KEY TRONIC CORP 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We are subject to the risk of fluctuating interest rates in the normal course of business. Our major market risk relates to our secured debt. Our asset-based senior secured revolving credit facility and equipment financing facility are secured by substantially all of our assets. The interest rates applicable to our asset-based senior secured revolving credit facility fluctuate with LIBOR rates. There was outstanding $116.8 million in borrowings under our asset-based senior secured revolving credit facility and $2.5 million outstanding on our equipment financing facilities as of April 1, 2023. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity” and “Long-Term Debt” included in Note 4 of the “Notes to Consolidated Financial Statements” for additional information regarding our revolving credit facility and term loans. Foreign Currency Exchange Risk A significant portion of our operations are in foreign locations. As a result, transactions occur in currencies other than the U.S. dollar. Exchange rate fluctuations among other currencies used by us directly or indirectly affect our financial results. From time to time, we use Mexican Peso forward contracts to hedge foreign currency fluctuations for a portion of our Mexican Peso denominated expenses. As of April 1, 2023, the Company did not have any outstanding foreign currency forward contracts For the three months ended April 1, 2023, the Company did not enter into or settle any foreign currency forward contracts.