategic alliance arrangements

These transactions might be required for us to remain competitive, but we may not be able to complete any such transactions on favorable terms or obtain financing, if necessary, for such transactions on favorable terms. Future transactions may not improve our competitive position and business prospects as anticipated, and if they do not, our sales and earnings may be significantly reduced.

Environmental regulation imposes substantial costs and limitations on our operations

We are subject to the risk of substantial environmental liability and limitations on our operations brought about by the requirements of environmental laws and regulations. We are subject to various federal, state, provincial and local environmental, health and safety laws and regulations concerning such issues as air emissions, wastewater discharges, solid and hazardous materials and waste handling and disposal, and the investigation and remediation of contamination. These laws and regulations are increasingly stringent. While we believe that our facilities are and will continue to be in material compliance with all applicable environmental laws and regulations, the risks of substantial costs and liabilities related to compliance with such laws and regulations are an inherent part of our business. Although we are not currently involved in any material remediation activities, it is possible that future conditions may develop, or be discovered that create substantial environmental remediation liabilities and costs. For example, our steel-making operations produce certain waste products, such as electric arc furnace dust, which are classified as hazardous waste and must be properly disposed of under applicable environmental laws. These laws can impose clean up liability on generators of hazardous waste and other substances that are shipped off-site for disposal, regardless of fault or the legality of the disposal activities. Other laws may require us to investigate and remediate contamination at our properties, including contamination that was caused in whole or in part by third parties. While we believe that we can comply with environmental legislation and regulatory requirements and that the costs of doing so have been included within our budgeted cost estimates, it is possible that such compliance will prove to be more limiting and costly than anticipated.

In addition to potential clean up liability, we may become subject to substantial monetary fines and penalties for violation of applicable laws, regulations or administrative conditions. We may also be subject from time to time to legal proceedings brought by private parties or governmental agencies with respect to environmental matters, including matters involving alleged property damage or personal injury.

Our business requires substantial capital investment and maintenance expenditures, which we may be unable to provide

Our business strategy may require additional substantial capital investment. We require capital for acquiring new equipment, maintaining the condition of our existing equipment, completing future acquisitions and maintaining compliance with environmental laws and regulations. To the extent that cash generated internally and cash available under our credit facilities is not sufficient to fund capital requirements, we may require additional debt and/or equity financing. However, this type of financing may not be available or, if available, may not be on satisfactory terms. Future debt financing, if available, may result in increased interest and amortization expense, increased leverage and decreased income available to fund further acquisitions and expansion. In addition, future debt financing may limit our ability to withstand competitive pressures and render us more vulnerable to economic downturns. If we fail to generate or obtain sufficient additional capital in the future, we could be forced to reduce or delay capital expenditures and acquisitions, sell assets or restructure or refinance our indebtedness.

Variability in weather conditions may affect our production and sales

Variability in weather conditions may from time to time affect our production capabilities and the ability to sell our products to our customers. Our production facilities, from time to time, were required to curtail production as a result of weather related conditions, such as hurricanes. Additionally, weather conditions can affect our customers who drill for oil and natural gas as they may be prevented from entering or commencing drill sites. Therefore, unexpected weather conditions could have a negative impact on our sales, revenues, margin and profitability.