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This excerpt taken from the VLG 10-K filed Sep 28, 2006. Suppliers
We purchase industrial gases pursuant to supply arrangements
having no minimum commitments and open purchase orders with four
of the five major gas producers in the United States. One such
producer accounted for approximately 38% of our gas purchases in
fiscal 2006. If any of these arrangements were terminated, we
believe that we would be able to readily secure an alternate
source of supply.
We purchase welding equipment and consumable supplies from a
number of vendors. Of these purchases, the top five vendors
represented approximately 60% of total purchases in fiscal 2006.
Purchases from major vendors are made pursuant to purchase
orders that are cancelable by us upon minimal notice. Large
volume purchasers, such as Valley, are generally able to
participate in vendor discount programs and obtain products at
competitive costs. We are able to purchase welding supplies from
vendors of our choosing.
We purchase propane from pipeline sources at various supply
points in our market areas from approximately five primary
vendors. One such vendor accounted for 59% of total propane
purchases in fiscal 2006, generally on a short-term basis at
prevailing market prices. We have historically been able to
adjust prices to reflect changes in product cost, which varies
with season and availability. We are not dependent upon any
single supplier for propane and supplies have historically been
readily available. Unlike small residential distributors of
propane, we also supply propane to commercial customers who
purchase propane throughout the year, and we believe the
year-round demand this creates causes us to be less susceptible
to allocation during periods of tight supply, which occurs from
time to time.
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