Our stock price may be volatile and could decline substantially

Our stock price may decline substantially as a result of the volatile nature of the stock market and other factors beyond our control. The stock market has, from time to time, experienced extreme price and volume fluctuations. Many factors may cause the market price for our common stock to decline, including:

•       our operating results failing to meet the expectations of securities analysts or investors in any quarter

•       downward revisions in securities analysts’ estimates

•       consolidation by other competitors in the industry

•       material announcements by us or our competitors

•       market perceptions concerning the steel cycle and our future earnings prospects

•       public sales of a substantial number of shares of our common stock

•       governmental regulatory action

•       adverse changes in general market conditions or economic trends

We may not continue to pay cash dividends in the future

We cannot assure that we will continue to pay cash dividends or if we do, that we will do so at the current rate. We may elect at any time to retain all future earnings for use in the operation of our business and to fund future growth. Any future cash dividends will depend upon our results of operations, financial condition, cash requirements, the availability of a surplus and other factors.

Our revolving credit facility contains restrictive covenants that could limit our ability to operate our business in the most efficient manner

Restrictive covenants in our revolving credit facility may place us at a competitive disadvantage in relation to our competitors and failure to comply with these covenants could require us to repay our borrowings before their due dates or limit our borrowing under the facility. These restrictive covenants, among other things, limit our ability to:

•       incur additional indebtedness

•       make investments, including capital expenditures

•       create liens

•       engage in transactions with affiliates

•       dispose of assets

•       issue or sell stock of our subsidiaries

•       pay dividends or distribution

•       engage in mergers, consolidations and transfers of substantially all of our assets

If we fail to successfully integrate the operations of NSG, the combined company may not realize the potential benefits of the acquisition

The integration of NSG may disrupt our operations and may not be completed in an efficient manner. If this integration effort is not successful, our results of operations could be negatively impacted. We expect to utilize common information and communication systems, operating procedures, financial controls and human resources practices. We may encounter the following difficulties, costs, and delays involved in the continued integration of these operations, any of which could negatively impact our business and negatively impact our results of operations and financial conditions:

•       failure to successfully manage relationships with customers, partners and vendors

•       difficulties in successfully integrating the management, sales force and employees of NSG

•       challenges encountered in managing additional geographically dispersed operations

•       loss of key management personnel and employees

•       diversion of the attention of management from other primary business matters

If we have to write-off a significant amount of goodwill and other intangible assets, our earnings will be negatively affected

We have recorded goodwill and other intangible assets for our acquisition of NSG. Current accounting standards require at least an annual review of goodwill for impairment. If circumstances indicate that the carrying amount will not be recoverable, a non-cash charge will be recorded. Events and conditions that could result in impairment include increased competition or loss of market share, product innovation or obsolescence, or product claims that result in a significant loss of sales or profitability over the product life. A significant write-off of goodwill or intangible assets will negatively affect our operating income.

We have indebtedness and debt service requirements which limits our financial and operating flexibility

Our indebtedness could limit our financial and operating flexibility by the following:

•       make it more difficult to satisfy our obligations with respect to our debt, including our various notes

•       limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes

•       require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, reducing our ability to use these funds for other purposes

•       limit our ability to adjust rapidly to changing market conditions

•       increase our vulnerability to downturns in general economic conditions or in our business

Our ability to satisfy our obligations will depend upon our future operating performance which, in turn, will depend upon the successful implementation of our strategy and upon financial, competitive, regulatory, technical and other factors, many of which are beyond our control. If we are not able to generate sufficient cash from operations to make payments under our credit agreements or to meet our other debt service obligations, we may need to refinance our indebtedness. Our ability to obtain such financing will depend upon our financial condition at the time, the restrictions in the agreements governing our indebtedness and other factors, including general market and economic conditions. If such refinancing were not possible, we could be forced to dispose of assets at unfavorable prices. Even if we could obtain such financing, we cannot be sure that it would be on terms that are favorable to us. In addition, we could default on our debt obligations.