Hillman Solutions Corp. 10-K

Item 7A – Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Exposure We are exposed to the impact of interest rate changes as borrowings under the Senior Facilities bear interest at variable interest rates. It is our policy to enter into interest rate swap only to the extent considered necessary to meet our objectives. Based on our exposure to variable rate borrowings at December 25, 2021, after consideration of our LIBOR floor rate and interest rate swap agreements, a one percent (1%) change in the weighted average interest rate for a period of one year would change the annual interest expense by approximately $5.2 million. Foreign Currency Exchange We are exposed to foreign exchange rate changes of the Canadian and Mexican currencies as it impacts the $169.9 million tangible and intangible net asset value of our Canadian and Mexican subsidiaries as of December 25, 2021. The foreign subsidiaries net tangible assets were $107.6 million and the net intangible assets were $62.3 million as of December 25, 2021. We utilize foreign exchange forward contracts to manage the exposure to currency fluctuations in the Canadian dollar versus the U.S. Dollar. See Note 15 - Derivatives and Hedging of the Notes to Consolidated Financial Statements. 41