dependent on the product, customer and geographic mix reflected in that period's revenues. 5. SEASONAL TRENDS The Company experiences some seasonal trends in the sale of its products. For example, sales to the European region are often stronger than the Asian region. Social and cultural elements are strong contributing factors. 6. TECHNOLOGICAL CHANGES AND PRODUCT TRANSITIONS The jeans industry is characterised by continuing improvements in fashion and design which result in frequent introduction of new products, short product life cycles and continual improvement in product price/design characteristics. The Company must effectively manage a product transition and incorporate technology that will improve customer service and demand. 7. INVENTORY MANAGEMENT/SUPPLIES/RAW MATERIALSThe Company's ability to manage its inventory has been enhanced by favourable supply conditions in the industry. The Company's manufacturing process requires a high volume of quality components that are procured from third party suppliers. Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts, shortage of components and reduced control over delivery schedules and increases in component costs.8. RISK ON FINANCIAL INSTRUMENTS The Company regularly utilises derivative instruments to hedge its exposure to fluctuations in foreign currency exchange rates and interest rates. SUMMARYThe eight external factors highlighted in this paper are identified as primary factors in this industry. ...
