This financial review discusses the Company's financial condition, results of
operations, liquidity and capital resources and other matters. Dollars are
presented in thousands, except per share amounts. This review should be read in
conjunction with the accompanying Condensed Consolidated Financial Statements
and related notes included in this Form 10-Q and with the Company's Consolidated
Financial Statements and related notes and Management's
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Discussion and Analysis of Financial Condition and Results of Operations
included in the Company's Form 10-K for the year ended December 31, 2021 (the
"2021 Form 10-K").
Net product sales were $142,081 in second quarter 2022 compared to $114,560 in
second quarter 2021, an increase of $27,521 or 24.0%. First half 2022 net
product sales were $281,372 compared to $216,355 in first half 2021, an increase
of $65,017 or 30.1%. Domestic (U.S.) net product sales in second quarter and
first half 2022 increased 26.1% and 32.1%, respectively, compared to the
corresponding periods in the prior year, and, foreign net product sales,
including exports to foreign markets, increased 3.8% and 10.1%, respectively,
compared to the corresponding periods in the prior year. For the second quarter
and first half 2022, domestic sales represented 92.0% and 92.2%, respectively,
of total consolidated net product sales.
The sales growth in second quarter and first half 2022 sales was driven by an
overall increase in demand and reflects effective sales and marketing programs.
The Company had continuing improvement in customer orders and sales throughout
2021 and into first half 2022 as consumers returned to more activities and
lifestyles that they experienced prior to the Covid-19 pandemic. These
activities include planned purchases of the Company's products for "sharing" and
"give-a-way" occasions. Many of the Company's products are consumed at group
events, outings, and other gatherings which had been significantly curtailed or
in some cases eliminated in response to the Covid-19 pandemic. Both second
quarter and first half 2022 sales also benefited from the timing of some sales
which were rescheduled from the preceding periods due to some supply chain and
manufacturing delays that we experienced. Second quarter and first half 2022
sales also exceeded second quarter and first half 2019 sales by 34% and 36%,
respectively, which provides a sales comparison prior to the pandemic.
Although higher second quarter and first half 2022 sales contributed to improved
net earnings compared to corresponding prior year periods in 2021, significantly
higher input costs mitigated much of the benefits of these increased sales. When
compared to these prior year periods, second quarter and first half 2022 gross
profit margins and net earnings were adversely affected by significantly higher
costs for ingredients, packaging materials, freight and delivery, and many
manufacturing supplies and services. We also incurred additional costs,
including overtime and extended operating shifts for plant manufacturing, to
meet higher demand.
Product cost of goods sold were $95,402 in second quarter 2022 compared to
$75,948 in second quarter 2021, and first half 2022 product cost of goods sold
were $187,752 compared to $141,513 in first half 2021. Product cost of goods
sold includes $(865) and $263 of certain deferred compensation expenses
(credits) in second quarter 2022 and 2021, respectively, and $(1,134) and $416
of certain deferred compensation expenses (credits) in first half 2022 and 2021,
respectively. These deferred compensation expenses (credits) principally result
from the changes in the market value of investments and investment income from
trading securities relating to compensation deferred in previous years and are
not reflective of current operating results. Adjusting for the aforementioned,
product cost of goods sold increased from $75,685 in second quarter 2021 to
$96,267 in second quarter 2022, an increase of $20,582 or 27.2%; and increased
from $141,097 in first half 2021 to $188,886 in first half 2022, an increase of
$47,789 or 33.9%. As a percentage of net product sales, adjusted product cost of
goods sold was 67.8% and 66.1% in second quarter 2022 and 2021, respectively, an
unfavorable increase of 1.7 percentage points; and adjusted product cost of
goods sold was 67.1% and 65.2% in first half 2022 and 2021, respectively, an
unfavorable increase of 1.9 percentage points. Second quarter and first half
2022 adjusted product cost of goods sold as a percentage of sales were adversely
affected by increasing costs for ingredients, packaging materials, certain
manufacturing supplies and services, and plant utilities as discussed below.
The Company's product cost of goods sold as a percentage of sales were adversely
affected by increasing costs for ingredients, packaging materials and
manufacturing supplies and services as most of our supply contracts expired at
the end of 2021 and new supply agreements at higher prices became effective in
early 2022. In certain instances, we have expanded our annual commitments for
some ingredients from our suppliers to meet higher demand, however, certain
markets are very tight and this incremental expansion has and will continue to
result in even higher unit costs for these additional materials. Supply chain
challenges and limited availability of certain ingredients and materials, as
well as generally higher commodity markets, are driving up our costs for many
key ingredients and materials. The adverse effects of higher energy costs,
including higher fuel surcharges, have added to our input costs on both customer
and supplier freight and delivery in 2022. These higher energy costs have also
increased our costs for utilities to operate our manufacturing plants this year.
We expect these higher input costs to continue through the balance of 2022 and
are seeing even higher overall costs for ingredients and materials in 2023.
Although the above discussed higher
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costs for ingredients and packaging materials adversely affected results for
second quarter and first half 2022, higher volumes did provide some benefit as
certain plant manufacturing overhead costs are generally fixed and do not change
significantly when volume increases.
Our supply chain has continued to be extremely challenging in 2022, as our
supplier lead times have expanded greatly, or our suppliers have been unable to
meet promised delivery dates, some of which is due to rail and truck delivery
limitations and constraints. In some cases, we are unable to secure timely
delivery of additional ingredients and packaging materials to meet our higher
demand in 2022, and therefore, are limiting our customer sales order volumes of
some products. Company Management is continuing to focus on the supply chain and
possible delays and disruptions, but this area continues to have much less
predictability compared to past history. Although we are cautiously optimistic,
it is possible that supply chain disruptions could result in the temporary
shut-down of one or more manufacturing lines resulting in lost sales and profits
in 2022. The Company has been able to meet substantially all of its labor needs
to date for our seasonal increases in production and we believe that we will
meet this challenge in 2022, but again, the current tight labor market has
created more uncertainty than in the past.
Certain cost and expense reductions, which include Company initiatives to reduce
costs, mitigated some of the cost increase in adjusted product cost of goods
sold in second quarter and first half 2022 compared to the corresponding period
in the prior year. The Company is focused on the longer term and therefore is
continuing to make investments in plant manufacturing operations to meet new
consumer and customer product demands, achieve product quality improvements, and
increase operational efficiencies in order to provide genuine value to
consumers.
Selling, marketing and administrative expenses were $20,674 in second quarter
2022 compared to $32,378 in second quarter 2021, and first half 2022 selling,
marketing and administrative expenses were $47,747 compared to $59,187 in first
half 2021. Selling, marketing and administrative expenses include $(11,693) and
$5,208 of certain deferred compensation expenses (credits) in second quarter
2022 and 2021, respectively, and $(17,029) and $8,244 of certain deferred
compensation expenses in first half 2022 and 2021, respectively. As discussed
above, these expenses (credits) principally result from changes in the market
value of investments and investment income from trading securities relating to
compensation deferred in previous years, and are not reflective of current
operating results. Adjusting for the aforementioned deferred compensation
expenses (credits), selling, marketing and administrative expenses increased
from $27,170 in second quarter 2021 to $32,367 in second quarter 2022, an
increase of $5,197 or 19.1%; and selling, marketing and administrative expenses
increased from $50,943 in first half 2021 to $64,776 in first half 2022 an
increase of $13,833 or 27.2%. As a percentage of net product sales, adjusted
selling, marketing and administrative expenses decreased from 23.7% in second
quarter 2021 to 22.8% in second quarter 2022, a favorable decrease of 0.9
percentage points as a percent of net product sales, and adjusted selling,
marketing and administrative expenses decreased from 23.5% in first half 2021 to
23.0% in first half 2022, a favorable decrease of 0.5 percentage points as a
percent of net sales. The aforementioned more favorable expenses as a percentage
of sales reflect the benefits of higher sales against certain expenses that are
generally fixed and do not change significantly with changes in sales volumes.
Selling, marketing and administrative expenses include $14,156 and $12,437 for
customer freight, delivery and warehousing expenses in second quarter 2022 and
2021, respectively, an increase of $1,719 or 13.8%, and $30,694 and $22,576 in
first half 2022 and 2021, respectively, an increase of $8,118 or 36.0%. These
expenses were 10.0% and 10.9% of net product sales in second quarter 2022 and
2021, respectively, and were 10.9% and 10.4% of net product sales in first half
2022 and 2021, respectively. The aforementioned increase in first half 2022
expense principally reflects increasing costs for over-the-road carriers
relating to customer freight and delivery, including higher diesel fuel prices
which are passed on to us in higher fuel surcharges. Labor shortages in the
trucking industry have also are contributed to higher freight and delivery costs
in first half 2022.
Earnings from operations were $26,978 in second quarter 2022 compared to $6,904
in second quarter 2021, and were $47,813 in first half 2022 compared to $17,314
in first half 2021. Earnings from operations include $(12,558) and $5,471 of
certain deferred compensation expenses (credits) in second quarter 2022 and
2021, respectively, and include $(18,163) and $8,660 of certain deferred
compensation expenses (credits) in first half 2022 and 2021, respectively, which
is discussed above. Adjusting for these deferred compensation costs and expenses
(credits), adjusted earnings from operations were $14,420 and $12,375 in second
quarter 2022 and 2021, respectively, an increase of $2,045 or 16.5%; and
adjusted operating earnings were $29,650 and $25,974 in first half 2022 and
2021, respectively, an increase of $3,676 or 14.2%. As a percentage of net
product sales, these adjusted operating earnings were 10.1% and
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10.8% in second quarter 2022 and 2021, respectively, an unfavorable decrease of
0.7 percentage points; and as a percentage of net product sales, these adjusted
operating earnings were 10.5% and 12.0% in first half 2022 and 2021,
respectively, an unfavorable decrease of 1.5 percentage points as a percentage
of net product sales. Although higher second quarter and first half 2022 sales
contributed to improved operating earnings compared to the corresponding prior
year periods, higher input costs, as discussed above, mitigated much of the
benefits of increased sales. The Company uses the Last-In-First-Out (LIFO)
method of accounting for inventory and costs of goods sold which results in
lower current income taxes during such periods of increasing costs, but this
method does charge the most current costs to cost of goods sold and thereby
accelerates the realization of these higher costs. Although the LIFO method
generally provides higher current income tax benefits, this acceleration of
increasing costs does adversely impact reported results until such time as costs
stabilize or decrease.
In response to these higher input costs many companies in the consumer products
industry have announced increases in selling prices. We have followed with price
increases as well with the objective of improving sales price realization and
restoring some of our margin declines. Price increases were phased in
principally during fourth quarter 2021 and first quarter 2022. Although our
price increases generally reflect the overall price increases in our industry,
they have not resulted in restoring our margins to historical levels. The
Company has observed that the confectionary industry is currently pursuing
additional price increases to offset continuing increases in input costs, and we
will be pursuing further pricing actions as well. Although the Company continues
to monitor these higher input costs and price increases in the industry, we are
mindful of the effects and limits of passing on all of the above discussed
higher input costs to consumers of our products.
Management believes the comparisons presented in the preceding paragraphs, after
adjusting for changes in deferred compensation, are more reflective of the
underlying operations of the Company.
Other income (loss), net was $(11,137) in second quarter 2022 compared to $6,244
in second quarter 2021, and $(16,153) in first half 2022 compared to $10,060 in
first half 2021. Other income, net for second quarter 2022 and 2021 includes net
gains (losses) and investment income of $(12,558) and $5,471, respectively, on
trading securities which provide an economic hedge of the Company's deferred
compensation liabilities; and other income, net for first half 2022 and 2021
includes net gains (losses) and investment income of $(18,163) and $8,660,
respectively, on trading securities. The aforementioned investment losses in
second quarter and first half 2022 reflect the overall declines in the equity
markets during these periods. These changes in market values were substantially
offset by a like amount of deferred compensation expense included in product
cost of goods sold and selling, marketing, and administrative expenses in the
respective periods as discussed above.
Other income (loss), net for second quarter 2022 and 2021 includes investment
income on available for sale securities of $513 and $670 in 2022 and 2021,
respectively; and other income, net for first half 2022 and 2021 includes
investment income on available for sale securities of $1,069 and $1,386 in 2022
and 2021, respectively. Other income (loss), net also includes pre-tax gain
(loss) on foreign exchange of $662 and $(268) in second quarter 2022 and 2021,
respectively, and $510 and $(235) in first half 2022 and 2021, respectively.
The consolidated effective tax rates were 24.4% and 25.5% in second quarter 2022
and 2021, respectively, and 24.2% and 24.9% in first half 2022 and 2021,
respectively.
Net earnings attributable to Tootsie Roll Industries, Inc. were $11,989 (after
$8 net loss attributed to non-controlling interests) in second quarter 2022
compared to $9,794 (after $2 net loss attributed to non-controlling interests)
in second quarter 2021, and earnings per share were $0.17 and $0.14 in second
quarter 2022 and 2021, respectively, an increase of $0.03 per share, or 21.4%.
First half 2022 net earnings attributable to Tootsie Roll Industries, Inc. were
$24,016 (after $16 net loss attributed to non-controlling interests) compared to
first half 2021 net earnings of $20,561 (after $6 net loss attributed to
non-controlling interests), and net earnings per share were $0.35 and $0.29 in
first half 2022 and first half 2021, respectively, an increase of $0.06 per
share or 20.7%. Earnings per share attributable to Tootsie Roll Industries, Inc.
for second quarter 2022 and first half benefited from the reduction in average
shares outstanding resulting from purchases in the open market by the Company of
its common stock. Average shares outstanding decreased from 69,570 at second
quarter 2021 to 68,945 at second quarter 2022, and from 69,712 in first half
2021 to 68,989 in first half 2022.
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Goodwill and intangibles, principally trademarks, are assessed annually as of
December 31 or whenever events or circumstances indicate that the carrying
values may not be recoverable from future cash flows. The Company has not
identified any triggering events, as defined, or other adverse information that
would indicate a material impairment of its goodwill or intangibles in first
half 2022. Although Company management has not identified any trigging events at
this time relating to its intangibles, the ultimate effects of the Covid-19
pandemic, including possible longer term effects on consumer lifestyles and
behavior, could change this assessment in the future, as outlined in the
Company's risk factors discussed on Form 10-K for the year ended December 31,
2021.
Beginning in 2012, the Company received periodic notices from the Bakery and
Confectionery Union and Industry International Pension Fund (Plan), a
multi-employer defined benefit pension plan for certain Company union employees,
that the Plan's actuary certified the Plan to be in "critical status", as
defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty
Corporation (PBGC); and that a plan of rehabilitation was adopted by the
trustees of the Plan in 2012. The Plan's status was changed to "critical and
declining status", as defined by the PPA and PBGC, for the plan year beginning
January 1, 2015, and this status continues to date. A designation of "critical
and declining status" implies that the Plan is expected to become insolvent in
the next 20 years.
Based on these updated notices, the Plan's funded percentage (plan investment
assets as a percentage of plan liabilities), as defined, were 48.5%, 48.3%, and
50.4% as of the most recent valuation dates available, January 1, 2021, 2020,
and 2019, respectively (these valuation dates are as of the beginning of each
Plan year). These funded percentages are based on actuarial values, as defined,
and do not reflect the actual market value of Plan investments as of these
dates. If the market value of investments had been used as of January 1, 2021
the funded percentage would be 52.8% (not 48.5%). As of the January 1, 2021
valuation date (most recent valuation available), only 15% of Plan participants
were current active employees, 54% were retired or separated from service and
receiving benefits, and 31% were retired or separated from service and entitled
to future benefits. The number of current active employee Plan participants as
of January 1, 2021 fell 6% from the previous year and 10% over the past two
years. When compared to the Plan valuation date of January 1, 2011 (just prior
to the Plan being certified to be in "critical status"), current active employee
participants have declined 52%, whereas participants who were retired or
separated from service and receiving benefits increased 3% and participants who
were retired or separated from service and entitled to future benefits increased
10%.
The Company has been advised that its withdrawal liability would have been
$104,300, $99,300 and $99,800 if it had withdrawn from the Plan during 2021,
2020 and 2019, respectively. The Company's relative share of the Plan's
contribution base, driven by employer withdrawals, has increased for the last
several years, and management believes that this trend could continue
indefinitely which will continue to add upward pressure on the Company's
withdrawal liability. Based on the above, including the Plan's projected
insolvency in the future, Management believes that the Company's withdrawal
liability could increase further in future years.
Based on the Company's updated actuarial study and certain provisions in ERISA
and the law relating to withdrawal liability payments, management believes that
the Company's liability would likely be limited to twenty annual payments of
$2,793 which have a present value in the range of $32,800 to $46,600 depending
on the interest rate used to discount these payments. While the Company's
actuarial consultant does not believe that the Plan will suffer a future mass
withdrawal (as defined) of participating employers, in the event of a mass
withdrawal, the Company's annual withdrawal payments would theoretically be
payable in perpetuity. Based on the Company's updated actuarial study, the
present value of such perpetuities is in the range of $45,764 to $142,447 and
would apply in the unlikely event that substantially all employers withdraw from
the Plan. The aforementioned is based on a range of valuations and interest
rates which the Company's actuary has advised is provided under the statute.
Should the Company actually withdraw from the Plan at a future date, a
withdrawal liability, which could be higher than the above discussed amounts,
could be payable to the Plan.
The Company's union contract requires that the Company continue its
participation in this Plan through September 2022, the expiration of the current
union contract. The amended rehabilitation plan, which also continues, required
that employer contributions include 5% compounded annual surcharge increases
each year for an unspecified period of time beginning in 2012 as well as certain
plan benefit reductions. In fourth quarter 2020, the Plan Trustees advised the
Company that the surcharges would no longer increase annually and therefore be
"frozen" at the rates and amounts in effect as of December 31, 2020 provided
that the local bargaining union and the Company executed a formal consent
agreement by March 31, 2021. The Trustees advised that they have concluded that
continuing increases in surcharges
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would likely have a long-term adverse effect on the solvency of the Plan. The
Trustees concluded that further increases would result in increasing financial
hardships and withdrawals of participating employers, and that this change will
not have a material effect on the Plan's insolvency date. In first quarter 2021,
the local bargaining union and the Company executed this agreement which
resulted in the "freezing" of such surcharges as of December 31, 2020.
The Plan recently advised the Company that it will be applying for benefits
available to financial troubled plans under the American Rescue Plan Act of
2021. Company management understands that this legislation would provide
financial assistance from the PBGC to shore up financially distressed
multi-employer plans to ensure that they can remain solvent and continue to pay
benefits to retirees through 2051 without any reduction in retiree benefits.
Nonetheless, the Company's actuary believes that given the Plan's projected
insolvency date of 2031 as well as other factors, that it still remains unclear
if the Plan can remain solvent through the targeted date of 2051. The Company's
actuary also advised that the regulations under the aforementioned PBGC
financial assistance could result in a higher withdrawal liability even with
PBGC financial assistance. The Company is currently unable to determine the
ultimate outcome of the above discussed multi-employer union pension matter and
therefore is unable to determine the effects on its consolidated financial
statements, but the ultimate outcome could be material to its consolidated
results of operations or cash flows in one or more future periods. See also Note
7 of the Company's Note to Consolidated Financial Statements on Form 10-K for
the year ended December 31, 2021.
The Company's pension expense for this Plan for first half 2022 and 2021 was
$1,822 and $1,557, respectively ($3,156 and $2,866 for twelve months 2021 and
2020, respectively). The aforementioned expense includes surcharges (reflecting
the "frozen" surcharge rate) of $642 and $549 for first half 2022 and 2021,
respectively ($1,112 and $1,010 for twelve months 2021 and 2020, respectively),
as required under the amended plan of rehabilitation.
The Company continues to actively monitor the Covid-19 pandemic, including
existing and developing variants and subvariants, and its potential impact on
our operations and financial results, prioritizing employee health and safety.
The effects of the Covid-19 pandemic are unprecedented, and therefore the
Company is unable to determine the related effects on its sales and net earnings
for the balance of 2022 and beyond. Because the Company has a sizable investment
in marketable securities (see Liquidity and Capital Resources section below),
the Company continues to be well positioned financially to respond to any
further adverse effects of this pandemic in the short and intermediate-terms, as
well as for a longer period of time, if necessary.
LIQUIDITY AND CAPITAL RESOURCES
Net cash flows provided by operating activities were $617 and $10,778 in first
half 2022 and 2021, respectively, an unfavorable decrease of $10,161. The
$10,161 decrease in cash flows from operating activities from 2021 to 2022
reflects significantly higher production and inventory levels, including the
effects of higher costs for materials as discussed above, resulting in more cash
used in inventories in first half 2022. The Company anticipates increased demand
to continue though the Halloween season and is building inventories to meet this
higher demand in second half 2022. In addition, changes in net cash flows in
first half 2022 reflects higher earnings as well as the timing of sales and
collections of accounts receivable and the timing of payments relating to
accounts payable and accrued liabilities.
Net cash used in investing activities was $42,839 in first half 2022 compared to
$52,060 in first half 2021. Cash flows used in investing activities reflect
$57,731 and $58,154 of purchases of available for sale securities during first
half 2022 and 2021, respectively, and $25,993 and $19,798 of sales and
maturities of available for sale securities during first half 2022 and 2021,
respectively. First half 2022 and 2021 investing activities include capital
expenditures of $10,194 and $12,327, respectively. The Company has committed
approximately $30,000 to a rehabilitation upgrade and expansion of one of its
manufacturing plants in the U.S. The Company spent approximately $15,000, $6,000
and $2,000 in 2021, 2020 and 2019, respectively, on the aforementioned project
and expects additional cash outlays for this project to approximate $7,000 in
2022. All capital expenditures have been or are expected to be funded from the
Company's cash flow from operations and internal sources including available for
sale securities.
The Company's consolidated financial statements include bank borrowings of
$1,020 and $986 at June 30, 2022 and 2021, respectively, all of which relates to
its Spanish subsidiary. The Company had no other outstanding bank borrowings at
June 30, 2022.
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Financing activities include Company common stock purchases and retirements of
$5,023 and $17,181 in first half 2022 and 2021, respectively. Cash dividends of
$12,237 and $12,034 were paid in first half 2022 and 2021, respectively.
The Company's current ratio (current assets divided by current liabilities) was
3.4 to 1 at June 30, 2022 compared to 3.4 to 1 at December 31, 2021 and 3.7 to 1
at June 30, 2021. Net working capital was $198,283 at June 30, 2022 compared to
$188,333 and $201,867 at December 31, 2021 and June 30, 2021, respectively. The
aforementioned net working capital amounts are principally reflected in
aggregate cash and cash equivalents and short-term investments of $123,090 at
June 30, 2022 compared to $145,808 and $139,201 at December 31, 2021 and June
30, 2021, respectively. In addition, long term investments, principally debt
securities comprising corporate bonds, were $258,075 at June 30, 2022, as
compared to $291,175 and $264,693 at December 31, 2021 and June 30, 2021,
respectively. Aggregate cash and cash equivalents and short and long-term
investments were $381,165, $436,983, and $403,894, at June 30, 2022, December
31, 2021 and June 30, 2021, respectively. The aforementioned includes $72,480,
$89,736, and $83,867 at June 30, 2022, December 31, 2021 and June 30, 2021,
respectively, relating to trading securities which are used as an economic hedge
for the Company's deferred compensation liabilities. Investments in available
for sale securities, primarily high quality corporate bonds, that matured during
first half 2022 and 2021 were generally used to purchase the Company's common
stock or were replaced with debt securities of similar maturities.
The Company periodically contributes to a VEBA trust, managed and controlled by
the Company, to fund the estimated future costs of certain employee health,
welfare and other benefits. The Company is currently using these VEBA funds to
pay the actual cost of such benefits through most of 2022. The VEBA trust held
$3,050, $3,941 and $7,549 of aggregate cash and cash equivalents at June 30,
2022, December 31, 2021 and June 30, 2021, respectively. This asset value is
included in prepaid expenses and long-term other assets in the Company's
Consolidated Statement of Financial Position. These assets are categorized as
Level 2 within the fair value hierarchy.
ACCOUNTING PRONOUNCEMENTS
See Note 1 of the Company's Condensed Consolidated Financial Statements.
FORWARD-LOOKING STATEMENTS
This discussion and certain other sections contain forward-looking statements
that are based largely on the Company's current expectations and are made
pursuant to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by the use of
words such as "anticipated," "believe," "expect," "intend," "estimate,"
"project," "plan" and other words of similar meaning in connection with a
discussion of future operating or financial performance and are subject to
certain factors, risks, trends and uncertainties that could cause actual results
and achievements to differ materially from those expressed in the
forward-looking statements. Such factors, risks, trends and uncertainties, which
in some instances are beyond the Company's control, include the overall
competitive environment in the Company's industry, supply chain disruptions,
inflationary pricing pressures and changes in assumptions and judgments
discussed above under the heading "Significant Accounting Policies and
Estimates," and factors identified and referred to above under the heading "Risk
Factors" in this report and under the heading "Risk Factors" in the Company's
2021 Form 10-K.
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