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JSDA » Topics » Because our distributors are not required to place minimum orders with us, we need to carefully manage our inventory levels, and it is difficult to predict the timing and amount of our sales.These excerpts taken from the JSDA 10-K filed Mar 16, 2009. Because
our distributors are not required to place minimum orders with
us, we need to carefully manage our inventory levels, and it is
difficult to predict the timing and amount of our
sales.
Our independent distributors are not required to place minimum
monthly or annual orders for our products. In order to reduce
inventory costs, independent distributors endeavor to order
products from us on a “just in time” basis in
quantities, and at such times, based on the demand for the
products in a particular distribution area. Accordingly, there
is no assurance as to the timing or quantity of purchases by any
of our independent distributors or that any of our distributors
will continue to purchase products from us in the same
frequencies and volumes as they may have done in the past. In
order to be able to deliver our products on a timely basis, we
need to maintain adequate inventory levels of the desired
products, but we cannot predict the number of cases sold by any
of our distributors. If we fail to meet our shipping schedules,
we could damage our relationships with distributors
and/or
retailers, increase our shipping costs or cause sales
opportunities to be delayed or lost, which would unfavorably
impact our future sales and adversely affect our operating
results. In addition, if the inventory of our products held by
our distributors
and/or
retailers is too high, they will not place orders for additional
products, which would also unfavorably impact our future sales
and adversely affect our operating results.
Because
our distributors are not required to place minimum orders with
us, we need to carefully manage our inventory levels, and it is
difficult to predict the timing and amount of our
sales.
Our independent distributors are not required to place minimum
monthly or annual orders for our products. In order to reduce
inventory costs, independent distributors endeavor to order
products from us on a “just in time” basis in
quantities, and at such times, based on the demand for the
products in a particular distribution area. Accordingly, there
is no assurance as to the timing or quantity of purchases by any
of our independent distributors or that any of our distributors
will continue to purchase products from us in the same
frequencies and volumes as they may have done in the past. In
order to be able to deliver our products on a timely basis, we
need to maintain adequate inventory levels of the desired
products, but we cannot predict the number of cases sold by any
of our distributors. If we fail to meet our shipping schedules,
we could damage our relationships with distributors
and/or
retailers, increase our shipping costs or cause sales
opportunities to be delayed or lost, which would unfavorably
impact our future sales and adversely affect our operating
results. In addition, if the inventory of our products held by
our distributors
and/or
retailers is too high, they will not place orders for additional
products, which would also unfavorably impact our future sales
and adversely affect our operating results.
Because our distributors are not required to place minimum orders with us, we need to carefully manage our inventory levels, and it is difficult to predict the timing and amount of our sales. Our independent distributors are not required to place minimum monthly or annual orders for our products. In order to reduce inventory costs, independent distributors endeavor to order products from us on a “just in time” basis in quantities, and at such times, based on the demand for the products in a particular distribution area. Accordingly, there is no assurance as to the timing or quantity of purchases by any of our independent distributors or that any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. In order to be able to deliver our products on a timely basis, we need to maintain adequate inventory levels of the desired products, but we cannot predict the number of cases sold by any of our distributors. If we fail to meet our shipping schedules, we could damage our relationships with distributors and/or retailers, increase our shipping costs or cause sales opportunities to be delayed or lost, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventory of our products held by our distributors and/or retailers is too high, they will not place orders for additional products, which would also unfavorably impact our future sales and adversely affect our operating results. Our business plan and future growth is dependent in part on our distribution arrangements directly with retailers and national retail accounts. If we are unable to establish and maintain these arrangements, our results of operations and financial condition could be adversely affected. We currently have distribution arrangements with several large national retail accounts to distribute our products directly through their venues; these retailers include Barnes & Noble, Panera Bread Company, Ruby Tuesday and Alaska & Horizon Airlines. We believe that our “direct to retail” program has increased our national visibility among consumers; however, there are several risks associated with this distribution strategy. First, we do not have long-term agreements in place with any of these accounts and thus, the arrangements are terminable at any time by these retailers or us. The exception is our agreement with Alaska & Horizon Airlines which can be terminated with 120 days written notice from either party. Accordingly, we may not be able to maintain continuing relationships with any of these national accounts. A decision by any of these retailers, or any other large retail accounts we may obtain, to decrease the amount purchased from us or to cease carrying our products could have a material adverse effect on our reputation, financial condition and consolidated results of operations. For example, in 2008, Walmart stopped carrying our product line in its stores, which negatively impacted our sales and results of operations in 2008. In addition, we may not be able to establish additional distribution arrangements with other national retailers. Second, as we become more dependent on national retail chains, these retailers may assert pressure on us to reduce our pricing to them or seek significant product discounts. In general, our margins are lower on our sales to these customers because of these pressures. Any increase in our costs for these retailers to carry our product, reduction in price, or demand for product discounts could have a material adverse effect on our profit margin. Finally, our “direct to retail” distribution arrangements may have an adverse impact on our existing relationships with our independent regional distributors, who may view our “direct to retail” accounts as competitive with their business, making it more difficult for us to maintain and expand our relationships with independent distributors. This excerpt taken from the JSDA 10-K filed Mar 17, 2008. Because our distributors are not required to place minimum orders with us, we need to carefully manage our inventory levels, and it is difficult to predict the timing and amount of our sales. Our independent distributors are not required to place minimum monthly or annual orders for our products. In order to reduce inventory costs, independent distributors endeavor to order products from us on a “just in time” basis in quantities, and at such times, based on the demand for the products in a particular distribution area. Accordingly, there is no assurance as to the timing or quantity of purchases by any of our independent distributors or that any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. In order to be able to deliver our products on a timely basis, we need to maintain adequate inventory levels of the desired products, but we cannot predict the number of cases sold by any of our distributors. If we fail to meet our shipping schedules, we could damage our relationships with distributors and/or retailers, increase our shipping costs or cause sales opportunities to be delayed or lost, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventory of our products held by our distributors and/or retailers is too high, they will not place orders for additional products, which would also unfavorably impact our future sales and adversely affect our operating results.
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Table of ContentsThis excerpt taken from the JSDA 10-K filed Mar 14, 2007. Because our distributors are not required to place minimum orders with us, we need to carefully manage our inventory levels, and it is difficult to predict the timing and amount of our sales. Our independent distributors are not required to place minimum monthly or annual orders for our products. In order to reduce inventory costs, independent distributors endeavor to order products from us on a “just in
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Table of Contentstime” basis in quantities, and at such times, based on the demand for the products in a particular distribution area. Accordingly, there is no assurance as to the timing or quantity of purchases by any of our independent distributors or that any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past. We cannot predict the number of cases sold by any of our distributors. | EXCERPTS ON THIS PAGE:
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