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New words:
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Financial report summary
?Risks
- We rely on a limited number of customers, including one customer that represented more than 10% of our consolidated revenue in 2021. A significant change in customer relationships or in customer demand for our products could materially adversely affect our results of operations, financial condition and cash flows.
- Our industry is highly competitive, and we may lose market share to other producers of specialty petrochemicals, specialty waxes or other products that can be substituted for our products, which may adversely affect our results of operations, financial condition and cash flows.
- Loss of key employees, our inability to attract and retain new qualified employees or our inability to keep our employees focused on our strategies and goals could have an adverse impact on our operations.
- If the availability of our raw materials is limited, we may be unable to produce some of our products in quantities sufficient to meet customer demand or on favorable economic terms, which could have an adverse effect on our results of operations, financial condition and cash flows.
- Increases in the costs of our raw materials could have an adverse effect on our financial condition and results of operations if those costs cannot be passed onto our customers.
- If we are unable to access third-party transportation for our raw materials and finished products, we may not be able to fulfill our obligations to our customers in a timely manner, which could have a material adverse effect on our results of operations, financial condition and cash flows.
- Failure to successfully consummate extraordinary transactions, including the integration of other businesses, assets, products or technologies, or realize the financial and strategic goals that were contemplated at the time of any such transaction may adversely affect our future business, results of operations and financial condition.
- Maintenance, expansion and refurbishment of our facilities and the development and implementation of new manufacturing processes involve significant risks which may adversely affect our business, results of operations, financial condition and cash flows.
- There are certain hazards and risks inherent in our operations that could adversely affect those operations and results of operations and financial condition.
- Conditions in the global economy may adversely affect our results of operations, financial condition and cash flows.
- We may be adversely affected by the effects of inflation.
- The global outbreak of COVID-19 has had, and may continue to have, an adverse impact on the business, results of operations, financial position, and liquidity of the Company and/or its customers, suppliers, and other counterparties.
- Domestic or international natural disasters or other severe weather events, health epidemics or pandemics or terrorist attacks may disrupt our operations or those of our customers or suppliers, decrease demand for our products or otherwise have an adverse impact on our business.
- We are exposed to local business risks in different countries, which could have a material adverse effect on our financial condition and results of operations.
- Our business, operating results and the value of our common stock could be negatively affected as a result of actions by activist stockholders.
- Delaware law and certain provisions of our organizational documents may make a takeover of our company more difficult.
- We are subject to numerous regulations that could require us to modify our current business practices and incur increased costs.
- Adverse results of legal proceedings could materially adversely affect us.
- We expect to continue to incur capital expenditures and operating costs as a result of our compliance with existing and future environmental laws and regulations.
- The adoption of climate change legislation or regulation could result in increased operating costs and reduced demand for our products.
- Increased information systems security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products and services.
- If we are not able to continue the technological innovation and successful commercial introduction of new products, our customers may turn to other producers to meet their requirements, which may adversely affect our results of operations, financial condition and cash flows.
- A failure of our information technology systems, including our enterprise resource planning (“ERP”) system, could adversely effect on our business and results of operations or the effectiveness of internal controls over financial reporting.
- Changes in tax laws or exposure to additional income tax liabilities could affect our future profitability.
- The covenants in the instruments that govern our outstanding indebtedness may limit our operating and financial flexibility.
- Our indebtedness could limit cash flow available for our operations and could adversely affect our ability to service debt or obtain additional financing if necessary.
- To service our current, and any future, indebtedness, we will require a significant amount of cash, which may adversely affect our future results.
- Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Management Discussion
- We reported first quarter 2022 net loss of approximately $0.4 million, an increase from net loss of $4.4 million in the first quarter of 2021. Sales volume of our Specialty Petrochemicals products increased 17.6% in the first quarter of 2022 as compared to the first quarter of 2021. Specialty Waxes sales revenue was up 44.4% compared to the first quarter 2021. First quarter 2022 results improved primarily due to increased pricing, the ongoing economic recovery and stronger demand from our end-use markets. Our first quarter 2021 results were significantly impacted by the prolonged period of sub-freezing temperatures and snow across the State of Texas and the region in February 2021 (the “Texas freeze event”) including reduced demand and higher natural gas and transportation costs.