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Changing consumer preferences, habits, perceptions of certain nutritional snacking products and discretionary spending may negatively affect our brand loyalty, purchase frequency rate and net sales, and materially and adversely affect our business, financial condition and results of operations.
−Removed: We focus on products we believe have positive effects on health and compete in a market that relies on innovation and evolving consumer preferences.
−Removed: The packaged food industry in general, and the nutritional snacking industry in particular, is subject to changing consumer trends, demands and preferences and emerging nutrition science is constantly evolving.
−Removed: Products, ingredients, or methods of eating once considered healthy may become disfavored by consumers, scientifically disproven or no longer be perceived as healthy.
+Added: We develop, market and sell products we believe have positive effects on health and compete in a market that relies on innovation and evolving consumer preferences.
+Added: The packaged food industry in general, and the nutritional snacking industry in particular, is subject to changing consumer trends, demands and preferences and nutrition science is constantly evolving.
+Added: Products, ingredients, or methods of eating once considered healthy may become disfavored by consumers, scientifically questioned or no longer be perceived as healthy.
Trends within the food industry change over time and our failure to anticipate, identify or react to changes in these trends could, among other things, lead to reduced consumer demand, shelf or retail space and price reductions, and could materially and adversely affect our business, financial condition and results of operations.
Additionally, certain ingredients used in our products may become negatively perceived by consumers for a variety of reasons, resulting in reformulation of existing products to remove such ingredients, which may negatively affect the taste or other qualities of our products.
−Removed: Factors that may affect consumer perception of healthy products include dietary trends and attention to different nutritional aspects of foods, concerns regarding the health effects of specific ingredients and nutrients, trends away from specific ingredients and processing in products and increasing awareness of the environmental and social effects of product production.
+Added: Factors that may affect consumer perception of healthy products include dietary trends and attention to different nutritional aspects of foods, concerns regarding the health effects of specific ingredients and nutrients, regulations on certain ingredients, trends away from specific ingredients and processing in products and increasing awareness of the environmental and social effects of product production.
Consumer perceptions of the nutritional profile of our products and related eating practices may shift.
−Removed: Consumers may also no longer perceive products with fewer carbohydrates, higher levels of protein, higher levels of fat, or additional fiber or which contain alternative sweeteners as healthy or needed to achieve personal weight management, wellness, or fitness goals.
−Removed: Adverse messaging in the media, including social media, or within certain influencer communities, relating to the marketing of nutritional snacking products or weight-related dietary programs may adversely affect the overall consumer impression of certain of our products, programs or brands, which may materially and adversely affect our business.
+Added: Consumers may also no longer perceive products with fewer carbohydrates, higher levels of protein, higher levels of fat, or additional fiber or which contain alternative sweeteners as healthy or needed to achieve personal weight management, wellness, lifestyle, or fitness goals.
+Added: Adverse messaging in the media, including social media, or within certain influencer communities, relating to the marketing of nutritional snacking products or weight-related dietary programs may adversely affect the overall consumer impression of certain products, programs or brands, which may materially and adversely affect our business.
Approaches regarding nutritional approaches and healthy lifestyles are the subject of numerous studies and publications, often with differentiating views and opinions, some of which may be adverse to us.
Conflicting scientific information on what constitutes good nutrition, or the benefits of certain dietary approaches may also materially and adversely affect our business.
−Removed: Our success depends, in part, on our ability to advance sound nutrition research and to anticipate the tastes and dietary habits of consumers and other consumer trends and to offer products with marketing messaging that appeal to their needs and preferences on a timely and affordable basis.
+Added: Our success depends, in part, on our ability to advance sound nutrition research and to anticipate the tastes and dietary habits of consumers and other consumer trends and to offer products with marketing that appeals to their needs and preferences on a timely and affordable basis.
A change in consumer discretionary spending, due to inflationary pressures, economic downturn or other reasons may also materially and adversely affect our sales, and our business, financial condition and results of operations.
−Removed: Our operations are dependent on a global supply chain and effects of supply chain constraints and inflationary pressure on us or our suppliers could adversely affect our operating results.
+Added: We may not be able to compete successfully in the highly competitive nutritional snacking industry.
+Added: Our business is committed to providing people a more nutritious way to eat.
+Added: We compete in the nutritional snacking industry, which is included in the general snack foods industry.
+Added: The nutritious snacking industry is large and intensely competitive.
+Added: Competitive factors in the nutritional snacking industry include product quality, taste, texture, brand awareness among consumers, nutritional content, the sourcing and degree of processing of ingredients, innovation of “on-trend” snacks, variety of snacks offered, allergen profile, grocery aisle placement, access to retailer shelf space, price, advertising and promotion, product packaging and package design.
+Added: We compete in this market against numerous multinational, regional and local companies principally based on our nutritional content, product taste and quality, our brand recognition and loyalty, marketing, advertising, price and the ability to satisfy specific consumer dietary needs.
+Added: An increasing focus on macronutrient-focused products in the marketplace will likely increase these competitive pressures within the category in future periods.
+Added: Our competitors in the nutritional snacking industry include companies selling protein bars, chips, confections, shakes and nutritional supplements often with a focus on specific dietary approaches such as keto, paleo, vegan, gluten free, vegetarian and others.
+Added: Views towards nutritional snacking, weight loss and management, and other nutritional approaches, are cyclical and trendy, with constantly changing consumer perceptions.
+Added: Besides remaining competitive through the quality of our products and consumer perceptions of the effectiveness of a low-carb, low-sugar and protein-rich eating approach, both our brands must continue to be viewed favorably, or our business and reputation may be materially and adversely affected.
+Added: If other nutritional approaches become more popular, or are generally perceived to be more effective, we may not be able to compete effectively.
+Added: In addition, public opinion on the use of chronic weight management medication continues to shift significantly as the popularity of clinical solutions grows and more weight management medications are approved by the FDA.
+Added: Moreover, the growing acceptance and use of medication to manage weight could negatively affect the demand for many types of food in general and our
+Added: If the use of weight management medication becomes more popular and more widely used and we are unable to communicate effectively to consumers how our products can support achieving or maintaining their weight management goals, our business could be materially and adversely affected.
+Added: Some of our competitors have resources substantially greater than we have and market and sell brands that may be more widely recognized than our brands.
+Added: Our current and potential competitors may offer products similar to our products, a wider range of products than we offer, and may offer such products at more competitive prices than we do.
+Added: Local or regional markets often have significant additional competitors, many of whom offer products similar to ours and may have unique ties to regional or national retail chains.
+Added: Any increased competition from new entrants into the nutritional snacking industry or any increased success by existing competition could cause reductions in our sales, require us to reduce our prices, or both, which could materially and adversely affect our business, financial condition and results of operations.
+Added: Our operations are dependent on a global supply chain and the effects of supply chain constraints and inflationary pressure on us, or our suppliers could adversely affect our operating results.
Our operations and the operations of our contract manufacturers have been, and may continue to be, affected by supply chain constraints and packaging, ingredient and labor challenges resulting in increased costs.
−Removed: The continuing uncertain economic environment, and macroeconomic and geopolitical events and trends may increase these risks.
−Removed: In addition, current or future governmental policies may increase the risk of further inflation, which could further increase the costs of ingredients, packaging and finished goods for our business.
+Added: The continuing uncertain economic environment, and macroeconomic and geopolitical events and trends may increase or prolong these risks.
+Added: In addition, current or future governmental policies or regulations or the effects on certain ingredients resulting from climate change or regulations associated with combating climate change may increase the risk of further inflation, which could further increase the costs of ingredients, packaging and finished goods for our business.
Similarly, if costs of goods and labor continue to increase, our suppliers may continue to seek price increases from us.
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Even if we can raise the prices of our products, consumers might react negatively to these price increases, which could have a material adverse effect on, among other things, our brands, reputation, and sales.
−Removed: During fiscal year 2023, our price increases may have caused some consumers to purchase fewer of our products than they have in the past.
If our competitors maintain or lower their prices while we raise prices, we may lose customers or the purchase frequency of our products may slow, which would both adversely affect sales.
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Even though we continue to work to alleviate supply chain constraints through various measures, we cannot predict the effect of these constraints on the timing of revenue and operating costs of our business in the near future.
−Removed: Supply chain challenges and supply chain constraints relating to ingredients, freight and packaging, including cost
−Removed: inflation, have negatively affected our gross margins and profitability during fiscal year 2023 and may continue to have a negative effect on our future operating results and profitability.
−Removed: In addition, p rolonged unfavorable economic conditions, including because of recession or slowed economic growth, or public health outbreaks, endemics or pandemics, may have an adverse effect on our sales and profitability.
−Removed: If we cannot maintain or increase prices of our products to cover elevated input costs, our margins may decrease.
+Added: Supply chain challenges and supply chain constraints relating to ingredients, freight and packaging, including cost inflation, have negatively affected our gross margins and profitability in the past and may continue to have a negative effect on our future operating results and profitability.
+Added: In addition, p rolonged unfavorable economic conditions, including because of recession or slowed economic growth, labor strikes, or public health outbreaks, endemics or pandemics, may have an adverse effect on our sales and profitability.
+Added: If we cannot maintain or increase the prices of our products to cover elevated input costs, our margins may decrease.
We rely, in part, on price increases to offset cost increases and maintain or improve the profitability of our business.
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If we cannot maintain or increase prices for our products or must increase trade and promotional activity, our margins may be adversely affected.
−Removed: For more information on the effects of supply chain cost increases on our profitability during fiscal year 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.
Furthermore, price increases generally cause volume losses, as consumers tend to purchase fewer units at higher price points.
If such losses are greater than expected or if we lose distribution due to price increases, our business, financial condition and results of operations may be materially and adversely affected.
−Removed: We may not be able to compete successfully in the highly competitive nutritional snacking industry.
−Removed: Our business is committed to providing people a more nutritious way to eat.
−Removed: We compete in the nutritional snacking industry, which is included in the general snack foods industry.
−Removed: The nutritious snacking industry is large and intensely competitive.
−Removed: Competitive factors in the nutritional snacking industry include product quality, taste, brand awareness among consumers, nutritional content, simpler and less processed ingredients, innovation of “on-trend” snacks, variety of snacks offered, grocery aisle placement, access to retailer shelf space, price, advertising and promotion, product packaging and package design.
−Removed: We compete in this market against numerous multinational, regional and local companies principally based on our nutritional content, product taste and quality, our brand recognition and loyalty, marketing, advertising, price and the ability to satisfy specific consumer dietary needs.
−Removed: An increasing focus on healthy and simpler products in the marketplace will likely increase these competitive pressures within the category in future periods.
−Removed: Our competitors in the nutritional snacking industry include companies selling meal replacement bars, shakes and nutritional supplements and through specific dietary approaches such as keto, paleo, vegan, gluten free, vegetarian and others.
−Removed: Views towards nutritional snacking, weight loss and management, and other nutritional approaches, are cyclical and trendy, with constantly changing consumer perceptions.
−Removed: Besides remaining competitive through the quality of our products and consumer perceptions of the effectiveness of a low-carb, low-sugar and protein-rich eating approach, both our brands must continue to be viewed favorably, or our business and reputation may be materially and adversely affected.
−Removed: If other nutritional approaches become more popular, or are generally perceived to be more effective, we may not be able to compete effectively.
−Removed: In addition, public opinion on the use of chronic weight management medication is shifting significantly as the popularity of clinical solutions grows and more medications are approved by the FDA.
−Removed: Moreover, the growing acceptance and use of medication to manage weight could negatively affect the demand for many types of food in general and our products.
−Removed: If the use of weight management medication becomes more popular and more widely used and we are unable to communicate effectively to consumers how our products can support achieving or maintaining their weight management goals, of our business could be materially and adversely affected.
−Removed: Some of our competitors have resources substantially greater than we have and sell brands that may be more widely recognized than our brands.
−Removed: Our current and potential competitors may offer products similar to our products, a wider range of products than we offer, and may offer such products at more competitive prices than we do.
−Removed: Local or regional markets often have significant additional competitors, many of whom offer products similar to ours and may have unique ties to regional or national retail chains.
−Removed: Any increased competition from new entrants into the nutritional snacking industry or any increased success by existing competition could cause reductions in our sales, require us to reduce our prices, or both, which could materially and adversely affect our business, financial condition and results of operations.
If we fail to implement our growth strategies successfully, timely, or at all, our ability to increase our revenue and operating profits could be materially and adversely affected.
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However, we may fail to accomplish this.
−Removed: We expect to continue focusing on nutritional snacking and intend to add additional brands to our product portfolio.
−Removed: Our ability to expand successfully our nutritional snacking brands and other growth strategies depends on, among other things, our ability to identify, and successfully cater to, new demographics and consumer trends, develop new and innovative products, identify and acquire additional product lines and businesses, secure shelf space in grocery stores, wholesale clubs and other retailers, increase consumer awareness of our
−Removed: brands, enter into distribution and other strategic arrangements with third-party retailers and other potential distributors of our products, and compete with numerous other companies and products.
+Added: We expect to continue focusing on nutritional snacking and intend to add additional brands to our product portfolio, such as OWYN, which we acquired during fiscal year 2024.
+Added: Our ability to expand successfully our nutritional snacking brands and other growth strategies depends on, among other things, our ability to identify, and successfully cater to, new demographics and consumer trends, develop new and innovative products, identify and acquire additional product lines and businesses, secure shelf space in grocery stores, wholesale clubs and other retailers, increase consumer awareness of our brands, enter into distribution and other strategic arrangements with third-party retailers and other potential distributors of our products, and compete with numerous other companies and products.
In addition, low carbohydrate eating lifestyle consumers of our products and those consumers using chronic weight management medication to support their weight loss goals may have different preferences and spending habits than the consumers of traditional weight loss products.
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We may also not succeed in evolving our advertising and other efforts to appeal to our target consumers.
−Removed: If we cannot identify and capture new audiences and demographics for all our brands, our ability to integrate additional brands successfully will be adversely affected.
+Added: If we cannot identify and capture new audiences and demographics for our brands, our ability to integrate additional brands successfully will be adversely affected.
We may also not succeed in evolving our advertising and other efforts to appeal to our target consumers.
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Our growth may be limited if we cannot maintain or secure additional shelf or retail space for our products in brick-and-mortar retailers.
−Removed: Our results depend on our ability to drive revenue growth, in part, by expanding the distribution channels for our products.
+Added: Our results depend on our ability to drive revenue growth, in part, by maintaining and expanding the distribution channels for our products.
Our ability to do so may be limited by an inability to secure new retailers or maintain or add shelf and retail space for our products.
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There can be no assurance that retailers will provide sufficient, or any, shelf space, nor that online retailers will provide online access to, or adequate product visibility on, their platform to enable us to meet our growth objectives.
−Removed: Unattractive placement or pricing, including because of our recent price increases, may put our products at a disadvantage compared to those of our competitors.
+Added: Unattractive placement or pricing may put our products at a disadvantage compared to those of our competitors.
Even if we obtain shelf space or preferable shelf placement, our new and existing products may fail to achieve the sales expectations set by our retailers, potentially causing these retailers to remove our products from their shelves.
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In addition, as media becomes increasingly fragmented, with consumers viewing media more and more through a variety of different platforms, channels and devices such as mobile devices and online streaming and less from traditional broadcast and cable television outlets, our costs to reach a comparable number of target consumers for our advertising activities has increased.
−Removed: We also consistently evaluate our product lines to determine whether to discontinue certain products.
−Removed: Discontinuing products may increase our profitability but could reduce our sales and cause consumers to shop other brands.
−Removed: The discontinuation of product lines may have an adverse effect on our business, financial condition and results of operations.
+Added: We also consistently evaluate our product lines to determine whether to redesign or discontinue certain products.
+Added: Redesigning or discontinuing products may increase our profitability but could reduce our sales and cause consumers to shop other brands.
+Added: The reformulation or discontinuation of product lines may have an adverse effect on our business, financial condition and results of operations.
Our geographic focus makes us particularly vulnerable to economic and other events and trends in North America.
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The concentration of our businesses in North America could present challenges and may increase the likelihood that an adverse event in North America would disproportionately materially and adversely affect product sales, financial condition and operating results.
−Removed: Pandemics, epidemics or disease outbreaks, such as COVID, have in the past and may in the future disrupt our business, including, among other things, consumption and trade patterns, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations.
+Added: Pandemics, epidemics or disease outbreaks have in the past and may in the future disrupt our business, including, among other things, consumption and trade patterns, our supply chain and production processes, each of which could materially affect our operations, liquidity, financial condition and results of operations.
The actual or perceived effects of a disease outbreak, epidemic, pandemic or similar widespread public health concern, such as COVID-19, could negatively affect our operations, liquidity, financial condition and results of operations.
−Removed: The COVID-19 pandemic
−Removed: situation continues to remain dynamic and subject to rapid and possibly material change, including but not limited to changes that may materially affect the operations of our customers and supply chain partners in the future, which ultimately could cause material negative effects on our business and results of operations.
−Removed: For example, the operations of several of our contract manufacturers were affected at the height of the COVID-19 pandemic’s effect on the availability of labor.
Pandemics, epidemics or disease outbreaks may affect demand for our products because quarantines or other government restrictions on movement may cause erratic consumer purchase behavior.
−Removed: Our business experienced these effects during fiscal year 2022.
Future governmental or societal impositions of restrictions on public gatherings, especially if prolonged, may have adverse effects on consumption rates and in-person traffic to retail stores and, in turn, our business.
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Ports and other channels of entry may be closed or operate at only a portion of capacity, as workers may be prohibited or otherwise unable to report to work and means of transporting products within regions or countries may be limited for the same reason.
−Removed: Because of the COVID-19 pandemic, transport restrictions have been put in place and global supply was and may become again in the future constrained, each of which may cause and have caused price increases or shortages of certain ingredients and raw materials used in our products.
−Removed: In addition we may experience disruptions to our operations.
+Added: Because of the COVID-19 pandemic, transport restrictions were put in place and global supply was constrained, each of which caused price increases or shortages of certain ingredients and raw materials used in our products.
Further, our contract manufacturers’ ability to manufacture our products was, and may again in the future be, impaired by disruption to their employee staffing, procurement, manufacturing, or warehousing capabilities because of COVID-19 or similar outbreaks.
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Costs of ingredients and packaging are volatile and can fluctuate due to conditions difficult to predict, including global competition for resources, fluctuations in currency and exchange rates, weather conditions, the effects of climate change, natural or man-made disasters, consumer demand, geopolitical events, and changes in governmental trade and agricultural programs and environmental regulations affecting the production or manufacturing of ingredients and packaging.
−Removed: Volatility in the prices of the core ingredients and other supplies we purchase increased in fiscal year 2023 and, while these
−Removed: price increases have begun to moderate, these prices may remain elevated during fiscal year 2024.
−Removed: As a result, our cost of goods sold increased in fiscal year 2023, and our profitability was reduced.
−Removed: We do not use hedges for availability of any core ingredients.
−Removed: Any material upward movement in core ingredient or packaging pricing could negatively affect our margins if we cannot find efficiencies or pass these costs on to our consumers, or our sales if we are forced to increase our prices.
+Added: Volatility in the prices of the core ingredients and other supplies we purchase increased in recent fiscal years and, while these price increases have begun to moderate for some core ingredients and other supplies, we anticipate increases in the cost of certain core ingredients and supplies during fiscal year 2025.
+Added: We do not use hedges for availability of any core ingredients or packaging.
+Added: Any material upward movement in core ingredient or packaging pricing could negatively affect our margins if we cannot find efficiencies or pass these costs on to our consumers.
If we are unsuccessful in managing our ingredient and packaging costs, if we cannot increase our prices to cover increased costs or if such price increases reduce our sales volumes, then such increases in costs will materially and adversely affect our business, financial condition and results of operations.
−Removed: For more information on the effects of supply chain cost increases on our results of operations during fiscal year 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.
Certain of our core ingredient contracts have minimum volume commitments that could require purchases without matching revenue during weaker sales periods.
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The core ingredients used in manufacturing our products include nuts, protein and fiber.
−Removed: We rely on a limited number of third-party suppliers to provide these core ingredients, a portion of which are international companies.
+Added: We rely on a limited number and in certain cases single third-party suppliers to provide these core ingredients, a portion of which are international companies.
There may be a limited market supply of any of these core ingredients.
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Any of our suppliers could discontinue or seek to alter their relationships with us.
−Removed: We may be adversely affected by increased demand for our specific core ingredients, a reduction in overall supply of required core ingredients, suppliers raising their prices, and increases in the cost of packaging and distributing core ingredients.
+Added: We may be adversely affected by increased demand for our specific core ingredients, a reduction in the overall supply of required core ingredients, suppliers raising their prices, and increases in the cost of packaging and distributing core ingredients.
+Added: We may not be able to identify and qualify new suppliers of core ingredients promptly, which could adversely affect our ability to make timely deliveries of products.
Additionally, we may be adversely affected if suppliers stop selling to us or enter into arrangements that impair their abilities to provide us with core ingredients and packaging.
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If having our products available for consumer purchase through our retail customers is disrupted because of an inability to obtain ingredients or packaging, labor challenges at our logistics providers or our contract manufacturers, or if our customers experience delays in stocking our products in their locations, we will experience a reduction in sales at retail and our results of operations could be material and adversely affected.
−Removed: We are subject to risks associated with protection of our trade secrets by our third-party contract manufacturers.
−Removed: If our contract manufacturers fail to protect our trade secrets, either intentionally or unintentionally, our business, financial condition and results of operations could be materially and adversely affected.
−Removed: If we experience significant increased demand for our products, or need to replace an existing supplier or manufacturer, additional supplies of core ingredients or manufacturers may not be available when required, on acceptable terms, or at all.
−Removed: Suppliers may not allocate sufficient capacity to meet our requirements, fill our orders promptly or meet our strict quality standards.
−Removed: Even if our existing suppliers and manufacturers can expand their capacities to meet our needs, or we can find new sources of core ingredients or new contract manufacturers, we may encounter delays in production, inconsistencies in quality and added costs.
−Removed: We may not be able to pass increased costs onto the consumer immediately, if at all, which may decrease or eliminate our profitability.
−Removed: Any manufacturing and/or supply disruptions or cost increases could have an adverse effect on our ability to meet consumer demand for our products and result in lower net sales and profitability, both in the short and long-term.
We rely in large part on our third-party contract manufacturers to maintain the quality of our products.
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A product liability judgment against us or a product recall could materially and adversely affect our business, financial condition and results of operations.
+Added: We are subject to risks associated with protection of our trade secrets by our third-party contract manufacturers.
+Added: If our contract manufacturers fail to protect our trade secrets, either intentionally or unintentionally, our business, financial condition and results of operations could be materially and adversely affected.
+Added: If we experience significant increased demand for our products, or need to replace an existing supplier or manufacturer, additional supplies of core ingredients or manufacturers may not be available when required, on acceptable terms, or at all.
+Added: Suppliers may not allocate sufficient capacity to meet our requirements, fill our orders promptly or meet our strict quality standards.
+Added: Even if our existing suppliers and manufacturers can expand their capacities to meet our needs, or we can find new sources of core ingredients or new contract manufacturers, we may encounter delays in production, inconsistencies in quality and added costs.
+Added: We may not be able to pass increased costs onto the consumer immediately, if at all, which may decrease or eliminate our profitability.
+Added: Any manufacturing and/or supply disruptions or cost increases could have an adverse effect on our ability to meet consumer demand for our products and result in lower net sales and profitability, both in the short and long-term.
We rely on sales to a limited number of retailers for a substantial portion of our net sales and losing one or more such retailers may materially harm our business.
In addition, we maintain “at-will” contracts with these retailers, which do not require recurring or minimum purchase amounts of our products.
−Removed: A substantial majority of our sales are generated from a limited number of retailers.
−Removed: Sales to our largest retailer, Walmart, represented approximately 31% of consolidated sales in fiscal year 2023, of which approximately 24% is through their mass retail channel and approximately 7% is through their Sam’s club and e-commerce channels.
+Added: A substantial amount of our sales are generated from a limited number of retailers.
+Added: Sales to our largest retailer customer, Walmart Inc., represented approximately 31% of consolidated sales in fiscal year 2024, of which approximately 23% is through their mass retail channel and approximately 8% is through their Sam’s club and e-commerce channels.
Sales to our next largest retailer, Amazon, represented approximately 18% of consolidated sales in fiscal year 2024.
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Conversely, occasionally, we may experience unanticipated increases in orders for our products from these retailers that can create supply chain problems and may cause unfilled orders.
−Removed: If we cannot meet increased demand for our products, our reputation with
−Removed: these retailers, and ultimately our consumers, may be harmed.
+Added: If we cannot meet increased demand for our products, our reputation with these retailers, and ultimately our consumers, may be harmed.
Unanticipated fluctuations in product requirements could cause fluctuations in our results from quarter-to-quarter.
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The loss of, a disruption in or an inability to efficiently operate our fulfillment network could materially and adversely affect our business, financial condition, and results of operations.
−Removed: operations, we utilize distribution centers in Greenfield, Indiana.
+Added: operations, we utilize distribution centers in Greenfield, Indiana, Greenwood, Indiana, Romeoville, Illinois and Hackettstown, New Jersey.
A substantial portion of our inventory is shipped directly to our retailers from these centers by a third-party logistics provider.
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If complications arise, a particular facility is damaged or destroyed or if either our third-party logistics partners or our customers who transport their own orders to their fulfillment network cannot meet their labor or other human capital needs for delivery drivers or other warehouse personnel or if trucking regulations affect current trucking norms (such as a shift to electric vehicles), our ability to deliver inventory timely or cost effectively could be significantly impaired, which could materially and adversely affect our business because of lost consumer purchases at retail thereby negatively affecting our operations.
−Removed: We rely on a single-sourced logistics provider for distribution and product shipments in the United States from our distribution centers.
+Added: We rely primarily on a single-sourced logistics provider for distribution and product shipments in the United States from our distribution centers.
Our utilization of delivery services for shipments is subject to risks that may affect the ability to provide delivery services that adequately meet our shipping needs including increases in fuel prices, labor shortages, employee strikes and inclement weather.
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We intend to grow through mergers and acquisitions or joint ventures, and we may not successfully integrate, operate or realize the anticipated benefits of such business combinations.
−Removed: As part of our strategic initiatives, we intend to pursue mergers and acquisitions or joint ventures.
+Added: As part of our strategic initiatives, we intend to pursue acquisitions or joint ventures, such as the OWYN Acquisition we completed during fiscal year 2024.
Our acquisition strategy is based on identifying and acquiring brands with products that complement our existing products and identifying and acquiring brands in new categories and new geographies to expand our platform of nutritional snacks and potentially other food products.
Although we regularly evaluate multiple acquisition candidates, we cannot be certain that we can successfully identify suitable acquisition candidates, negotiate acquisitions of identified candidates on favorable terms, or integrate acquisitions we complete.
−Removed: Acquisitions involve numerous risks and uncertainties, including intense competition for suitable acquisition targets, which could increase target prices and/or materially and adversely affect our ability to consummate deals on favorable terms, the potential unavailability of financial resources necessary to consummate acquisitions, the risk we improperly value and price a target, the potential inability to identify all of the risks and liabilities inherent in a target company or assets notwithstanding our diligence efforts, the diversion of management’s attention from the day-to-day operations of our business and additional strain on our existing personnel, increased leverage resulting from the additional debt financing that may be required to complete an acquisition, dilution of our net current book value per share if we issue additional equity securities to finance an acquisition, difficulties in identifying suitable acquisition targets or in
−Removed: completing any transactions identified on sufficiently favorable terms and the need to obtain regulatory or other governmental approvals that may be necessary to complete acquisitions.
−Removed: Any future acquisitions may pose risks associated with entry into new geographic markets, including outside the United States and our current international markets, distribution channels, lines of business or product categories, where we may not have significant prior experience and where we may not be as successful or profitable as we are in businesses and geographic regions where we have greater familiarity and brand recognition.
+Added: Acquisitions involve numerous risks and uncertainties, including intense competition for suitable acquisition targets, which could increase target prices and/or materially and adversely affect our ability to consummate deals on favorable terms, the potential unavailability of financial resources necessary to consummate acquisitions, the risk we improperly value and price a target, the potential inability to identify all of the risks and liabilities inherent in a target company or assets notwithstanding our diligence efforts, the diversion of management’s attention from the day-to-day operations of our business and additional strain on our existing personnel, increased leverage resulting from the additional debt financing that may be required to complete an acquisition, dilution of our net current book value per share if we issue additional equity securities to finance an acquisition, difficulties in identifying suitable acquisition targets or in completing any transactions identified on sufficiently favorable terms and the need to obtain regulatory or other governmental approvals that may be necessary to complete acquisitions.
+Added: Any future acquisitions may pose risks associated with entry into new geographic markets, including outside the United States and our current international markets, distribution channels, lines of business or product categories, where we may not have significant prior experience and where we may not be as successful or profitable as we are in businesses and geographic regions where we have greater familiarity and brand
Potential acquisitions may entail significant transaction costs and require significant management time and distraction from our core business, even where we cannot consummate or decide not to pursue a particular transaction.
Besides the risks above, even when acquisitions are completed, integration of acquired entities can involve significant difficulties.
−Removed: These include failure to achieve financial or operating objectives regarding an acquisition, systems, operational and managerial controls and procedures, the need to modify systems or to add management resources, difficulties in the integration and retention of consumers or personnel and the integration and effective deployment of operations or technologies, amortization of acquired assets (which would reduce future reported earnings), possible adverse short-term effects on cash flows or operating results, integrating personnel with diverse backgrounds and organizational cultures, coordinating sales and marketing functions and failure to obtain and retain key personnel of an acquired business.
+Added: These include failure to achieve financial or operating objectives regarding an acquisition, systems, operational and managerial controls and procedures, the need to modify systems or to add management resources, difficulties in the integration and retention of consumers or personnel and the integration and effective deployment of operations or technologies, amortization of acquired assets (which would reduce future reported earnings), possible adverse short-term effects on cash flows or operating results, the integration of personnel with diverse backgrounds and organizational cultures, the coordination of sales and marketing functions and failure to obtain and retain key personnel of an acquired business.
Failure to manage these acquisition growth risks could have an adverse effect on our business.
+Added: We may not realize the expected benefits of the OWYN acquisition because of integration difficulties and other challenges.
+Added: We completed the OWYN Acquisition in June 2024.
+Added: The success of the OWYN acquisition will depend, in part, on our ability to realize all or some of the anticipated benefits from integrating OWYN’s business with our existing businesses.
+Added: The integration process may be complex, costly and time-consuming.
+Added: The difficulties of integrating the operations of OWYN’s business include, among others:
+Added: • failure to implement our business plan for the combined business;
+Added: • unanticipated issues in integrating co-manufacturing, logistics, information, communications and other systems;
+Added: • possible inconsistencies in standards, controls, procedures and policies, and compensation structures between OWYN’s structure and our structure;
+Added: • failure to retain key employees, customers and suppliers;
+Added: • unanticipated changes in applicable laws and regulations;
+Added: • the complexities associated with integrating personnel from another company;
+Added: • operating risks inherent in OWYN’s business and our business;
+Added: • diversion of management's attention from other business concerns;
+Added: • increasing the scope, geographic diversity and complexity of our operations;
+Added: • unanticipated issues, expenses and liabilities.
+Added: We may not be able to maintain the levels of net sales, earnings or operating efficiency that each company had achieved historically or might achieve separately.
+Added: In addition, we may not accomplish the integration of OWYN’s business smoothly, successfully or within the anticipated costs or timeframe.
+Added: If we experience difficulties with the integration process, the anticipated benefits of the acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Our insurance policies may not provide adequate levels of coverage against claims.
16 unchanged sentences
Any legal action we may bring to protect our brand and other intellectual property could be unsuccessful, result in substantial costs and could divert management’s attention from other business concerns.
−Removed: A successful claim of trademark, copyright or other intellectual property infringement, misappropriation, or other violation against us could prevent us from providing our products or services or could require us to redesign or rebrand our products or packaging if we cannot license such third-party intellectual property on reasonable terms.
+Added: successful claim of trademark, copyright or other intellectual property infringement, misappropriation, or other violation against us could prevent us from providing our products or services or could require us to redesign or rebrand our products or packaging if we cannot license such third-party intellectual property on reasonable terms.
Certain of our intellectual property licenses have fixed terms, and even for those that do not, we cannot guarantee all our intellectual property licenses will remain in effect indefinitely.
5 unchanged sentences
Our operations depend upon our ability to protect our computer equipment and systems against damage from physical theft, fire, power loss and outages, telecommunications failure or other catastrophic events and from internal and external security breaches, viruses and other disruptive problems.
−Removed: The failure of these systems to operate effectively, whether from maintenance problems, upgrading or transitioning to new
−Removed: platforms, or a breach in security of these systems, could result in interruptions or delays in our operations, reduce efficiency or negatively affect our operations.
+Added: The failure of these systems to operate effectively, whether from maintenance problems, upgrading or transitioning to new platforms, or a breach in security of these systems, could result in interruptions or delays in our operations, reduce efficiency or negatively affect our operations.
If our information technology systems fail and our redundant systems or disaster recovery plans are not adequate to address such failures, or if our business interruption or cyber-security insurance does not sufficiently compensate us for any losses we may incur, our revenue and profits could be reduced, and the reputation of our brand and our business could be materially adversely affected.
34 unchanged sentences
The FDA requires all carbohydrates per serving to be listed on the Nutrition Facts Panel (“NFP”) of a package.
−Removed: Besides the information on the NFP, we use the term “net carbohydrate” (or “net carbs”) on our existing product packaging.
+Added: Besides the information on the NFP, we often use the term “net carbohydrate” (or “net carbs”) on our existing product packaging.
We determine the number of net carbs in a serving by subtracting fiber, and sugar alcohols if any, from the total carbohydrates listed on the NFP.
63 unchanged sentences
SOFR is calculated based on short-term repurchase agreements, backed by Treasury securities.
−Removed: SOFR is observed and backward looking, which stands in contrast with the London Inter-Bank Offered Rate (“LIBOR”) under
−Removed: the previous methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members.
−Removed: Given that SOFR is a secured rate backed by government securities, it is a rate that does not take into account bank credit risk, as was the case with LIBOR.
−Removed: SOFR is therefore likely to be lower than LIBOR and is less likely to correlate with the funding costs of financial institutions.
−Removed: Because of these and other differences, there is no assurance that SOFR will perform in the same way as LIBOR would have performed at any time, and there is no guarantee that it is a comparable substitute for LIBOR.
−Removed: Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question
+Added: SOFR is observed and backward looking.
+Added: Given SOFR is a secured rate backed by government securities, it is a rate that does not take into account bank credit risk.
+Added: SOFR is therefore less likely to correlate with the funding costs of financial institutions.
At this time, it is not possible to predict the effect of any establishment of alternative reference rates or any other reforms that may be enacted in the United Kingdom or elsewhere.
−Removed: Uncertainty as to the nature of such potential changes, alternative reference rates, including SOFR, or other reforms may adversely affect the trading market for LIBOR- or SOFR-based securities, including ours.
−Removed: As a result, our interest expense may increase, our ability to refinance some or all of our existing indebtedness may be affected, and our available cash flow may be adversely affected.
+Added: Uncertainty as to the nature of such potential changes, alternative reference rates, including SOFR, or other reforms may adversely affect the trading market for SOFR-based securities, including ours.
+Added: As a result, our interest expense may increase, our ability to refinance some or all our existing indebtedness may be affected, and our available cash flow may be adversely affected.
We may need additional capital in the future, and it may not be available on acceptable terms or at all.
We have historically relied upon cash generated by our operations to fund our operations and strategy.
−Removed: We may also need to access the debt and equity capital markets, however, these sources of financing may not be available on acceptable terms, or at all.
+Added: We may also need to access the debt and equity capital markets;
+Added: however, these sources of financing may not be available on acceptable terms, or at all.
Our ability to obtain additional financing will be subject to several factors, including market conditions, our operating performance, investor sentiment and our ability to incur additional debt in compliance with agreements governing our outstanding debt.
10 unchanged sentences
In addition, more investors and other market professionals are expecting more detailed environmental, social and governance or ESG reporting from public companies of our size that are currently produced by public companies with human and financial resources that are greater than ours.
−Removed: Furthermore, the SEC has proposed rule changes that would require registrants to include certain climate-related disclosures, including greenhouse gas emission data with third-party attestation and climate-related financial statement metrics in a note to their audited financial statements.
−Removed: These SEC proposals related to the enhancement and standardization of climate-related disclosures may require us to change our accounting policies, to alter our operational policies and to implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or to restate our published financial statements.
+Added: Furthermore, the SEC has adopted rule changes, and the State of California has enacted legislation that would require us to include certain climate-related disclosures, including greenhouse gas emission data with third-party attestation and climate-related financial statement metrics in a note to their audited financial statements.
+Added: These rules and legislation may require us to change our accounting policies, to alter our operational policies and to implement new or enhance existing systems so that they reflect new or amended financial reporting standards, or to restate our published financial statements.
Such changes may have an adverse effect on our business, financial position and operating results, or cause an adverse deviation from our revenue and operating profit targets, which may negatively affect our financial results.
4 unchanged sentences
We periodically update our operations and financial systems, procedures and controls;
−Removed: we still rely on certain manual processes and procedures that may not scale proportionately with our business growth.
−Removed: Our systems will continue to require automation, modifications and improvements to
−Removed: respond to current and future changes in our business.
+Added: however, we still rely on certain manual processes and procedures that may not scale proportionately with our business growth.
+Added: Our systems will continue to require automation, modifications and improvements to respond to current and future changes in our business.
Failure to implement promptly appropriate internal systems, procedures and controls could materially and adversely affect our business, financial condition and results of operations.
1 unchanged sentence
Effective internal control over financial reporting is necessary for us to provide reliable financial reports.
−Removed: In May 2021 we identified a material weakness in our internal control over financial reporting.
In the future, we may discover areas of our internal control over financial reporting that need improvement.
22 unchanged sentences
Investors seeking cash dividends should not purchase our common stock.
−Removed: There may be future sales or other dilution of the Company’s equity, which may adversely affect the market price of our common stock.
−Removed: We are not generally restricted from issuing additional shares of common stock, or any securities convertible into or exchangeable for, or that represent the right to receive, shares of common stock.
−Removed: Issuing any additional shares of common stock or preferred shares or securities convertible into, exchangeable for or that represent the right to receive shares of common stock or the exercise of such securities could be substantially dilutive to holders of our common stock.
−Removed: The market price of our common stock could decline because of sales of our common stock made in the future or the perception that such sales could occur.
−Removed: Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of future offerings, if any.
−Removed: Thus, our stockholders bear the risk of future offerings reducing the market price of our common stock and diluting their holdings in the Company.
Anti-takeover provisions in our amended and restated certificate of incorporation and second amended and restated bylaws, and provisions of Delaware law, could impair a takeover attempt.
12 unchanged sentences
Disruptions in the worldwide economy may materially and adversely affect our business, financial condition and results of operations.
−Removed: Adverse and uncertain economic conditions, such as those caused by the inflationary environment first experienced in fiscal year 2022 and which continued in fiscal year 2023, geopolitical events and COVID-19, have, in the past affected, and, in the future, may affect distributor, retailer and consumer demand for our products.
+Added: Adverse and uncertain economic conditions, such as those caused by the inflationary environment, geopolitical events and public health emergencies have, in the past affected, and, in the future, may affect distributor, retailer and consumer demand for our products.
In addition, our ability to manage normal commercial relationships with our suppliers, contract manufacturers, distributors, retailers, consumers and creditors may suffer.
3 unchanged sentences
Distributors and retailers may become more conservative in their ordering in response to these conditions and seek to reduce their inventories.
−Removed: Our results of operations depend on, among other things, our ability to maintain and increase sales volume with our existing distributors and retailers, to attract new consumers and to provide products that appeal to
−Removed: consumers at prices they are willing and able to pay.
+Added: Our results of operations depend on, among other things, our ability to maintain and increase sales volume with our existing distributors and retailers, to attract new consumers and to
+Added: provide products that appeal to consumers at prices they are willing and able to pay.
Prolonged unfavorable economic conditions may have an adverse effect on our sales and profitability.
31 unchanged sentences
As a result, certain of our stockholders, directors and their respective affiliates are not prohibited from operating or investing in competing businesses.
−Removed: We therefore may find ourselves in competition with certain of our stockholders, directors or their respective affiliates, and we may not know of, or be able to pursue, transactions that could potentially be beneficial to us.
+Added: We therefore may find ourselves in competition with certain of our stockholders, directors or their respective affiliates,
+Added: and we may not know of, or be able to pursue, transactions that could potentially be beneficial to us.
Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively affect our business or prospects.
−Removed: Unresolved Staff Comments.
−Removed: Cybersecurity
−Removed: Not applicable
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.