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HBI » Topics » We generally do not sell our products under contracts, and, as a result, our customers are generally not contractually obligated to purchase our products.These excerpts taken from the HBI 10-K filed Feb 19, 2008. We
generally do not sell our products under contracts, and, as a
result, our customers are generally not contractually obligated
to purchase our products, which causes some uncertainty as to
future sales and inventory levels.
We generally do not enter into purchase agreements that obligate
our customers to purchase our products, and as a result, most of
our sales are made on a purchase order basis. For example, we
have no agreements with Wal-Mart that obligate Wal-Mart to
purchase our products. If any of our customers experiences a
significant downturn in its business, or fails to remain
committed to our products or brands, the customer is generally
under no contractual obligation to purchase our products and,
consequently, may reduce or discontinue purchases from us. In
the past, such actions have resulted in a decrease in sales and
an increase in our inventory and have had an adverse effect on
our business, results of operations, financial condition and
cash flows. If such actions occur again in the future, our
business, results of operations and financial condition will
likely be similarly affected.
Continued
growth of our existing customers could result in increased
pricing pressure, reduced floor space for our products and other
changes that could be harmful to our business.
The retailers to which we sell our products have grown larger,
partly due to retailer consolidation, and, as such, now are able
to exercise greater negotiating power when purchasing our
products. Additionally, as our customers grow larger, they
increasingly may require us to provide them with some of our
products on an exclusive basis, which could cause an increase in
the number of stock keeping units, or “SKUs,” we must
carry and, consequently, increase our inventory levels and
working capital requirements. Moreover, as our customers grow
larger they may increasingly seek markdown allowances,
incentives and other forms of economic support which reduce our
gross margins and affect our profitability. Our financial
performance is negatively affected by these pricing pressures
when we are forced to reduce our prices without being able to
correspondingly reduce our production costs.
Table of Contents
We generally do not sell our products under contracts, and, as a result, our customers are generally not contractually obligated to purchase our products, which causes some uncertainty as to future sales and inventory levels. We generally do not enter into purchase agreements that obligate our customers to purchase our products, and as a result, most of our sales are made on a purchase order basis. For example, we have no agreements with Wal-Mart that obligate Wal-Mart to purchase our products. If any of our customers experiences a significant downturn in its business, or fails to remain committed to our products or brands, the customer is generally under no contractual obligation to purchase our products and, consequently, may reduce or discontinue purchases from us. In the past, such actions have resulted in a decrease in sales and an increase in our inventory and have had an adverse effect on our business, results of operations, financial condition and cash flows. If such actions occur again in the future, our business, results of operations and financial condition will likely be similarly affected. Continued growth of our existing customers could result in increased pricing pressure, reduced floor space for our products and other changes that could be harmful to our business. The retailers to which we sell our products have grown larger, partly due to retailer consolidation, and, as such, now are able to exercise greater negotiating power when purchasing our products. Additionally, as our customers grow larger, they increasingly may require us to provide them with some of our products on an exclusive basis, which could cause an increase in the number of stock keeping units, or “SKUs,” we must carry and, consequently, increase our inventory levels and working capital requirements. Moreover, as our customers grow larger they may increasingly seek markdown allowances, incentives and other forms of economic support which reduce our gross margins and affect our profitability. Our financial performance is negatively affected by these pricing pressures when we are forced to reduce our prices without being able to correspondingly reduce our production costs.
Table of ContentsThis excerpt taken from the HBI 10-K filed Sep 28, 2006. We
generally do not sell our products under contracts, and, as a
result, our customers are generally not contractually obligated
to purchase our products.
We generally do not enter into purchase agreements that obligate
our customers to purchase our products, and as a result, most of
our sales are made on a purchase order basis. For example, we
have no agreements with Wal-Mart that obligate Wal-Mart to
purchase our products. If any of our customers experiences a
significant downturn in its business, or fails to remain
committed to our products or brands, the customer is generally
under no contractual obligation to purchase our products and,
consequently, may reduce or discontinue purchases from us. In
the past, such actions have resulted in a decrease in sales and
an increase in our inventory and have had an adverse effect on
our business, results of operations and financial condition. If
such actions occur again in the future, our business, results of
operations and financial condition will likely be similarly
affected.
Further
consolidation among our customer base and continued growth of
our existing customers could result in increased pricing
pressure, reduced floor space for our products and other changes
that could be harmful to our business.
In recent years there has been a growing trend toward retailer
consolidation. As a result of this consolidation, the number of
retailers to which we sell our products continues to decline
and, as such, larger retailers now are able to exercise greater
negotiating power when purchasing our products. Continued
consolidation in the retail industry could result in further
price and other competition that may damage our business.
Additionally, as our customers grow larger, they increasingly
may require us to provide them with some of our products on an
exclusive basis, which could cause an increase in the number of
stock keeping units, or “SKUs,” we must carry and,
consequently, increase our inventory levels and working capital
requirements.
Moreover, as our customers consolidate and grow larger they may
increasingly seek markdown allowances, incentives and other
forms of economic support which reduce our gross margins and
affect our profitability. Our financial performance is
negatively affected by these pricing pressures when we are
forced to reduce our prices without being able to
correspondingly reduce our production costs.
This excerpt taken from the HBI 8-K filed Sep 5, 2006. We generally do not sell our products under contracts, and, as a result, our customers are generally not contractually obligated to purchase our products. We generally do not enter into purchase agreements that obligate our customers to purchase our products, and as a result, most of our sales are made on a purchase order basis. For example, we have no agreements with Wal-Mart that obligate Wal-Mart to purchase our products. If any of our customers experiences a significant downturn in its business, or fails to remain committed to our products or brands, the customer is generally under no contractual obligation to purchase our products and, consequently, may reduce or discontinue purchases from us. In the past, such actions have resulted in a decrease in sales and an increase in our inventory and have had an adverse effect on our business, results of operations and financial condition. If such actions occur again in the future, our business, results of operations and financial condition will likely be similarly affected. Further consolidation among our customer base and continued growth of our existing customers could result in increased pricing pressure, reduced floor space for our products and other changes that could be harmful to our business. In recent years there has been a growing trend toward retailer consolidation. As a result of this consolidation, the number of retailers to which we sell our products continues to decline and, as such, larger retailers are now able to exercise greater negotiating power when purchasing our products. Continued consolidation in the retail industry could result in further price and other competition that may damage our business. Additionally, as our customers grow larger, they increasingly may require us to provide them with some of our products on an exclusive basis, which could cause an increase in the number of stock keeping units, or “SKUs,” we must carry and, consequently, increase our inventory levels and working capital requirements. Moreover, as our customers consolidate and grow larger they may increasingly seek markdown allowances, incentives and other forms of economic support which reduce our gross margins and affect our profitability. Our financial performance is negatively affected by these pricing pressures when we are forced to reduce our prices without being able to correspondingly reduce our production costs. | EXCERPTS ON THIS PAGE:
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