XML 23 R12.htm IDEA: XBRL DOCUMENT v3.25.4
Note 5 - Derivative Financial Instruments
 9 Months Ended
Jan. 31, 2026
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

5.   DERIVATIVE FINANCIAL INSTRUMENTS

 

From time to time, the Company enters into aluminum swap contracts to partially mitigate its exposure to changes in the cost of aluminum containers. Such financial instruments are designated and accounted for as cash flow hedges. Accordingly, gains or losses attributable to the effective portion of the cash flow hedge are reported in accumulated other comprehensive income (loss) (“AOCI”) and reclassified into cost of sales in the period in which the hedged transaction affects earnings. The ineffective portion of the change in fair value of our cash flow hedge was immaterial. The following summarizes the gains recognized in the Condensed Consolidated Statements of Income and AOCI:

 

  

(In thousands)

 
  

Three Fiscal Months Ended

  

Nine Fiscal Months Ended

 
  

January 31,

2026

  

January 25,

2025

  

January 31,

2026

  

January 25,

2025

 

Recognized in AOCI:

                

Income before income taxes

 $6,531  $1,704  $25,458  $4,927 

Less: income tax provision

  1,541   402   6,008   1,157 

Net

  4,990   1,302   19,450   3,770 

Reclassified from AOCI to cost of sales:

                

Gain before income taxes

  8,496   1,395   20,470   2,536 

Less: income tax provision

  2,005   330   4,830   598 

Net

  6,491   1,065   15,640   1,938 

Net change to AOCI

 $(1,501) $237  $3,810  $1,832 

 

As of January 31, 2026, the notional amount of our outstanding aluminum swap contracts was $30.9 million and, assuming no change in commodity prices, $11.4 million of unrealized gain before tax will be reclassified from AOCI and recognized in earnings over the next 12 fiscal months. The Company’s policy for the maximum length of time for which it may hedge exposure to the variability of future cash flows is three years.

 

The Company is not subject to any legally enforceable master netting arrangements and does not offset fair value amounts recognized for derivative instruments. As of January 31, 2026, the fair value of the derivative asset was $11.4 million, which was included in prepaid and other current assets. As of May 3, 2025, the fair value of the derivative asset was $7.4 million, which was included in prepaid and other current assets, and the fair value of the derivative liability was $1.0 million, which was included in accrued liabilities. Such valuation does not entail a significant amount of judgment and the inputs that are significant to the fair value measurement are Level 2 as defined by the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.