XML 28 R15.htm IDEA: XBRL DOCUMENT
v3.25.1

Financial Instruments | 3 Months Ended
--- | ---
Mar. 29, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments Short-Term Investments The fair value of short-term investments at March 29, 2025 and December 28, 2024, consisting of marketable securities, approximates the carrying value on that date. These marketable securities are stated at fair value and classified as level 1 within the fair value hierarchy. This classification is defined as a fair value determined using observable inputs that reflect quoted prices in active markets for identical assets. Derivative Instruments and Hedging Activities The Company’s earnings and cash flows are subject to fluctuations due to changes in commodity prices, foreign currency exchange rates, and interest rates. The Company uses derivative instruments such as commodity futures contracts, foreign currency forward contracts, and interest rate swaps to manage these exposures. All derivatives are recognized in the Condensed Consolidated Balance Sheets at their fair values. On the date the derivative contract is entered into, it is either a) designated as a hedge of a forecasted transaction or the variability of cash flow to be paid (cash flow hedge) or b) not designated in a hedge accounting relationship, even though the derivative contract was executed to mitigate an economic exposure (economic hedge), as the Company does not enter into derivative contracts for trading purposes. Changes in the fair value of a derivative that is qualified, designated, and highly effective as a cash flow hedge are recorded in stockholders’ equity within AOCI, to the extent effective, until they are reclassified to earnings in the same period or periods during which the hedged transaction affects earnings. Changes in the fair value of undesignated derivatives executed as economic hedges are reported in current earnings. The Company documents all relationships between derivative instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivative instruments that are designated as fair value hedges to specific assets and liabilities in the Condensed Consolidated Balance Sheets and linking cash flow hedges to specific forecasted transactions or variability of cash flow. The Company also assesses, both at the hedge’s inception and on an ongoing basis, whether the designated derivative instruments that are used in hedging transactions are highly effective in offsetting changes in cash flows or fair values of hedged items. When a derivative instrument is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable of occurring, hedge accounting is discontinued prospectively in accordance with the derecognition criteria for hedge accounting. Commodity Futures Contracts Copper and brass represent the largest component of the Company’s variable costs of production. The cost of these materials is subject to global market fluctuations caused by factors beyond the Company’s control. The Company occasionally enters into forward fixed-price arrangements with certain customers; the risk of these arrangements is generally managed with commodity futures contracts. These futures contracts have been designated as cash flow hedges. At March 29, 2025, the Company held open futures contracts to purchase approximately $11.3 million of copper over the next nine months related to fixed price sales orders. The fair value of those futures contracts was a $2.2 million net gain position, which was determined by obtaining quoted market prices (level 1 within the fair value hierarchy). In the next 12 months, the Company will reclassify into earnings realized gains or losses relating to cash flow hedges. At March 29, 2025, this amount was approximately $1.7 million of deferred net gains, net of tax. The Company may also enter into futures contracts to protect the value of inventory against market fluctuations. At March 29, 2025, the Company held $108.6 million open futures contracts to sell copper over the next nine months related to copper inventory. The fair value of those futures contracts was a $6.1 million net loss position, which was determined by obtaining quoted market prices (level 1 within the fair value hierarchy). The Company presents its derivative assets and liabilities in the Condensed Consolidated Balance Sheets on a net basis by counterparty. The following table summarizes the location and fair value of the derivative instruments and disaggregates the net derivative assets and liabilities into gross components on a contract-by-contract basis:
|  | Asset Derivatives |  | Liability Derivatives
|  |  |  | Fair Value |  |  |  | Fair Value
(In thousands) |  | Balance Sheet Location |  | March 29, 2025 |  | December 28, 2024 |  | Balance Sheet Location |  | March 29, 2025 |  | December 28, 2024
Commodity contracts - gains |  | Other current assets |  | $ | 2,219 |  |  | $ | 235 |  |  | Other current liabilities |  | $ | 152 |  |  | $ | 42 |
Commodity contracts - losses |  | Other current assets |  | (3) |  |  | (62) |  |  | Other current liabilities |  | (6,214) |  |  | (405) |
Total derivatives (1) |  |  |  | $ | 2,216 |  |  | $ | 173 |  |  |  |  | $ | (6,062) |  |  | $ | (363) |
(1) Does not include the impact of cash collateral provided to counterparties. The following tables summarize the effects of derivative instruments on the Company’s Condensed Consolidated Statements of Income:
|  |  |  |  |  | For the Quarter Ended
(In thousands) |  | Location |  |  |  |  |  | March 29, 2025 |  | March 30, 2024
Undesignated derivatives: |  |  |  |  |  |  |  |  |  |
(Loss) gain on commodity contracts (nonqualifying) |  | Cost of goods sold |  |  |  |  |  | $ | (6,153) |  |  | $ | 488 |
The following tables summarize amounts recognized in and reclassified from AOCI during the period:
|  | For the Quarter Ended March 29, 2025
(In thousands) |  | Gain Recognized in AOCI (Effective Portion), Net of Tax |  | Classification Gains (Losses) |  | Gain Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges: |  |  |  |  |  |
Commodity contracts |  | $ | 3,401 |  |  | Cost of goods sold |  | $ | (1,356) |
Other |  | 1 |  |  | Other |  | — |
Total |  | $ | 3,402 |  |  | Total |  | $ | (1,356) |
|  | For the Quarter Ended March 30, 2024
(In thousands) |  | Gain Recognized in AOCI (Effective Portion), Net of Tax |  | Classification Gains (Losses) |  | Gain Reclassified from AOCI (Effective Portion), Net of Tax
Cash flow hedges: |  |  |  |  |  |
Commodity contracts |  | $ | 667 |  |  | Cost of goods sold |  | $ | (373) |
Other |  | 33 |  |  | Other |  | — |
Total |  | $ | 700 |  |  | Total |  | $ | (373) |
The Company primarily enters into International Swaps and Derivatives Association master netting agreements with major financial institutions that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the Company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. The master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. The Company does not offset fair value amounts for derivative instruments and fair value amounts recognized for the right to reclaim cash collateral. At March 29, 2025 and December 28, 2024, the Company had recorded restricted cash in other current assets of $11.4 million and $1.4 million, respectively, as collateral related to open derivative contracts under the master netting arrangements.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration