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Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments The Company principally uses derivative financial instruments to reduce the impact of foreign currency fluctuations and interest rate variability on the Company's results of operations. The principal derivative financial instruments the Company enters into are foreign exchange forward contracts and interest rate swaps. The Company does not enter into derivative financial instrument contracts for trading or speculative purposes. Foreign Exchange Derivative Instruments Foreign exchange forward contracts are foreign exchange derivative instruments primarily used to reduce foreign currency risk related to transactions denominated in a currency other than functional currency. These instruments are designated as cash flow hedges. The periods of the foreign exchange forward contracts correspond to the periods of the hedged forecasted transactions, which do not exceed 24 months subsequent to the latest balance sheet date. The primary foreign exchange forward contracts pertain to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won and the euro. The gross U.S. dollar equivalent notional amount outstanding of all foreign exchange forward contracts designated under hedge accounting as of September 30, 2024 and December 31, 2023 was $234.3 million and $209.6 million, respectively. Interest Rate Derivative Instruments From time to time, the Company enters into interest rate swap contracts to reduce interest rate risk related to floating rate debt. Under the contracts, the Company pays fixed and receives variable rate interest, in effect converting a portion of its floating rate debt to fixed rate debt. Interest rate swap contracts are accounted for as cash flow hedges. The notional value of the Company's outstanding interest rate swap contracts was $100.0 million as of September 30, 2024 and December 31, 2023. Impact on Financial Statements The fair value of hedge instruments recognized on the unaudited condensed consolidated balance sheets was as follows:
(in thousands) |  |  |  | September 30, |  | December 31,
Balance Sheet Location |  | Hedge Instrument Type |  | 2024 |  | 2023
Prepaid and other assets |  | Foreign exchange forward |  | $ | 1,912 |  |  | $ | 4,378 |
|  | Interest rate swap |  | 79 |  |  | 452 |
Accrued expenses and other liabilities |  | Foreign exchange forward |  | 5,246 |  |  | 1,931 |
|  | Interest rate swap |  | 40 |  |  | 63 |
Other noncurrent liabilities |  | Foreign exchange forward |  | 19 |  |  | — |
|  | Interest rate swap |  | — |  |  | 88 |
The hedge instrument (losses) gains recognized in accumulated other comprehensive loss, net of tax was as follows:
|  | Three months ended |  | Nine months ended
|  | September 30, |  | September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Type of hedge |  |  |  |  |  |  |  |
Foreign exchange forward |  | $ | (3,635) |  |  | $ | 3,658 |  |  | $ | 1,702 |  |  | $ | 6,719 |
Interest rate swap |  | (258) |  |  | 432 |  |  | 511 |  |  | 1,601 |
Total |  | $ | (3,893) |  |  | $ | 4,090 |  |  | $ | 2,213 |  |  | $ | 8,320 |
Gains and losses on derivative instruments designated as cash flow hedges are reclassified from accumulated other comprehensive loss, net of tax at the time the forecasted hedged transaction impacts the statements of operations or at the time the hedge is determined to be ineffective. Based on the current valuation, during the next 12 months the Company expects to reclassify a net gain of $0.3 million related to foreign exchange derivative instruments from accumulated other comprehensive loss, net of tax, into cost of goods sold and a net gain of less than $0.1 million related to interest rate derivative instruments from accumulated other comprehensive loss, net of tax, into interest expense, net. For further information related to amounts recognized in accumulated other comprehensive loss, net of tax, see Note 12. The hedge instrument gains (losses) recognized on the unaudited condensed consolidated statements of operations were as follows:
|  | Three months ended |  | Nine months ended
|  | September 30, |  | September 30,
(in thousands) |  | 2024 |  | 2023 |  | 2024 |  | 2023
Location of gains (losses) in statements of operations |  |  |  |  |  |  |  |
Foreign exchange forward: |  |  |  |  |  |  |  |
Cost of goods sold |  | $ | 3,040 |  |  | $ | 682 |  |  | $ | 8,443 |  |  | $ | 6,975 |
Selling, general and administrative (1) |  | (1,634) |  |  | 1,106 |  |  | (253) |  |  | 1,463 |
Total |  | $ | 1,406 |  |  | $ | 1,788 |  |  | $ | 8,190 |  |  | $ | 8,438 |
Interest Rate Swap: |  |  |  |  |  |  |  |
Interest expense, net |  | $ | 256 |  |  | $ | 241 |  |  | $ | 773 |  |  | $ | 429 |
Total |  | $ | 256 |  |  | $ | 241 |  |  | $ | 773 |  |  | $ | 429 |
_______________________________________________________________________________ (1) Relates to net (losses) gains on foreign exchange forward contracts derived from previously designated cash flow hedges. Credit Risk The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions, as well as its own credit quality, and considers the risk of counterparty default to be minimal.

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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/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
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