First Advantage(US:FA)2025-02-27 21:15Debt and Financial Obligations - The company may incur significant additional indebtedness in the future, with existing credit agreements containing restrictions that are subject to qualifications and exceptions[158]. - The ability to generate cash is crucial for servicing debt, and any failure to meet debt obligations could adversely affect the company's business and financial condition[159]. - If the company does not generate sufficient cash flow or cannot refinance its indebtedness, it may need to sell assets or reduce capital investments, which could materially impact operations[160]. - The company's debt instruments impose significant operating and financial restrictions, limiting its ability to incur additional debt, pay dividends, or make acquisitions[161]. - As of December 31, 2024, the carrying value of the company's long-term debt was $2,121.3 million, with a potential interest expense fluctuation of approximately $21.7 million for a hypothetical 100 basis point change in interest rates[343]. - The company entered into an interest rate swap agreement with a notional amount of $100.0 million, transitioning from LIBOR to SOFR with a fixed rate of 4.32%[345]. - The company has entered into multiple interest rate swap agreements to manage borrowing costs, with notional amounts totaling $160.0 million and $275.0 million maturing on December 31, 2026[347]. Shareholder and Corporate Governance - Silver Lake beneficially owned 51.7% of the company's outstanding common stock as of December 31, 2024, allowing it to control corporate policies and decisions[163]. - The company does not intend to pay dividends for the foreseeable future, with a one-time special cash dividend of $1.50 per share paid in August 2023 not indicating future dividend intentions[170]. - The company qualifies as a "controlled company" under Nasdaq rules, which may exempt it from certain corporate governance requirements[172]. - As of December 31, 2024, approximately 826,828,855 shares of common stock are authorized but unissued, which could dilute existing shareholders if issued[173]. - Future sales of common stock by existing stockholders could negatively impact the market price of the company's shares[174]. - Anti-takeover provisions in the company's organizational documents may delay or prevent a change of control, potentially affecting shareholder interests[177]. - The company has a classified board of directors with staggered three-year terms, which may limit stockholder ability to obtain a premium for shares[180]. - The company is authorized to issue up to 250,000,000 shares of preferred stock without stockholder approval, which may affect the value of common stock[181]. Cash and Currency Management - As of December 31, 2024, the company had cash and cash equivalents of $168.7 million, down from $213.8 million in 2023[341]. - Currency translation losses were approximately $(16.2) million, $1.2 million, and $(20.7) million for the years ended December 31, 2024, 2023, and 2022, respectively[351]. - The company has exposure to foreign currency fluctuations primarily related to the British Pound Sterling and Indian Rupee[349]. - The company has not hedged its investments in foreign subsidiaries against foreign currency exchange rate fluctuations[351]. Inflation and Economic Impact - The company does not believe inflation has materially affected its business, but acknowledges potential risks if costs rise significantly[352].