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Note 11 - Derivative Financial Instruments | 6 Months Ended
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Dec. 31, 2022
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 11) Derivative Financial Instruments The Company is exposed to market risks from changes in interest rates, commodity prices and changes in foreign currency rates. The Company selectively uses derivative financial instruments in order to manage certain of these risks. Information about the Company’s derivative financial instruments is as follows: Interest Rate Swaps From time to time as dictated by market opportunities, the Company enters into interest rate swap agreements designed to manage exposure to interest rates on the Company’s variable rate indebtedness. The Company recognizes all derivatives on its balance sheet at fair value. The Company has designated its interest rate swap agreements, including those that may be forward-dated, as cash flow hedges, and changes in the fair value of the swaps are recognized in other comprehensive income until the hedged items are recognized in earnings. Hedge ineffectiveness, if any, associated with the swaps will be reported by the Company in interest expense. The Company’s effective swap agreements convert the base borrowing rate on $175 million of debt due under our revolving credit agreement from a variable rate equal to 1 month LIBOR to a weighted average fixed rate of 1.18% at December 31, 2022. The fair value of the swaps, recognized in accrued liabilities or other current assets and in other comprehensive income, is as follows (in thousands, except percentages):
Effective Date |  | Notional Amount |  |  | Fixed Interest Rate |  | Maturity |  | December 31, 2022 |  |  | June 30, 2022 |
August 6, 2018 |  | 25,000 |  |  | 2.83% |  | August 6, 2023 |  | $ | 323 |  |  | $ | 48 |
March 23, 2020 |  | 100,000 |  |  | 0.91% |  | March 23, 2025 |  |  | 7,496 |  |  |  | 5,538 |
April 24, 2020 |  | 25,000 |  |  | 0.88% |  | April 24, 2025 |  |  | 1,938 |  |  |  | 1,447 |
May 24, 2020 |  | 25,000 |  |  | 0.91% |  | March 24, 2025 |  |  | 1,864 |  |  |  | 1,387 |
|  |  |  |  |  |  |  |  | $ | 11,621 |  |  | $ | 8,420 |
The Company reported no losses for the three and six months ended December 31, 2022, as a result of hedge ineffectiveness. Future changes in these swap arrangements, including termination of the agreements, may result in a reclassification of any gain or loss reported in accumulated other comprehensive income (loss) into earnings as an adjustment to interest expense. Accumulated other comprehensive income (loss) related to these instruments is being amortized into interest expense concurrent with the hedged exposure. Foreign Exchange Contracts Forward foreign currency exchange contracts are used to limit the impact of currency fluctuations on certain anticipated foreign cash flows, such as collections from customers and loan payments between subsidiaries. The Company enters into such contracts for hedging purposes only. The Company has designated certain of these currency contracts as hedges, and changes in the fair value of these contracts are recognized in other comprehensive income until the hedged items are recognized in earnings. Hedge ineffectiveness, if any, associated with these contracts will be reported in net income. At December 31, 2022 and June 30, 2022, the Company had outstanding forward contracts related to hedges of intercompany loans with net unrealized losses of $0.6 million and losses of $0.6 million, respectively, which approximate the unrealized gains and losses on the related loans. The contracts have maturity dates ranging from fiscal year 2024 to 2025, which correspond to the related intercompany loans. The notional amounts of the Company’s forward contracts, by currency, are as follows (in thousands):
Currency |  | December 31, 2022 |  |  | June 30, 2022 |
EUR |  |  | - |  |  |  | 5,750 |
CAD |  |  | 16,600 |  |  |  | 16,600 |
JPY |  |  | 2,100,000 |  |  |  | 1,000,000 |
The table below presents the fair value of derivative financial instruments as well as their classification on the balance sheet (in thousands):
| Asset Derivatives |
| December 31, 2022 |  | June 30, 2022 |
Derivative designated | Balance |  |  |  |  | Balance |  |  |  |
as hedging instruments | Sheet |  |  |  |  | Sheet |  |  |  |
| Line Item |  | Fair Value |  | Line Item |  | Fair Value |
Interest rate swaps | Prepaid expenses and other current assets |  | $ | 11,621 |  | Prepaid expenses and other current assets |  | $ | 8,420 |
Foreign exchange contracts | Prepaid expenses and other current assets |  |  | - |  | Prepaid expenses and other current assets |  |  | 122 |
|  |  | $ | 11,621 |  |  |  | $ | 8,542 |
| Liability Derivatives |
| December 31, 2022 |  | June 30, 2022 |
Derivative designated | Balance |  |  |  |  | Balance |  |  |  |
as hedging instruments | Sheet |  |  |  |  | Sheet |  |  |  |
| Line Item |  | Fair Value |  | Line Item |  | Fair Value |
Foreign exchange contracts | Accrued liabilities |  | $ | 842 |  | Accrued liabilities |  | $ | - |
|  |  | $ | 842 |  |  |  | $ | - |
The table below presents the amount of gain (loss) recognized in comprehensive income on our derivative financial instruments (effective portion) designated as hedging instruments and their classification within comprehensive income for the periods ended (in thousands):
|  | Three Months Ended |  |  | Six Months Ended |
|  | December 31, |  |  | December 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Interest rate swaps |  | $ | 535 |  |  | $ | 1,901 |  |  | $ | 4,760 |  |  | $ | 1,840 |
Foreign exchange contracts |  |  | (574 | ) |  |  | 18 |  |  |  | (963 | ) |  |  | 222 |
|  | $ | (39 | ) |  | $ | 1,919 |  |  | $ | 3,797 |  |  | $ | 2,062 |
The table below presents the amount reclassified from accumulated other comprehensive income (loss) to net income for the periods ended (in thousands):
Details about Accumulated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Affected line item
Other Comprehensive |  | Three Months Ended |  |  | Six Months Ended |  | in the Unaudited
Income (Loss) Components |  | December 31, |  |  | December 31, |  | Condensed Statements
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  | of Operations
Interest rate swaps |  | $ | (1,105 | ) |  | $ | 602 |  |  | $ | (1,559 | ) |  | $ | 1,204 |  | Interest expense
Foreign exchange contracts |  |  | 599 |  |  |  | 137 |  |  |  | 1,095 |  |  |  | 619 |  | Other non-operating (income) expense, net
|  | $ | (506 | ) |  | $ | 739 |  |  | $ | (464 | ) |  | $ | 1,823 |  |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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