Company: THRM
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000950170-25-023344
Chunk: 100

Company: Gentherm Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1A
Chunk 100
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orean Won, Czech Koruna and Vietnamese Dong. While we sometimes employ financial instruments to hedge some of our transactional foreign exchange exposure, developing an effective and economical foreign currency risk strategy is complex and expensive and no strategy can completely insulate us from those exposures. Exchange rates can be volatile and could adversely affect our financial results and comparability of results from period to period. Such exchange rate volatility could also increase the costs of raw materials or components from foreign suppliers, and as a result, our profitability could be adversely affected.

Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance.

As of December 31, 2024, our total consolidated indebtedness was $220.2 million, with $280.0 million available for additional borrowings under the Second Amended and Restated Credit Agreement subject to specified conditions that Gentherm currently satisfies. We may incur additional indebtedness in the future, including in connection with acquisitions or significant capital expenditures. If our outstanding borrowings increase, including under existing availability of revolving credit or if we incur additional indebtedness, the amount of our outstanding debt could have important, adverse consequences to us and our investors, including:

▪requiring a substantial portion of our cash flow from operations to make interest payments;

▪making it more difficult to satisfy other obligations;

▪increasing our vulnerability to general adverse economic and industry conditions;

▪reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses;

▪limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and

▪limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise.

Our debt agreements contain certain restrictive covenants and customary events of default. These restrictive covenants limit our ability to take certain actions, such as, among other things: incur additional debt, create liens, make certain payments or distributions (including for the repurchase or redemption of our shares), engage in mergers or consolidations, make certain dispositions and transfers of assets, enter into transactions with affiliates and guarantee indebtedness. While not unusual for financings of the type that we have, the restrictions in our credit facilities may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for us to execute our business plans, take advantage of business opportunities, or react to changing industry conditions.