1 unchanged sentence
For a discussion of market risks that could affect the Company, refer to the risk factors disclosed in Item 1A.
−Removed: of Part 1 of the Company’s Annual Report on Form 10-K for the year ended April 2, 2023.
+Added: of Part 1 of the Company’s Annual Report on Form 10-K for the year ended April 2, 2023.
INTEREST RATE RISK
−Removed: As of October 1, 2023, the Company had $9.8 million of indebtedness that bears interest at a variable rate, comprised of borrowings under the revolving line of credit.
−Removed: Based upon this level of outstanding debt, the Company’s annual net income would decrease by approximately $77,000 for each increase of one percentage point in the interest rate applicable to the debt.
+Added: As of December 31, 2023, the Company had $10.0 million of indebtedness that bears interest at a variable rate, comprised of borrowings under the revolving line of credit.
+Added: Based upon this level of outstanding debt, the Company’s annual net income would decrease by approximately $79,000 for each increase of one percentage point in the interest rate applicable to the debt.
COMMODITY RATE RISK
The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China.
−Removed: The Company’s exposure to commodity price risk primarily relates to changes in the prices in China of cotton, oil and labor, which are the principal inputs used in a substantial number of the Company’s products.
+Added: The Company’s exposure to commodity price risk primarily relates to changes in the prices in China of cotton, oil and labor, which are the principal inputs used in a substantial number of the Company’s products.
In addition, although the Company pays its Chinese suppliers in U.S.
dollars, a strengthening of the rate of the Chinese currency versus the U.S.
−Removed: dollar could result in an increase in the cost of the Company’s finished goods.
−Removed: There is no assurance that the Company could timely respond to such increases by proportionately increasing the prices at which its products are sold to the Company’s customers.
+Added: dollar could result in an increase in the cost of the Company’s finished goods.
+Added: There is no assurance that the Company could timely respond to such increases by proportionately increasing the prices at which its products are sold to the Company’s customers.
MARKET CONCENTRATION RISK
−Removed: The Company’s financial results are closely tied to sales to its top two customers, which represented approximately 71% of the Company’s gross sales in fiscal year 2023.
−Removed: In addition, 40% of the Company’s gross sales in fiscal year 2023 consisted of licensed products, which included 29% of sales associated with the Company’s license agreements with affiliated companies of the Walt Disney Company.
−Removed: The Company’s results could be materially impacted by the loss of one or more of these licenses.
+Added: The Company’s financial results are closely tied to sales to its top two customers, which represented approximately 71% of the Company’s gross sales in fiscal year 2023.
+Added: In addition, 40% of the Company’s gross sales in fiscal year 2023 consisted of licensed products, which included 29% of sales associated with the Company’s license agreements with affiliated companies of the Walt Disney Company (“Disney”).
+Added: As of January 30, 2024, three of the license agreements with Disney that expired on December 31, 2023 were renewed.
+Added: With regard to the one license agreement that had not yet been renewed as of that date, the Company and Disney agreed to continue to operate under the terms of the expired license agreement.
+Added: The Company’s results could be materially impacted by the loss of one or more of these licenses.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.