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.
[ Back To TMCnet.com's Homepage ]
|