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Note 3 - Derivative Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
3
. Derivative Instruments and Hedging Activities
 
The Company records all derivatives in accordance with Accounting Standards Codification (ASC) 815,
Derivatives and Hedging
, which requires derivative instruments be reported on the condensed 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 Company is exposed to significant price fluctuations in commodities it uses as raw materials, and periodically utilizes commodity derivatives to mitigate the impact of these potential price fluctuations on its financial results and its economic well-being. These derivatives typically have maturities of less than eighteen months. At June 30, 2016, December 31, 2015 and June 30, 2015, the Company had one, one and three commodity contracts outstanding, respectively, covering the purchases of copper.
 
Because these contracts do not qualify for hedge accounting, the related gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Net gains recognized for the three and six months ended June 30, 2016 were $82 and $76, respectively. Net losses recognized for the three and six months ended June 30, 2015 were $315 and $1,041, respectively.
 
Foreign Currencies
 
The Company is exposed to foreign currency exchange risk as a result of transactions denominated in currencies other than the U.S. Dollar. The Company periodically utilizes foreign currency forward purchase and sales contracts to manage the volatility associated with certain foreign currency purchases in the normal course of business. Contracts typically have maturities of twelve months or less. As of June 30, 2016, December 31, 2015 and June 30, 2015, the Company had twelve, six and two foreign currency contracts outstanding, respectively.
 
Because these contracts do not qualify for hedge accounting, the related gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Net gains (losses) recognized for the three and six months ended June 30, 2016 were $1 and $(178), respectively. Net losses recognized for the three and six months ended June 30, 2015 were $37 and $358, respectively.
 
Interest Rate Swaps
 
In October 2013, the Company entered into two interest rate swap agreements, and in May 2014, the Company entered into an additional interest rate swap agreement. The Company formally documented all relationships between interest rate hedging instruments and the related 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, and accordingly, the effective portions of the gains or losses are reported as a component of accumulated other comprehensive loss (AOCL). The cash flows of the swaps are recognized as adjustments to interest expense each period. The ineffective portions of the derivatives’ changes in fair value, if any, are immediately recognized in earnings.
 
Fair Value
 
 
The following table presents the fair value of all of the Company’s derivatives:
 
 
 
June 30,
2016
 
 
December 31,
2015
 
Commodity contracts
   $ 82     $ (400 )
Foreign currency contracts
     87       (171 )
Interest rate swaps
     (4,733 )     (2,618 )
 
The fair value of the commodity and foreign currency contracts are included in other assets, and the fair value of the interest rate swaps are included in other long-term liabilities in the condensed consolidated balance sheets as of June 30, 2016 and December 31, 2015. Excluding the impact of credit risk, the fair value of the derivative contracts as of June 30, 2016 and December 31, 2015 is a liability of $4,672 and $3,248, respectively, which represents the amount the Company would need to pay to exit the agreements on those dates.
 
The amount of losses recognized in AOCL in the condensed consolidated balance sheets on the effective portion of interest rate swaps designated as hedging instruments for the three and six months ended June 30, 2016 were $134 and $1,288, respectively. The amount of gains (losses) for the three and six months ended June 30, 2015 were $266 and $(1,006), respectively.
 
The amount of gains (losses) recognized in cost of goods sold in the condensed consolidated statements of comprehensive income for commodity and foreign currency contracts not designated as hedging instruments for the three and six months ended June 30, 2016 were $83 and $(102), respectively. The amount of losses for the three and six months ended June 30, 2015 were $352 and $1,399, respectively.