ROCKY BRANDS, INC. 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   In the normal course of business, our financial position and results of operations are routinely subject to a variety of risks, including market risk associated with interest rate movements on borrowings and currency rate movements on non-U.S. dollar denominated assets, liabilities and cash flows. We are also subject to commodity pricing risk via changes in the price of materials used in our manufacturing process. We regularly assess these risks and have established policies and business practices that should mitigate a portion of the adverse effect of these and other potential exposures.   Interest Rate Risk   Our primary market risk results from fluctuations in interest rates. The following item is market rate sensitive for interest rates for the Company: long-term debt consisting of a term facility and a credit facility with an outstanding balance of approximately $128 million and $146 million, respectively at December 31, 2021. For additional information about our credit facilities see Note 8 .    We do not hold any market risk sensitive instruments for trading purposes.   We do not have any interest rate management agreements as of December 31, 2021.   Commodity Risk   We are also exposed to changes in the price of commodities used in our manufacturing operations. However, commodity price risk related to our current commodities is not material as price changes in commodities can generally be passed along to the customer.   Foreign Exchange Risk   We face market risk to the extent that changes in foreign currency exchange rates affect our foreign assets, liabilities and inventory purchase commitments. We manage these risks by attempting to denominate contractual and other foreign arrangements in U.S. dollars.   25 Table of Contents