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COVID-19 Update
12 Months Ended
Dec. 31, 2021
Unusual or Infrequent Items, or Both [Abstract]  
COVID-19 Update COVID-19 Update
Since COVID-19 was declared a global pandemic by the World Health Organization, the Company’s business, operations and financial performance have been, and may continue to be, affected by the macroeconomic impacts resulting from the efforts to control the spread of COVID-19. The Company has enacted enhanced health and safety protocols, including sanitizing procedure and health checks, at its facilities to ensure the health and safety of the employees.
While PPE related products boosted the Company’s net sales by $38.1 million for the year ended December 31, 2020, such sales have declined to approximately $2.7 million, or under 1.0% of net sales for the year ended December 31, 2021.
The raw material and labor shortage and supply chain and transportation disruptions caused by COVID-19 have adversely impacted the Company’s business including, among other things, raw materials inflation, increased freight and shipping costs and longer inventory lead time. The Company has evolved its operations to navigate such challenges, including the diversification of its supplier network, the adjustment of its inventory purchase pattern, and the continued focus on and investment in automation in its operations and its E-commerce platform,
On April 16, 2020, the Company received PPE loan proceeds in the amount of $5.0 million. The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The loans and accrued interest are potentially forgivable after eight weeks as long as the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels. The Company applied for the forgiveness of the PPE loan, and was granted loan forgiveness in whole, by meeting the conditions for use of loan proceeds on June 10, 2021. The Company recorded loan forgiveness of $5.0 million as gain on forgiveness of debt in the accompanying consolidated statement of income.
Additionally, the Company successfully completed its initial public offering in April 2021, raising total proceeds of $67.6 million, which strengthened its liquidity and allowed it to repay borrowings under its Line of Credit of $34.6 million and certain term loans totaling $39.3 million during the year ended December 31, 2021. The Company continues to focus on working capital management and the strength of its balance sheet. As of December 31, 2021, the Company had cash and cash equivalents of $6.5 million, and additional availability of $40.0 million under its Line of Credit and $6.9 million under its 2026 Term Loan. Given its balance sheet and liquidity position, management believes that the Company has the financial flexibility and resources needed to operate in the current uncertain economic environment. However, if global economic conditions worsen as a result of the pandemic, it could materially impact the Company’s liquidity position and capital needs.
The full extent to which COVID-19 impacts the Company's business and financial results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning
the severity of the virus and the actions to contain its impact, the impacts of new variants of the virus, and the timing, distribution, efficacy and public acceptance of vaccines and other treatments for COVID-19.