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NUTRACEUTICAL INTERNATIONAL CORP - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations(Edgar Glimpses Via Acquire Media NewsEdge) General The following discussion and analysis should be read in conjunction with the other sections of this report on Form 10-Q, including Part I, Item 1. We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provide ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships. We manufacture and sell nutritional supplements and other natural products under numerous brands including Solaray®, KAL®, Nature's Life®, LifeTime®, Natural Balance®, bioAllers®, Herbs for Kids®, NaturalCare®, Health from the Sun®, Life-flo®, Organix South®, Pioneer® and Monarch Nutraceuticals™. We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom's Natural Foods™ and Cornucopia Community Market™. We also own health food stores, which operate under various trade names including Fresh Vitamins™, Granola's™, Nature's Discount®, Warehouse Vitamins™ and Peachtree Natural Foods®. We were formed in 1993 to effect a consolidation strategy in the fragmented vitamin, mineral, herbal and other nutritional supplements industry (the "VMS Industry"). Since our formation, we have completed numerous acquisitions of assets or stock of companies within the VMS Industry. As a result of acquisitions, internal growth and cost management, we believe that we are well positioned to continue to capitalize on acquisition opportunities that arise in the VMS Industry. Critical Accounting Policies The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America required us to make estimates and assumptions that affected the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported periods. Significant estimates included values and lives assigned to acquired intangible assets, reserves for customer returns and allowances, uncollectible accounts receivable, valuation adjustments for slow moving, obsolete and/or damaged inventory and valuation and recoverability of long-lived assets. Actual results may differ from these estimates. Our critical accounting policies include the following: Accounts Receivable-Provision is made for estimated bad debts based on periodic analysis of individual customer balances, including an evaluation of days sales outstanding, payment history, recent payment trends and perceived credit worthiness. If general economic conditions and/or customer financial condition were to change, additional provisions for bad debts may be required, which could have a material impact on the consolidated financial statements. Inventories-Valuation adjustments are made for slow moving, obsolete and/or damaged inventory based on periodic analysis of individual inventory items, including an evaluation of historical usage and/or movement, age, expiration date and general condition. If market demand and/or consumer preferences are less favorable than historical trends or future expectations, additional valuation 14-------------------------------------------------------------------------------- Table of Contents adjustments for slow moving, obsolete and/or damaged inventory may be required, which could have a material impact on the consolidated financial statements. Property, Plant and Equipment-Depreciation and amortization expense is impacted by our judgments regarding the estimated useful lives of assets placed in service. If the actual lives of assets are significantly less than expected, depreciation and amortization expense would be accelerated, which could have a material impact on the consolidated financial statements. Property, plant and equipment are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset group may not be recoverable. We measure recoverability of the asset group by comparison of its carrying amount to the future undiscounted cash flows we expect the asset group to generate. If we consider the asset group to be impaired, we measure the amount of any impairment as the difference between the carrying amount and the fair value of the impaired asset group. Goodwill and Intangible Assets-Goodwill and intangible assets require estimates and a high degree of judgment in determining the initial recognition and measurement of goodwill and intangible assets, including factors and assumptions used in determining fair values and useful lives. The excess of purchase price over fair value of assets acquired in purchase transactions was classified as goodwill. Intangible assets with finite useful lives are amortized, while intangible assets with indefinite useful lives are not amortized. Amortizable intangible assets are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment on an annual basis or between annual tests if an event occurs that would cause us to believe that value is impaired. The appropriateness of the indefinite-life classification of non-amortizable intangible assets is also reviewed as part of the annual testing or when circumstances warrant a change to a finite life. We perform our annual impairment testing as of September 30 each year, which is the last day of our fiscal year. A two-step process is used to test for goodwill impairment. The first step is to determine if there is an indication of impairment by comparing the estimated fair value of each reporting unit to its carrying value, including existing goodwill. Reporting unit fair values are estimated using discounted cash flow models as well as considering market and other factors. Goodwill is considered impaired if the carrying value of a reporting unit exceeds the estimated fair value. Upon an indication of impairment, a second step is performed to measure the amount of the impairment by comparing the implied fair value of the reporting unit's goodwill with its carrying value. Intangible assets with indefinite useful lives are tested for impairment at the individual tradename level by comparing the fair value of the indefinite-lived intangible asset to its carrying amount. If the carrying amount of an indefinite-lived intangible asset exceeds its fair value, an impairment charge is recognized. Fair values of indefinite-lived intangible assets are determined based on discounted cash flows. Amortizable intangible assets are reviewed for recoverability by comparing an asset group's carrying amount to the future undiscounted cash flows the asset group is expected to generate. If the asset group is considered to be impaired, the difference between the carrying amount and the fair value of the impaired asset group is recorded. General and economic conditions may continue to impact retail and consumer demand, as well as the market price of our common stock, and could negatively impact our future operating performance, cash flow and/or stock price and could result in additional goodwill and/or intangible asset impairment charges being recorded in future periods. Also, we periodically review our brands to achieve marketing, sales and operational synergies. These reviews could result in brands being consolidated or discontinued and could result in intangible asset impairment charges being recorded in future periods. Additional goodwill and/or intangible asset impairment charges could materially impact our consolidated financial statements. The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity. 15-------------------------------------------------------------------------------- Table of Contents Revenue Recognition-Revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the product has been shipped and the customer takes ownership and assumes the risk of loss; (3) the selling price is fixed or determinable; and (4) collection of the resulting receivable is reasonably assured. We believe that these criteria are satisfied upon shipment from our facilities or, in the case of our neighborhood natural food markets and health food stores, at the point of sale within these stores. Revenue is reduced by provisions for estimated returns and allowances, which are based on historical averages that have not varied significantly for the periods presented, as well as specific known claims, if any. No other significant deductions from revenue must be estimated at the point in time that revenue is recognized. Our estimates and judgments related to our critical accounting policies, including factors and assumptions considered in making these estimates and judgments, did not vary significantly for the periods presented and had no material impact on the consolidated financial statements as reported. New Accounting Standards See Note 1 to the Condensed Consolidated Financial Statements for information regarding new accounting standards. Results of Operations The following table sets forth certain consolidated statements of operations data as a percentage of net sales for the periods indicated: Three Months Nine Months Ended June 30, Ended June 30, 2014 2013 2014 2013 Net sales 100.0 % 100.0 % 100.0 % 100.0 % Cost of sales 51.2 % 51.0 % 50.4 % 50.9 % Gross profit 48.8 % 49.0 % 49.6 % 49.1 % Selling, general and administrative 35.5 % 35.2 % 35.6 % 34.6 % Amortization of intangible assets 1.3 % 1.1 % 1.2 % 1.1 % Income from operations 12.0 % 12.7 % 12.8 % 13.4 % Interest and other expense, net 0.6 % 0.7 % 0.6 % 0.6 % Income before provision for income taxes 11.4 % 12.0 % 12.2 % 12.8 % Provision for income taxes 4.2 % 4.4 % 4.5 % 4.6 % Net income 7.2 % 7.6 % 7.7 % 8.2 % Adjusted EBITDA(1) 17.3 % 17.5 % 18.0 % 18.1 % -------------------------------------------------------------------------------- º (1) º See "-Adjusted EBITDA." Comparison of the Three Months Ended June 30, 2014 to the Three Months Ended June 30, 2013 Net Sales. Net sales increased by $4.8 million, or 9.5%, to $55.6 million for the three months ended June 30, 2014 ("third quarter of fiscal 2014") from $50.8 million for the three months ended June 30, 2013 ("third quarter of fiscal 2013"). Net sales of branded nutritional supplements and other natural products increased by $4.3 million, or 9.5%, to $50.1 million for the third quarter of fiscal 2014 compared to $45.8 million for the third quarter of fiscal 2013. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions and, to a lesser extent, an increase in sales volume of branded products to certain customers. The impact on net sales of branded products attributable to 16-------------------------------------------------------------------------------- Table of Contents price changes was not material. Other net sales increased by $0.5 million, or 9.5%, to $5.5 million for the third quarter of fiscal 2014 compared to $5.0 million for the third quarter of fiscal 2013. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions. Gross Profit. Gross profit increased by $2.3 million, or 9.1%, to $27.2 million for the third quarter of fiscal 2014 from $24.9 million for the third quarter of fiscal 2013. This increase in gross profit was primarily attributable to the increase in net sales. As a percentage of net sales, gross profit was 48.8% for the third quarter of fiscal 2014 and 49.0% for the third quarter of fiscal 2013. Selling, General and Administrative. Selling, general and administrative expenses increased by $1.9 million, or 10.4%, to $19.8 million for the third quarter of fiscal 2014 from $17.9 million for the third quarter of fiscal 2013. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2013 and fiscal 2014 acquisitions. As a percentage of net sales, selling, general and administrative expenses were 35.5% for the third quarter of fiscal 2014 and 35.2% for the third quarter of fiscal 2013. Amortization of Intangible Assets. Amortization of intangible assets was $0.7 million for the third quarter of fiscal 2014 and $0.6 million for the third quarter of fiscal 2013. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions. Interest and Other Expense, Net. Net interest and other expense was $0.4 million for the third quarter of fiscal 2014 and $0.3 million for the third quarter of fiscal 2013 and primarily consisted of interest expense on indebtedness under our revolving credit facility. Provision for Income Taxes. Our effective tax rate was 36.9% for both the third quarter of fiscal 2014 and the third quarter of fiscal 2013. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes. Comparison of the Nine Months Ended June 30, 2014 to the Nine Months Ended June 30, 2013 Net Sales. Net sales increased by $4.9 million, or 3.1%, to $162.0 million for the nine months ended June 30, 2014 from $157.1 million for the nine months ended June 30, 2013. Net sales of branded nutritional supplements and other natural products increased by $4.3 million, or 3.0%, to $146.6 million for the nine months ended June 30, 2014 from $142.3 million for the nine months ended June 30, 2013. The increase in net sales of branded nutritional supplements and other natural products was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions and $1.5 million in price increases, partially offset by a decrease in sales volume of branded products to certain customers. Other net sales increased by $0.6 million, or 4.1%, to $15.4 million for the nine months ended June 30, 2014 from $14.8 million for the nine months ended June 30, 2013. The increase in other net sales was primarily related to the net sales contributions of the fiscal 2013 and fiscal 2014 acquisitions. Gross Profit. Gross profit increased by $3.2 million, or 4.2%, to $80.4 million for the nine months ended June 30, 2014 from $77.2 million for the nine months ended June 30, 2013. The increase in gross profit was primarily attributable to the increase in net sales. As a percentage of net sales, gross profit increased to 49.6% for the nine months ended June 30, 2014 from 49.1% for the nine months ended June 30, 2013. This increase in gross profit percentage was primarily attributable to decreased manufacturing labor and overhead costs in certain manufacturing processes. Selling, General and Administrative. Selling, general and administrative expenses increased by $3.3 million, or 6.1%, to $57.6 million for the nine months ended June 30, 2014 from $54.3 million for the nine months ended June 30, 2013. As a percentage of net sales, selling, general and administrative expenses increased to 35.6% for the nine months ended June 30, 2014 compared to 34.6% for the nine 17 -------------------------------------------------------------------------------- Table of Contents months ended June 30, 2013. This increase in selling, general and administrative expenses was primarily attributable to operational and transition costs related to the fiscal 2013 and fiscal 2014 acquisitions. Amortization of Intangible Assets. Amortization of intangible assets was $1.9 million for the nine months ended June 30, 2014 and $1.7 million for the nine months ended June 30, 2013. For each period, amortization expense was primarily related to intangible assets recorded in connection with acquisitions. Interest and Other Expense, Net. Net interest and other expense was $1.0 million for both the nine months ended June 30, 2014 and 2013 and primarily consisted of interest expense on indebtedness under our revolving credit facility. Provision for Income Taxes. Our effective tax rate was 37.0% for the nine months ended June 30, 2014 and 36.0% for the nine months ended June 30, 2013. In each period, our effective tax rate was higher than the federal statutory rate primarily due to state taxes. Adjusted EBITDA Adjusted EBITDA (a non-GAAP measure) is defined in our performance measures as earnings before net interest and other expense, taxes, depreciation and amortization. Adjusted EBITDA has some inherent limitations in measuring operating performance due to the exclusion of certain financial elements such as depreciation and amortization and is not necessarily comparable to other similarly-titled captions of other companies due to potential inconsistencies in the method of calculation. Furthermore, Adjusted EBITDA is not intended to be a substitute for cash flows from operating activities, as a measure of liquidity, or an alternative to net income in determining our operating performance in accordance with generally accepted accounting principles. Our use of an EBITDA-based metric should be considered within the following context: º • º We acknowledge that plant and equipment (while less important in our line of business due to outsourcing alternatives) are necessary to earn revenue based on our current business model. º • º Our use of an EBITDA-based measure of operating performance is not based on any belief about the reasonableness of excluding depreciation and amortization when measuring financial performance. º • º Our use of an EBITDA-based measure is supported by its importance to the following key stakeholders: º • º Analysts-who estimate our projected Adjusted EBITDA and other EBITDA-based metrics in their independently-developed financial models for investors; º • º Creditors-who evaluate our operating performance based on compliance with certain EBITDA-based debt covenants; º • º Investment Bankers-who use EBITDA-based metrics in their written evaluations and comparisons of companies within ourindustry; and º • º Board of Directors and Executive Management-who useEBITDA-based metrics for evaluating management performance relative to our operating budget and bank covenant compliance, as well as our ability to service debt and raise capital for growth opportunities, including acquisitions, which are a critical component of our stated strategy. Historically, we have recorded a monthly accrual for incentive compensation as a percentage of Adjusted EBITDA, which has been paid out to executive management, as well as other employees, upon completion of our annual audit. 18 -------------------------------------------------------------------------------- Table of Contents The following table sets forth a reconciliation of net income to Adjusted EBITDA for each period included herein: Three Months Nine Months Ended Ended June 30, June 30, 2014 2013 2014 2013 (dollars in thousands) Net income $ 3,997 $ 3,842 $ 12,456 $ 12,872 Provision for income taxes 2,333 2,249 7,329 7,249 Interest and other expense, net(1) 356 336 1,024 1,024 Depreciation and amortization 2,942 2,486 8,357 7,325 Adjusted EBITDA $ 9,628 $ 8,913 $ 29,166 $ 28,470 -------------------------------------------------------------------------------- º (1) º Includes amortization of deferred financing fees. Our Adjusted EBITDA increased to $9.6 million for the third quarter of fiscal 2014 from $8.9 million for the third quarter of fiscal 2013. Adjusted EBITDA as a percentage of net sales was 17.3% for the third quarter of fiscal 2014 and 17.5% for the third quarter of fiscal 2013. Our Adjusted EBITDA increased to $29.2 million for the nine months ended June 30, 2014 from $28.5 million for the nine months ended June 30, 2013. Adjusted EBITDA as a percentage of net sales was 18.0% for the nine months ended June 30, 2014 and 18.1% for the nine months ended June 30, 2013. Seasonality We believe that our business is characterized by minor seasonality. However, sales to any particular customer or of any particular product can vary substantially from one quarter to the next based on such factors as industry trends, timing of promotional discounts, domestic and international economic conditions and acquisition-related activities. Excluding the effect of acquisitions, we have historically recorded higher branded products sales volume during the second fiscal quarter (January through March) due to increased interest in health-related products among consumers following the holiday season. Liquidity and Capital Resources We had working capital of $57.6 million as of June 30, 2014 compared to $53.3 million as of September 30, 2013. The increase in working capital was primarily the result of increases in accounts receivable and inventories, partially offset by a decrease in cash. Net cash provided by operating activities for the nine months ended June 30, 2014 was $16.1 million compared to $19.2 million for the comparable period in fiscal 2013. This decrease in net cash provided by operating activities for the nine months ended June 30, 2014 was primarily attributable to changes in operating assets and liabilities. Net cash used in investing activities was $24.8 million for the nine months ended June 30, 2014 compared to $7.0 million for the comparable period in fiscal 2013. Our investing activities consisted of acquisitions of businesses and capital expenditures. The capital expenditures primarily related to buildings, building improvements, distribution and manufacturing equipment and information systems. During the nine months ended June 30, 2014, we made six acquisitions of businesses. On October 16, 2013, we acquired certain operating assets of TCCD International, Inc. On November 25, 2013, we acquired certain operating assets of Green Luxury Brands, Inc. On December 19, 2013, we acquired certain operating assets of Twinlab Corporation. On January 15, 2014, we acquired certain 19-------------------------------------------------------------------------------- Table of Contents operating assets of Peachtree Natural Foods, Inc. On April 11, 2014, we acquired certain operating assets of Northwest Health Foods, Inc. On April 17, 2014, we acquired certain operating assets of Bio-Genesis Nutraceuticals, Inc. The aggregate purchase price of these acquisitions was $16.2 million in cash. During the nine months ended June 30, 2013, we made two acquisitions of businesses. On April 1, 2013, we acquired certain operating assets of Tri Medica International, Inc. On May 17, 2013, we acquired certain operating assets of LC Nutrition and Vitamin House. The aggregate purchase price of these acquisitions was $0.8 million. Net cash provided by financing activities was $5.4 million for the nine months ended June 30, 2014 and net cash used in financing activities was $11.5 million for the comparable period in fiscal 2013. During these periods, financing activities primarily related to borrowings and repayments under our revolving credit facility, purchases of common stock for treasury and proceeds from the issuance of common stock related to stock option exercises and the direct stock purchase plan. Also, in December 2012, our board of directors declared a special cash dividend of $1.00 per share for all shares of common stock. This special cash dividend totaled $9.8 million and was paid on December 28, 2012. In October 2007, we registered a direct stock purchase plan with the Securities and Exchange Commission. The purpose of this direct stock purchase plan is to provide a convenient way for existing stockholders, as well as new investors, to purchase shares of our common stock. A total of 1,500,000 shares of our common stock were registered under the plan with 3,061 shares purchased during the nine months ended June 30, 2014. As of June 30, 2014, there were 1,382,444 shares of common stock available for purchase. On December 17, 2010, we amended and restated our revolving credit facility (the "Restated Credit Agreement"). The Restated Credit Agreement extends the term of the credit facility to December 2015, resets the available credit borrowings to $90 million with no automatic reductions and provides an accordion feature which can increase the available credit borrowings to $120 million subject to approval by the lenders and compliance with certain covenants and conditions. The lenders under the Restated Credit Agreement are Rabobank International and Wells Fargo. To date, we have not experienced any difficulties in accessing the available funds under the Restated Credit Agreement. Deferred financing fees of $0.9 million related to the Restated Credit Agreement are being amortized over the term of the Restated Credit Agreement on a straight-line basis, which is not materially different from the effective interest method. At June 30, 2014, we had outstanding revolving credit borrowings of $41.5 million under the Restated Credit Agreement. Borrowings under the Restated Credit Agreement are collateralized by substantially all of our assets. At our election, borrowings bear interest at the applicable Eurodollar Rate plus a variable margin or at a base rate, which is the higher of the Federal Funds Rate plus 0.5% or the Prime Lending Rate, plus a variable margin. At June 30, 2014, the applicable weighted-average interest rate for outstanding borrowings was 2.23%. We are also required to pay a quarterly fee of 0.50% on the unused balance under the Restated Credit Agreement. Accrued interest on Eurodollar Rate borrowings is payable based on elected intervals of one, two or three months. Accrued interest on base rate borrowings is payable quarterly. The Restated Credit Agreement matures on December 15, 2015, and we are required to repay all principal and interest outstanding under the Restated Credit Agreement on such date. The Restated Credit Agreement contains restrictive covenants, including limitations on incurring certain other indebtedness and requirements that we maintain certain financial ratios. As of June 30, 2014, we were in compliance with the restrictive covenants. Upon the occurrence of a default, the lender has various remedies or rights, which may include proceeding against the collateral or requiring us to repay all amounts outstanding under the Restated Credit Agreement. 20-------------------------------------------------------------------------------- Table of Contents A key component of our business strategy is to seek to make additional acquisitions, which may require that we obtain additional financing, which could include the incurrence of substantial additional indebtedness or the issuance of additional stock. We believe that borrowings under our current revolving credit facility or a replacement credit facility, together with cash flows from operations, will be sufficient to make required payments under the current credit facility or any such replacement facility, and to make anticipated capital expenditures and fund working capital needs for the next twelve months. Contractual Obligations and Other Commitments Our significant non-cancelable contractual obligations and other commitments as of June 30, 2014 were as follows: Payments Due By Period Less Than 4 - 5 After Contractual Obligations and Other Commitments Total 1 Year 1 - 3 Years Years 5 Years (dollars in thousands) Revolving credit facility $ 41,500 $ - $ 41,500 $ - $ - Interest on revolving credit facility(a) 1,750 1,198 552 - - Operating leases 6,783 3,765 2,601 417 - Total $ 50,033 $ 4,963 $ 44,653 $ 417 $ - -------------------------------------------------------------------------------- º (a) º Represents estimated interest obligations associated with our outstanding revolving credit facility balance of $41.5 million at June 30, 2014, assuming no principal payments are made before the maturity date of December 15, 2015, a weighted-average interest rate of 2.23% and an underutilization fee rate of 0.50%. Inflation Inflation affects the cost of raw materials, goods and services used by us. In recent years, inflation has been modest. The competitive environment somewhat limits our ability to recover higher costs resulting from inflation by raising prices. We seek to mitigate the adverse effects of inflation primarily through improved productivity and cost containment programs. We do not believe that inflation has had a material impact on our results of operations for the periods presented, except with respect to increased costs in manufacturing, packaging and distribution resulting from increased fuel and other petrochemical costs, as well as payroll-related costs, insurance premiums and other costs arising from or related to government imposed regulations. Forward-Looking Statements This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as "believe," "expects," "plan," "intend," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements. Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, (ii) unavailability of desirable acquisitions, inability to complete them or inability to integrate them (iii) increased costs, including from increased raw material or energy prices, (iv) changes in general worldwide economic or political conditions, (v) adverse publicity or negative consumer 21-------------------------------------------------------------------------------- Table of Contents perception regarding nutritional supplements, (vi) issues with obtaining raw materials of adequate quality or quantity, (vii) litigation and claims, including product liability, intellectual property and other types, (viii) disruptions from or following acquisitions including the loss of customers, (ix) increased competition, (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel, (xi) the loss of key personnel or the inability to manage our operations efficiently, (xii) problems with information management systems, manufacturing efficiencies and operations, (xiii) insurance coverage issues, (xiv) the volatility of the stock market generally and of our stock specifically, (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies, and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control. We undertake no obligation to update or revise publicly any forward-looking statements to reflect new information, events or circumstances occurring after the date of this Form 10-Q. |