CSS » Topics » Forward-Looking and Cautionary Statements

These excerpts taken from the CSS 10-K filed Jun 2, 2009.
Forward-Looking and Cautionary Statements
 
This report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding continued use of acquisitions to stimulate further growth; the expected future impact of legal proceedings and changes in accounting principles; the anticipated effects of measures taken by the Company to respond to cost and price pressures; the expected reduction of inventory levels; strengthened product lines and new product initiatives; and the Company’s anticipation that quarterly cash dividends will continue to be paid in the future. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market and economic conditions; increased competition; increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs and the risk that the Company may not be able to integrate and derive the expected benefits from such acquisitions; risks associated with the Company’s ERP systems standardization project, including the risk that the cost of the project will exceed expectations, the risk that the expected benefits of the project will not be realized and the risk that implementation of the project will interfere with and adversely affect the Company’s operations and financial performance; the risk that customers may become insolvent, may delay payments or may impose deductions or penalties on amounts owed on the Company; costs of compliance with governmental regulations and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws, and other factors described more fully elsewhere in this annual report on Form 10-K and in the Company’s previous filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.
 
The Company’s activities expose it to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. These financial exposures are monitored and, where considered appropriate, managed by the Company as described below.
 
Interest Rate Risk
 
The Company’s primary market risk exposure with regard to financial instruments is to changes in interest rates. Pursuant to the Company’s variable rate lines of credit, a change in either the lender’s base rate or the London Interbank Offered Rate (LIBOR) would affect the rate at which the Company could borrow funds thereunder. Based on average borrowings under these credit facilities of $50,372,000 for the year ended March 31, 2009, a 1% increase or decrease in floating interest rates would have increased or decreased annual interest expense by approximately $504,000. Based on an average cash balance of $8,597,000 for the year ended March 31, 2009, a 1% increase or decrease in interest rates would have increased or decreased annual interest income by approximately $86,000.


20


Table of Contents

Foreign Currency Risk
 
Approximately 3% of the Company’s sales in fiscal 2009 were denominated in a foreign currency. The Company considers its risk exposure with regard to foreign currency fluctuations insignificant as it enters into foreign currency forward contracts to hedge the majority of firmly committed transactions and related receivables that are denominated in a foreign currency. The Company has designated its foreign currency forward contracts as fair value hedges. The gains or losses on the fair value hedges are recognized in earnings and generally offset the transaction gains or losses on the foreign denominated assets that they are intended to hedge.


21


 

Item 8.   Financial Statements and Supplementary Data.
 
CSS INDUSTRIES, INC. AND SUBSIDIARIES
 
Forward-Looking and Cautionary Statements
 
This report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding continued use of acquisitions to stimulate further growth; the expected future impact of legal proceedings and changes in accounting principles; the anticipated effects of measures taken by the Company to respond to cost and price pressures; the expected reduction of inventory levels; strengthened product lines and new product initiatives; and the Company’s anticipation that quarterly cash dividends will continue to be paid in the future. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market and economic conditions; increased competition; increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs and the risk that the Company may not be able to integrate and derive the expected benefits from such acquisitions; risks associated with the Company’s ERP systems standardization project, including the risk that the cost of the project will exceed expectations, the risk that the expected benefits of the project will not be realized and the risk that implementation of the project will interfere with and adversely affect the Company’s operations and financial performance; the risk that customers may become insolvent, may delay payments or may impose deductions or penalties on amounts owed on the Company; costs of compliance with governmental regulations and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws, and other factors described more fully elsewhere in this annual report on Form 10-K and in the Company’s previous filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.
 
The Company’s activities expose it to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. These financial exposures are monitored and, where considered appropriate, managed by the Company as described below.
 
Interest Rate Risk
 
The Company’s primary market risk exposure with regard to financial instruments is to changes in interest rates. Pursuant to the Company’s variable rate lines of credit, a change in either the lender’s base rate or the London Interbank Offered Rate (LIBOR) would affect the rate at which the Company could borrow funds thereunder. Based on average borrowings under these credit facilities of $50,372,000 for the year ended March 31, 2009, a 1% increase or decrease in floating interest rates would have increased or decreased annual interest expense by approximately $504,000. Based on an average cash balance of $8,597,000 for the year ended March 31, 2009, a 1% increase or decrease in interest rates would have increased or decreased annual interest income by approximately $86,000.


20


Table of Contents

Foreign Currency Risk
 
Approximately 3% of the Company’s sales in fiscal 2009 were denominated in a foreign currency. The Company considers its risk exposure with regard to foreign currency fluctuations insignificant as it enters into foreign currency forward contracts to hedge the majority of firmly committed transactions and related receivables that are denominated in a foreign currency. The Company has designated its foreign currency forward contracts as fair value hedges. The gains or losses on the fair value hedges are recognized in earnings and generally offset the transaction gains or losses on the foreign denominated assets that they are intended to hedge.


21


 

Item 8.   Financial Statements and Supplementary Data.
 
CSS INDUSTRIES, INC. AND SUBSIDIARIES
 
Forward-Looking
and Cautionary Statements



 



This report includes “forward-looking statements”
within the meaning of the Private Securities Litigation Reform
Act of 1995, including statements regarding continued use of
acquisitions to stimulate further growth; the expected future
impact of legal proceedings and changes in accounting
principles; the anticipated effects of measures taken by the
Company to respond to cost and price pressures; the expected
reduction of inventory levels; strengthened product lines and
new product initiatives; and the Company’s anticipation
that quarterly cash dividends will continue to be paid in the
future. Forward-looking statements are based on the beliefs of
the Company’s management as well as assumptions made by and
information currently available to the Company’s management
as to future events and financial performance with respect to
the Company’s operations. Forward-looking statements speak
only as of the date made. The Company undertakes no obligation
to update any forward-looking statements to reflect the events
or circumstances arising after the date as of which they were
made. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various
factors, including without limitation, general market and
economic conditions; increased competition; increased operating
costs, including labor-related and energy costs and costs
relating to the imposition or retrospective application of
duties on imported products; currency risks and other risks
associated with international markets; risks associated with
acquisitions, including acquisition integration costs and the
risk that the Company may not be able to integrate and derive
the expected benefits from such acquisitions; risks associated
with the Company’s ERP systems standardization project,
including the risk that the cost of the project will exceed
expectations, the risk that the expected benefits of the project
will not be realized and the risk that implementation of the
project will interfere with and adversely affect the
Company’s operations and financial performance; the risk
that customers may become insolvent, may delay payments or may
impose deductions or penalties on amounts owed on the Company;
costs of compliance with governmental regulations and government
investigations; liability associated with non-compliance with
governmental regulations, including regulations pertaining to
the environment, Federal and state employment laws, and import
and export controls and customs laws, and other factors
described more fully elsewhere in this annual report on
Form 10-K
and in the Company’s previous filings with the Securities
and Exchange Commission. As a result of these factors, readers
are cautioned not to place undue reliance on any forward-looking
statements included herein or that may be made elsewhere from
time to time by, or on behalf of, the Company.


 















Item 7A.  

Quantitative
and Qualitative Disclosures About Market Risk.



 



The Company’s activities expose it to a variety of market
risks, including the effects of changes in interest rates and
foreign currency exchange rates. These financial exposures are
monitored and, where considered appropriate, managed by the
Company as described below.


 




Interest
Rate Risk



 



The Company’s primary market risk exposure with regard to
financial instruments is to changes in interest rates. Pursuant
to the Company’s variable rate lines of credit, a change in
either the lender’s base rate or the London Interbank
Offered Rate (LIBOR) would affect the rate at which the Company
could borrow funds thereunder. Based on average borrowings under
these credit facilities of $50,372,000 for the year ended
March 31, 2009, a 1% increase or decrease in floating
interest rates would have increased or decreased annual interest
expense by approximately $504,000. Based on an average cash
balance of $8,597,000 for the year ended March 31, 2009, a
1% increase or decrease in interest rates would have increased
or decreased annual interest income by approximately $86,000.





20





Table of Contents







Foreign
Currency Risk



 



Approximately 3% of the Company’s sales in fiscal 2009 were
denominated in a foreign currency. The Company considers its
risk exposure with regard to foreign currency fluctuations
insignificant as it enters into foreign currency forward
contracts to hedge the majority of firmly committed transactions
and related receivables that are denominated in a foreign
currency. The Company has designated its foreign currency
forward contracts as fair value hedges. The gains or losses on
the fair value hedges are recognized in earnings and generally
offset the transaction gains or losses on the foreign
denominated assets that they are intended to hedge.





21





 


















Item 8.  

Financial
Statements and Supplementary Data.



 




CSS
INDUSTRIES, INC. AND SUBSIDIARIES




 




Forward-Looking
and Cautionary Statements



 



This report includes “forward-looking statements”
within the meaning of the Private Securities Litigation Reform
Act of 1995, including statements regarding continued use of
acquisitions to stimulate further growth; the expected future
impact of legal proceedings and changes in accounting
principles; the anticipated effects of measures taken by the
Company to respond to cost and price pressures; the expected
reduction of inventory levels; strengthened product lines and
new product initiatives; and the Company’s anticipation
that quarterly cash dividends will continue to be paid in the
future. Forward-looking statements are based on the beliefs of
the Company’s management as well as assumptions made by and
information currently available to the Company’s management
as to future events and financial performance with respect to
the Company’s operations. Forward-looking statements speak
only as of the date made. The Company undertakes no obligation
to update any forward-looking statements to reflect the events
or circumstances arising after the date as of which they were
made. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various
factors, including without limitation, general market and
economic conditions; increased competition; increased operating
costs, including labor-related and energy costs and costs
relating to the imposition or retrospective application of
duties on imported products; currency risks and other risks
associated with international markets; risks associated with
acquisitions, including acquisition integration costs and the
risk that the Company may not be able to integrate and derive
the expected benefits from such acquisitions; risks associated
with the Company’s ERP systems standardization project,
including the risk that the cost of the project will exceed
expectations, the risk that the expected benefits of the project
will not be realized and the risk that implementation of the
project will interfere with and adversely affect the
Company’s operations and financial performance; the risk
that customers may become insolvent, may delay payments or may
impose deductions or penalties on amounts owed on the Company;
costs of compliance with governmental regulations and government
investigations; liability associated with non-compliance with
governmental regulations, including regulations pertaining to
the environment, Federal and state employment laws, and import
and export controls and customs laws, and other factors
described more fully elsewhere in this annual report on
Form 10-K
and in the Company’s previous filings with the Securities
and Exchange Commission. As a result of these factors, readers
are cautioned not to place undue reliance on any forward-looking
statements included herein or that may be made elsewhere from
time to time by, or on behalf of, the Company.


 















Item 7A.  

Quantitative
and Qualitative Disclosures About Market Risk.



 



The Company’s activities expose it to a variety of market
risks, including the effects of changes in interest rates and
foreign currency exchange rates. These financial exposures are
monitored and, where considered appropriate, managed by the
Company as described below.


 




Interest
Rate Risk



 



The Company’s primary market risk exposure with regard to
financial instruments is to changes in interest rates. Pursuant
to the Company’s variable rate lines of credit, a change in
either the lender’s base rate or the London Interbank
Offered Rate (LIBOR) would affect the rate at which the Company
could borrow funds thereunder. Based on average borrowings under
these credit facilities of $50,372,000 for the year ended
March 31, 2009, a 1% increase or decrease in floating
interest rates would have increased or decreased annual interest
expense by approximately $504,000. Based on an average cash
balance of $8,597,000 for the year ended March 31, 2009, a
1% increase or decrease in interest rates would have increased
or decreased annual interest income by approximately $86,000.





20





Table of Contents







Foreign
Currency Risk



 



Approximately 3% of the Company’s sales in fiscal 2009 were
denominated in a foreign currency. The Company considers its
risk exposure with regard to foreign currency fluctuations
insignificant as it enters into foreign currency forward
contracts to hedge the majority of firmly committed transactions
and related receivables that are denominated in a foreign
currency. The Company has designated its foreign currency
forward contracts as fair value hedges. The gains or losses on
the fair value hedges are recognized in earnings and generally
offset the transaction gains or losses on the foreign
denominated assets that they are intended to hedge.





21





 


















Item 8.  

Financial
Statements and Supplementary Data.



 




CSS
INDUSTRIES, INC. AND SUBSIDIARIES




 




These excerpts taken from the CSS 10-K filed Jun 2, 2008.
Forward-Looking and Cautionary Statements
 
This report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected future benefits and costs from the Company’s restructuring plan involving the closure of its facilities in Elysburg, Pennsylvania and Troy, Pennsylvania; continued use of acquisitions to stimulate further growth; the expected future impact of changes in accounting principles; the anticipated effects of measures taken by the Company to respond to cost and price pressures; and the Company’s anticipation that quarterly cash dividends will continue to be paid in the future. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations. Forward- looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market conditions; increased competition; increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products; currency risks and other risks associated with international markets; risks associated with acquisitions, including acquisition integration costs; risks associated with the restructuring plan to close the Company’s facilities in Elysburg, Pennsylvania and Troy, Pennsylvania, including the risk that the restructuring related savings and/or costs may exceed the presently expected amounts and the risk that the closures will adversely affect the Company’s ability to fulfill its customer’s orders on time; risks associated with the Company’s ERP systems standardization project, including the risk that the cost of the project will exceed expectations, the risk that the expected benefits of the project will not be realized and the risk that implementation of the project will interfere with and adversely affect the Company’s operations and financial performance; the risk that customers may become insolvent; costs of compliance with governmental regulations


17


 

and government investigations; liability associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws, and other factors described more fully elsewhere in this annual report on Form 10-K and in the Company’s previous filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.
 
The Company’s activities expose it to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. These financial exposures are actively monitored and, where considered appropriate, managed by the Company as described below.
 
Interest Rate Risk
 
The Company’s primary market risk exposure with regard to financial instruments is to changes in interest rates. Pursuant to the Company’s variable rate lines of credit, a change in either the lender’s base rate or LIBOR would affect the rate at which the Company could borrow funds thereunder. Based on average borrowings under these credit facilities of $12,323,000 for the year ended March 31, 2008, a 1% increase or decrease in floating interest rates would have increased or decreased annual interest expense by approximately $123,000. Based on an average cash balance of $36,023,000 for the year ended March 31, 2008, a 1% increase or decrease in interest rates would have increased or decreased annual interest income by approximately $360,000.
 
Foreign Currency Risk
 
Approximately 4% of the Company’s sales in fiscal 2008 were denominated in a foreign currency. The Company considers its risk exposure with regard to foreign currency fluctuations insignificant as it enters into foreign currency forward contracts to hedge the majority of firmly committed transactions and related receivables that are denominated in a foreign currency. The Company has designated its foreign currency forward contracts as fair value hedges. The gains or losses on the fair value hedges are recognized in earnings and generally offset the transaction gains or losses on the foreign denominated assets that they are intended to hedge.


18


 

Item 8.   Financial Statements and Supplementary Data.
 
CSS INDUSTRIES, INC. AND SUBSIDIARIES
 
Forward-Looking
and Cautionary Statements



 



This report includes “forward-looking statements”
within the meaning of the Private Securities Litigation Reform
Act of 1995, including statements regarding expected future
benefits and costs from the Company’s restructuring plan
involving the closure of its facilities in Elysburg,
Pennsylvania and Troy, Pennsylvania; continued use of
acquisitions to stimulate further growth; the expected future
impact of changes in accounting principles; the anticipated
effects of measures taken by the Company to respond to cost and
price pressures; and the Company’s anticipation that
quarterly cash dividends will continue to be paid in the future.
Forward-looking statements are based on the beliefs of the
Company’s management as well as assumptions made by and
information currently available to the Company’s management
as to future events and financial performance with respect to
the Company’s operations. Forward- looking statements speak
only as of the date made. The Company undertakes no obligation
to update any forward-looking statements to reflect the events
or circumstances arising after the date as of which they were
made. Actual events or results may differ materially from those
discussed in forward-looking statements as a result of various
factors, including without limitation, general market
conditions; increased competition; increased operating costs,
including labor-related and energy costs and costs relating to
the imposition or retrospective application of duties on
imported products; currency risks and other risks associated
with international markets; risks associated with acquisitions,
including acquisition integration costs; risks associated with
the restructuring plan to close the Company’s facilities in
Elysburg, Pennsylvania and Troy, Pennsylvania, including the
risk that the restructuring related savings
and/or costs
may exceed the presently expected amounts and the risk that the
closures will adversely affect the Company’s ability to
fulfill its customer’s orders on time; risks associated
with the Company’s ERP systems standardization project,
including the risk that the cost of the project will exceed
expectations, the risk that the expected benefits of the project
will not be realized and the risk that implementation of the
project will interfere with and adversely affect the
Company’s operations and financial performance; the risk
that customers may become insolvent; costs of compliance with
governmental regulations





17





 






and government investigations; liability associated with
non-compliance with governmental regulations, including
regulations pertaining to the environment, Federal and state
employment laws, and import and export controls and customs
laws, and other factors described more fully elsewhere in this
annual report on
Form 10-K
and in the Company’s previous filings with the Securities
and Exchange Commission. As a result of these factors, readers
are cautioned not to place undue reliance on any forward-looking
statements included herein or that may be made elsewhere from
time to time by, or on behalf of, the Company.


 















Item 7A.  

Quantitative
and Qualitative Disclosures About Market Risk.



 



The Company’s activities expose it to a variety of market
risks, including the effects of changes in interest rates and
foreign currency exchange rates. These financial exposures are
actively monitored and, where considered appropriate, managed by
the Company as described below.


 




Interest
Rate Risk



 



The Company’s primary market risk exposure with regard to
financial instruments is to changes in interest rates. Pursuant
to the Company’s variable rate lines of credit, a change in
either the lender’s base rate or LIBOR would affect the
rate at which the Company could borrow funds thereunder. Based
on average borrowings under these credit facilities of
$12,323,000 for the year ended March 31, 2008, a 1%
increase or decrease in floating interest rates would have
increased or decreased annual interest expense by approximately
$123,000. Based on an average cash balance of $36,023,000 for
the year ended March 31, 2008, a 1% increase or decrease in
interest rates would have increased or decreased annual interest
income by approximately $360,000.


 




Foreign
Currency Risk



 



Approximately 4% of the Company’s sales in fiscal 2008 were
denominated in a foreign currency. The Company considers its
risk exposure with regard to foreign currency fluctuations
insignificant as it enters into foreign currency forward
contracts to hedge the majority of firmly committed transactions
and related receivables that are denominated in a foreign
currency. The Company has designated its foreign currency
forward contracts as fair value hedges. The gains or losses on
the fair value hedges are recognized in earnings and generally
offset the transaction gains or losses on the foreign
denominated assets that they are intended to hedge.





18





 


















Item 8.  

Financial
Statements and Supplementary Data.



 




CSS
INDUSTRIES, INC. AND SUBSIDIARIES




 




This excerpt taken from the CSS 10-K filed Jun 5, 2007.
Forward-Looking and Cautionary Statements
 
This report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s expectation that it will sell facilities held for sale within the next 12 months for an amount greater than the current carrying value; improved profitability and efficiency from the Company’s restructuring program to combine the operations of its Cleo and Berwick Offray subsidiaries; estimated future expenses in connection with such restructuring program; continued use of acquisitions to stimulate further growth; the Company’s expected ultimate liabilities from lawsuits and claims; the expected future impact of changes in accounting principles; and the anticipated effects of measures taken by the Company to respond to cost and price pressures. Forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management as to future events and financial performance with respect to the Company’s operations. Forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statements to reflect the events or circumstances arising after the date as of which they were made. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, general market conditions, increased competition, increased operating costs, including labor-related and energy costs and costs relating to the imposition or retrospective application of duties on imported products, currency risks and other risks associated with international markets, risks associated with the combination of the operations of the Company’s Cleo and Berwick Offray subsidiaries, including restructuring costs and the risk that such costs may exceed the expected amounts described herein, the risk that customers may become insolvent, costs of compliance with governmental regulations and government investigations, liability


17


Table of Contents

associated with non-compliance with governmental regulations, including regulations pertaining to the environment, Federal and state employment laws, and import and export controls and customs laws, and other factors described more fully elsewhere in this annual report on Form 10-K and in the Company’s previous filings with the Securities and Exchange Commission. As a result of these factors, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, the Company.
 
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.
 
The Company’s activities expose it to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. These financial exposures are actively monitored and, where considered appropriate, managed by the Company as described below.
 
Interest Rate Risk
 
The Company’s primary market risk exposure with regard to financial instruments is to changes in interest rates. Pursuant to the Company’s variable rate lines of credit, a change in either the lender’s base rate or LIBOR would affect the rate at which the Company could borrow funds thereunder. Based on average borrowings under these credit facilities of $28,547,000 for the year ended March 31, 2007, a 1% increase or decrease in floating interest rates would have increased or decreased annual interest expense by approximately $285,000. Based on an average cash balance of $32,872,000 for the year ended March 31, 2007, a 1% increase or decrease in interest rates would have increased or decreased annual interest income by approximately $329,000.
 
Foreign Currency Risk
 
Approximately 4% of the Company’s sales in fiscal 2007 were denominated in a foreign currency. The Company considers its risk exposure with regard to foreign currency fluctuations insignificant as it enters into foreign currency forward contracts to hedge the majority of firmly committed transactions and related receivables that are denominated in a foreign currency. The Company has designated its foreign currency forward contracts as fair value hedges. The gains or losses on the fair value hedges are recognized in earnings and generally offset the transaction gains or losses on the foreign denominated assets that they are intended to hedge.


18


Table of Contents

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