This excerpt taken from the XIDE 10-K filed Jun 29, 2005.
The Company is exposed to market risks from changes in foreign currency exchange rates, certain commodity prices and interest rates. The Company does not enter into contracts without an intent to mitigate a particular risk, nor is it a party to any leveraged instruments. A discussion of the Companys accounting policies for derivative instruments is provided in Notes 3 and 8 to the Consolidated Financial Statements.
Foreign Currency Exchange Rate Risk
The Company is exposed to foreign currency risk related to uncertainty to which future earnings or assets and liability values are exposed due to operating cash flows and various financial instruments that are denominated in foreign currencies. More specifically, the Company is exposed to foreign currency risk in most European countries, principally Germany, France, the United Kingdom, Spain and Italy. It is also exposed, although to a lesser extent, to foreign currency risk in Australia and the Pacific Rim. Movements of exchange rates against the U.S. dollar can result in variations in the U.S. dollar value of non-U.S. sales. In some instances, gains in one currency may be offset by losses in another.
Commodity Price Risk
Lead is the primary material used in the manufacture of batteries, representing approximately one-third of the Companys cost of goods sold. The market price of lead fluctuates. Generally, when lead prices decrease, customers may seek disproportionate price reductions from the Company, and when lead prices increase, customers may resist price increases.
Interest Rate Risk
The Company is exposed to interest rate risk on its variable rate long-term debt. The Company has on occasion entered into certain interest rate swap agreements to hedge exposure to interest costs associated with long-term debt. Interest rate swaps involve the exchange of floating rate interest payments to effectively convert floating rate debt into fixed rate debt. No such swaps were outstanding at March 31, 2005.
The following table presents the expected debt maturities, excluding capital lease obligations and lines of credit, under the terms of the Companys borrowing arrangements at March 31, 2005.
This excerpt taken from the XIDE 10-Q filed Feb 14, 2005.
Changes to the quantitative and qualitative market risks as of December 31, 2004 are described in Managements Discussion and AnalysisLiquidity and Capital Resources. Also, see the Companys Annual Report on Form 10-K for the fiscal year ended March 31, 2004 for further information.