FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including the Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections, contains forward-looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. Forward-looking statements include information concerning the possible or assumed future results of operations of the Company and those statements preceded by, followed by or that include the words "future," "position," "anticipate(s)," "expect(s)," "believe(s)," "see," "plan," "further improve," "outlook," "should" or similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions.
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It should be understood that the following important factors, in addition to those discussed elsewhere in this document, could affect the future results of the Company and could cause those results to differ materially from those expressed in our forward-looking statements:
risks associated with the threat or occurrence of epidemics or pandemics (such
as the recent COVID-19 or coronavirus outbreak) or other public health issues,
including the continued health of our employees and management, the imposition
of governmental orders restricting our operations and the activities of our ? employees, suppliers and customers and the reduced demand for our goods and
services, in particular, disruptions to our supply chain or our ability to
procure products or fulfill orders due to disruptions in our warehouse
operations, or increased credit risk from customer credit defaults resulting
from an economic downturn,
risks associated with the acquisition of assets or new businesses or
investments in equity investees by either of our business segments including, ? but not limited to, risks associated with purchase price and business valuation
risks, vendor and customer retention risks, employee and technology integration
risks, and risks related to the assumption of certain liabilities or
obligations,
increasing competition and market conditions in our wholesale and retail health ? food businesses and any associated impact on the carrying value and any
potential impairment of assets (including intangible assets) within those
businesses,
? that our repositioning strategy for our retail business will not be successful,
? risks associated with opening new retail stores,
if online shopping formats such as Amazon™ continue to grow in popularity and ? further disrupt traditional sales channels, it may present a significant direct
risk to our brick and mortar retail business and potentially to our wholesale
distribution business,
the potential impact of ongoing, decreasing, or changing trade tariff and trade ? policies may have on our product costs or on consumer disposable income and
demand,
? increases in operational costs, including the cost of maintaining a
refrigerated trucking fleet and general business insurance costs,
the risks associated with a competitive labor market, particularly for truck ? drivers and warehouse workers, which may impact our ability to recruit and
retain employees and result in higher employee compensation costs,
? increases in state and federal excise taxes on cigarette and tobacco products
and the potential impact on demand,
? higher commodity prices and general inflation which could impact food
ingredient costs and demand for many of the products we sell,
regulations, potential bans and/or litigation related to the manufacturing, ? distribution, and sale of certain cigarette, tobacco, and e-cigarette/vaping
products by the
local governmental agencies, or other parties,
? increases in inventory carrying costs and customer credit risks,
? changes in pricing strategies and/or promotional/incentive programs offered by
cigarette and tobacco manufacturers,
? demand for the Company's products, particularly cigarette, tobacco and
e-cigarette/vaping products,
? risks that product manufacturers may begin selling directly to convenience
stores and bypass wholesale distributors,
? changes in laws and regulations and ongoing compliance related to health care
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? increasing health care costs for both the Company and consumers and its
potential impact on discretionary consumer spending,
? decreased availability of capital resources,
? domestic regulatory and legislative risks,
? poor weather conditions, and the adverse effects of climate change,
? consolidation trends within the convenience store, wholesale distribution, and
retail health food industries,
natural disasters and domestic or political unrest, or any restrictions, ? regulations, or security measures implemented by governmental bodies in
response to these items,
? other risks over which the Company has little or no control, and any other
factors not identified herein.
Changes in these factors could result in significantly different results. Consequently, future results may differ from management's expectations. Moreover, past financial performance should not be considered a reliable indicator of future performance. Any forward-looking statement contained herein is made as of the date of this document. Except as required by law, the Company undertakes no obligation to publicly update or correct any of these forward-looking statements in the future to reflect changed assumptions, the occurrence of material events or changes in future operating results, financial conditions or business over time.
IMPACT OF COVID-19 (CORONAVIRUS) ON OUR BUSINESS
In
The Company continues to monitor medical, regulatory and consumer developments, and community-based regulations, however, we cannot predict the long-term effects on our business, including our financial position or results of operations, if governmental restrictions such as Stay-At-Home orders or other such directives continue or are reinstated for a prolonged period of time and materially disrupt comsumer demand, our supply chain or our ability to procure products or fulfill orders due to disruptions in our warehouse operations.
CRITICAL ACCOUNTING ESTIMATES
Certain accounting estimates used in the preparation of the Company's condensed
consolidated unaudited financial statements ("financial statements") require us
to make judgments and estimates and the financial results we report may vary
depending on how we make these judgments and estimates. Our critical accounting
estimates are set forth in our annual report on Form 10-K for the fiscal year
ended
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FIRST FISCAL QUARTER 2021 (Q1 2021)
The following discussion and analysis includes the Company's results of
operations for the three months ended
Wholesale Segment
Our Wholesale Segment is one of the largest wholesale distributors in
Our Wholesale Segment offers retailers the ability to take advantage of manufacturer and Company sponsored sales and marketing programs, merchandising and product category management services, and the use of information systems and data services that are focused on minimizing retailers' investment in inventory, while seeking to maximize their sales and profits. In addition, our wholesale distributing capabilities provide valuable services to both manufacturers of consumer products and convenience retailers. Manufacturers benefit from our broad retail coverage, inventory management, efficiency in processing small orders, and frequency of deliveries. Convenience retailers benefit from our distribution capabilities by gaining access to a broad product line, inventory optimization and merchandising expertise, information systems, and accessing trade credit.
Our Wholesale Segment operates six distribution centers located in
Retail Segment
Our Retail Segment, through our
We operate within the natural products retail industry, which is a subset of the
Our Retail Segment operates twenty-one retail health food stores as
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