Savers Value Village(SVV) - 2024 Q4 - Annual Report

Financial Position and Debt - As of December 28, 2024, the company had $123.8 million available to borrow under the Revolving Credit Facility, with no advances made[230]. - A 100 basis point increase in interest rates would result in a$3.2 million change in annual interest expense on the company's variable rate indebtedness[229]. - The company does not anticipate paying any cash dividends for the foreseeable future due to limitations imposed by its indebtedness[236]. - The company is exposed to interest rate risk due to reliance on variable rate borrowings, which could impact net income and cash flows[229]. Shareholder Influence and Governance - The Ares Funds owned 84.6% of the company's common stock as of December 28, 2024, allowing them significant influence over corporate governance[243]. - The company is classified as a "Controlled Company" under NYSE rules, allowing it to opt out of certain corporate governance requirements[246]. - The Ares Funds control a majority of the voting power, which may limit stockholder protections compared to companies fully compliant with NYSE governance standards[247]. - Provisions in the company's certificate of incorporation and bylaws may delay or prevent changes in control, potentially affecting stock price and investor interest[248]. - The company has opted out of Section 203 of the Delaware General Corporation Law, which generally restricts business combinations with interested stockholders owning 15% or more of voting stock[250]. - The exclusive-forum provisions in the certificate of incorporation may limit stockholders' ability to bring claims in preferred judicial forums, potentially discouraging lawsuits[252]. - The company’s certificate of incorporation allows Ares Funds and affiliates to engage in similar business activities without liability for breaching fiduciary duties[256]. Business Risks and Challenges - The company faces risks related to attracting and retaining customers, particularly in the context of growing acceptance of secondhand items[18]. - The company has no operations in the growing online retail marketplace, which poses a risk to its business model[18]. - The company may face challenges in opening new profitable stores or entering new markets in a timely manner[18]. - The company is subject to various risks including geopolitical instability and regulatory changes that could adversely affect its operations[18]. - The company relies heavily on key executive officers and employees, and their loss could adversely affect business operations[258]. Regulatory and Compliance Issues - Compliance with public company regulations may strain resources and divert management's attention, impacting overall business performance[261]. - Changing laws and regulations regarding corporate governance may increase compliance costs and create uncertainty for the company[263]. - Disclosure requirements as a public company may expose the company to increased litigation risks, affecting financial condition and operational focus[265].