Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has limited exposure to fluctuation in foreign currency exchange rates to U.S. dollar, primarily in Canadian dollars and Euros currency. Approximately 91% of the Company’s consolidated sales are transacted in U.S. dollars. Net assets held in or measured in Canadian dollars amounted to $8.8 million at December 31, 2022. A 10% change in the value of the U.S. dollar versus the Canadian dollar would have had a $0.2 million impact to 2022 net loss. Net assets held in or measured in Euros amounted to $25.3 million at December 31, 2022. A 10% change in the value of the U.S. dollar versus the Euros would have had a $0.1 million impact to 2022 net loss.
Risk due to fluctuation in interest rates is a function of the Company’s floating rate debt obligations, which total approximately $164.0 million at December 31, 2022. A change of 1% in interest rates of all variable rate debt would impact annual net loss by approximately $1.6 million, before income taxes.
As disclosed elsewhere in this report, the future impacts of the Russia and Ukraine conflict and the COVID-19 pandemic and their residual effects, including economic uncertainty, inflationary environment and disruption within the global supply chain, labor markets and aerospace industry, on our business remain uncertain. As we cannot anticipate the ultimate duration or scope of the Russia-Ukraine war and the COVID-19 pandemic, the ultimate financial impact to our results cannot be reasonably estimated, but could be material.
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