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VLG » Topics » The unionization of part of our workforce may adversely affect our operating results.This excerpt taken from the VLG 10-K filed Sep 28, 2006. The
unionization of part of our workforce may adversely affect our
operating results.
Approximately 13% of our employees are currently covered by
collective bargaining agreements. We are required to negotiate
the wages, salaries, benefits and other terms with these
employees collectively. Our results of operations could be
adversely affected by labor negotiations
and/or labor
disputes in the future, particularly if a greater portion of our
workforce joins a union.
We are
dependent upon relatively few suppliers and if one or more of
these suppliers discontinued sales to us, our operations might
be temporarily interrupted.
There are several competing suppliers of most of the products
that we purchase, although for business reasons we have
concentrated our purchases with only a few suppliers. We
purchase industrial gases pursuant to supply arrangements and
open purchase orders with four of the five major gas producers
in the United States. The largest such producer accounted for
approximately 38% of our gas purchases in fiscal 2006. We
purchase welding equipment and consumable supplies from a number
of vendors, of which the top five vendors represented
approximately 60% of our total purchases in fiscal 2006. We
purchased 59% of our propane from a single supplier in fiscal
2006. Although we believe that supplies have historically been
readily available, if one or more of these suppliers were to
unexpectedly discontinue sales of a product to us, we would have
to secure alternate sources of supply, and we could experience
decreases in our profit margins if our arrangements with such
alternate sources
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of supply were less favorable than those with our current
suppliers and a decrease in our revenue if we were unable to
obtain a sufficient supply of product.
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