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Note 2 - Derivative Instruments and Hedging Activities | 9 Months Ended
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Sep. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 2. Derivative Instruments and Hedging Activities The Company records all derivatives in accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging, which requires all derivative instruments be reported on the consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk such as changes in commodity prices, foreign currencies, and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes. Commodities The primary objectives of the commodity risk management activities are to understand and mitigate the impact of potential price fluctuations on the Company’s financial results and its economic well-being. While the Company’s risk management objectives and strategies will be driven from an economic perspective, it attempts, where possible and practical, to ensure that the hedging strategies it engages in can be treated as “hedges” from an accounting perspective or otherwise result in accounting treatment where the earnings effect of the hedging instrument provides substantial offset (in the same period) to the earnings effect of the hedged item. Generally, these risk management transactions will involve the use of commodity derivatives to protect against exposure resulting from significant price fluctuations. The Company primarily utilizes commodity contracts with maturities of less than twelve months. The impact of such contracts is intended to offset the effect of price fluctuations on actual inventory purchases. Outstanding commodity forward contracts in place to hedge the Company’s projected commodity purchases were as follows:
As of September 30, 2014: |  |  |  |
Commodity | Trade Date | Effective Date | Notional Amount | Termination Date
Copper | 1/31/2014 | 2/1/2014 | $ 3,879 | 12/31/2014
Copper | 3/11/2014 | 4/1/2014 | 3,014 | 12/31/2014
As of December 31, 2013: |  |  |  |
Commodity | Trade Date | Effective Date | Notional Amount | Termination Date
Copper | 6/21/2013 | 10/1/2013 | $ 2,169 | 6/30/2014
As of September 30, 2013: |  |  |  |
Commodity | Trade Date | Effective Date | Notional Amount | Termination Date
Copper | 2/26/2013 | 3/1/2013 | $ 2,677 | 12/31/2013
Copper | 3/1/2013 | 3/1/2013 | 2,636 | 12/31/2013
Copper | 4/15/2013 | 5/1/2013 | 4,033 | 12/31/2013
Copper | 6/21/2013 | 10/1/2013 | 2,169 | 6/30/2014
Because these contracts do not qualify for hedge accounting, gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Total losses recognized for the three and nine months ended September 30, 2014 were $(106) and $(154), respectively. Total gains (losses) recognized for the three and nine months ended September 30, 2013 were $578 and $(540), respectively. Foreign Currencies The Company is exposed to foreign currency exchange risk as a result of transactions denominated in other currencies. The Company periodically utilizes foreign currency forward purchase and sales contracts to manage the volatility associated with foreign currency purchases in the normal course of business. Contracts typically have maturities of twelve months or less. There were no foreign currency hedge contracts outstanding as of September 30, 2013. As of September 30, 2014 and December 31, 2013, the following foreign currency contracts were outstanding:
As of September 30, 2014: |  |  |  |
Currency Denomination |  | Notional Amount |
British Pound Sterling (GBP) to Euro |  | £ | 3,000 |
A s of December 31, 2013: |  |  |  |
Currency Denomination |  | Notional Amount |
United States Dollar (USD) to Euro |  | $ | 650 |
British Pound Sterling (GBP) to Euro |  | £ | 4,000 |
Total losses recognized in the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2014 were $(93) and $(190), respectively. Interest Rate Swaps As of May 30, 2012, the date of a previous credit agreement refinancing, the Company had four interest rate swap agreements outstanding. The first swap was entered into on January 21, 2010, had an effective date of July 1, 2010, a notional amount of $200,000, a fixed LIBOR rate of 1.73% and an expiration date of July 1, 2012. The second swap was entered into on June 29, 2010, had an effective date of October 1, 2010, a notional amount of $100,000, a fixed LIBOR rate of 1.025% and an expiration date of October 1, 2012. The third swap was entered into on April 1, 2011, had an effective date of July 1, 2012, a notional amount of $200,000, a fixed LIBOR rate of 1.905% and an expiration date of July 1, 2013. The fourth swap was entered into on April 1, 2011, had an effective date of October 1, 2012, a notional amount of $100,000, a fixed LIBOR rate of 2.22% and an expiration date of October 1, 2013. Due to the incorporation of a new interest rate floor provision in the then new credit agreement, which constituted a change in critical terms, the Company concluded that as of May 30, 2012, the then outstanding swaps would no longer be highly effective in achieving offsetting changes in cash flows during the periods the hedges were designated. As a result, the Company was required to de-designate the four outstanding hedges as of May 30, 2012. Beginning May 31, 2012, the effective portion of the swaps prior to the change (i.e. amounts previously recorded in Accumulated Other Comprehensive Loss) were amortized into interest expense over the period of the originally designated hedged transactions which had various termination dates through October 2013. Future changes in fair value of these swaps were immediately recognized in the consolidated statements of comprehensive income as interest expense. On October 23, 2013, the Company entered into two interest rate swap agreements, and on May 19, 2014, the Company entered into one interest rate swap agreement. The Company formally documented all relationships between interest rate hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions. These interest rate swap agreements qualify as cash flow hedges. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss. The cash flows of the swaps are recognized as adjustments to interest expense each period. The ineffective portion of the derivatives’ change in fair value, if any, is immediately recognized in earnings. The Company assesses on an ongoing basis whether derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective dates of the swaps are July 1, 2014 with a notional amount of $100,000 each and a fixed LIBOR rate of 1.7370%, 1.7420% and 1.6195%, including a LIBOR floor of 0.75%, with expiration dates of July 1, 2018. The following table presents the fair value of the Company’s derivatives:
|  | September 30, 201 4 |  |  | December 31, 201 3 |
Commodity contracts |  | $ | (55 | ) |  | $ | 69 |
Foreign currency contracts |  |  | (190 | ) |  |  | 56 |
Interest rate swaps |  |  | 103 |  |  |  | 1,236 |
The fair value of the commodity and foreign currency contracts is included in other accrued liabilities and other assets in the condensed consolidated balance sheets as of September 30, 2014 and December 31, 2013, respectively. The fair value of the interest rate swaps is included in other assets in the condensed consolidated balance sheets as of September 30, 2014 and December 31, 2013. Excluding the impact of credit risk, the fair value of the derivative contracts as of September 30, 2014 and December 31, 2013 is a liability of $(140) and an asset of $1,385, respectively, which represents the amount the Company would need to pay or would receive to exit the agreements on those dates. The following presents the impact of interest rate swaps, commodity contracts and foreign currency contracts on the condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2014 and 2013:
|  | Amount of Gain R ecognized in Accumulated Other Comprehensive Loss for the T hree Months E nded September 30, |  | Locatio n of Gain (Loss) Recognized in Net I ncome on I neffective P ortion of H edges |  | Amount of L oss R eclassified from Accumulated Oth er Comprehensive Loss into Net I ncome for the T hree Months E nded September 30, |  |  | Amount of Gain (Loss) Recognized in Net I ncome on H edges (I neffective P ortion) for the T hree Months E nded September 30, |
|  | 201 4 |  |  | 201 3 |  |  |  | 201 4 |  |  | 201 3 |  |  | 201 4 |  |  | 201 3 |
Derivatives D esignated as H edging I nstruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | 989 |  |  | $ | — |  | Interest expense |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Derivatives N ot D esignated as H edging I nstruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps (1) |  | $ | — |  |  | $ | — |  | Interest expense |  | $ | — |  |  | $ | (376 | ) |  | $ | — |  |  | $ | 501 |
Commodity and foreign currency contracts |  | $ | — |  |  | $ | — |  | Cost of goods sold |  | $ | — |  |  | $ | — |  |  | $ | (199 | ) |  | $ | 578 |
|  | Amount of L oss R ecognized in Accumulated Other Comprehensive Loss for the Nine M onths E nded September 30, |  | Location of G ain (L oss) R ecognized in N et I ncome on I neffective P ortion of H edges |  | Amount of L oss R eclassified from Accumulated Other Comprehensive Loss into N et I ncome for the Nine M onths E nded September 30, |  |  | Amount of G ain (L oss) R ecognized in N et I ncome on H edges (I neffective P ortion) for the Nine M onths E nded September 30, |
|  | 201 4 |  |  | 201 3 |  |  |  | 201 4 |  |  | 201 3 |  |  | 201 4 |  |  | 201 3 |
Derivatives D esignated as H edging I nstruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | (719 | ) |  | $ | — |  | Interest expense |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps (1) |  | $ | — |  |  | $ | — |  | Interest expense |  | $ | — |  |  | $ | (2,381 | ) |  | $ | — |  |  | $ | 2,973 |
Commodity and foreign currency contracts |  | $ | — |  |  | $ | — |  | Cost of goods sold |  | $ | — |  |  | $ | — |  |  | $ | (344 | ) |  | $ | (540 | )
(1) Amounts recorded for the three and nine months ended September 30, 2013 relate to interest rate swap agreements outstanding as of May 30, 2012, the date the hedging relationships for these agreements were terminated.

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- 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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5618551-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5708775-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624181-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624258-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624163-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5708773-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624177-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35706170&loc=d3e41620-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5579245-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5579240-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=35706170&loc=d3e41641-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=35706170&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624171-113959 + Details
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