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Note 10 - Derivative Financial Instruments
 12 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]

10. Derivative Financial Instruments

 

Interest Rate Swaps

 

The fair value of the swaps recognized in accrued liabilities and in other comprehensive income (loss) is as follows (in thousands):

 

Effective Date

 

Notional

  

Fixed

 

Maturity

 

Fair Value at June 30,

 
  

Amount

  

Interest Rate

   

2025

  

2024

 

February 23, 2023

  100,000  

0.86%

 

March 23, 2025

 $-  $3,045 

May 25, 2023

  25,000  

0.81%

 

April 24, 2025

  -   863 

February 24, 2023

  25,000  

0.86%

 

March 24, 2025

  -   765 
          $-  $4,673 

 

The Company reported no losses for the years ended June 30, 2025, 2024, and 2023, 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 sales to foreign 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 June 30, 2025 and 2024, the Company had outstanding forward contracts related to hedges of intercompany loans that had an immaterial amount of net unrealized loss.  The contracts have maturity dates in fiscal year 2025, which correspond to the related intercompany loans.  The notional amounts of these instruments, by currency in thousands, are as follows:

 

Currency

 

2025

  

2024

 

USD

  -   4,159 

CAD

  -   6,079 

JPY

  3,250,000   - 

 

The table below presents the fair value of derivative financial instruments as well as their classification on the balance sheet at June 30, (in thousands):

 

 

Asset Derivatives

 
 

2025

 

2024

 

Derivative designated as hedging instruments

Balance Sheet Line Item

  Fair Value 

Balance Sheet Line Item

  Fair Value 

Interest rate swaps

Prepaid expenses and other current assets

 $- 

Prepaid expenses and other current assets

 $4,673 
  $-   $4,673 

 

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):

 

  

2025

  

2024

  

2023

 

Interest rate swaps

 $149  $1,154  $6,567 

Foreign exchange contracts

  -   315   (437)
  $149  $1,469  $6,130 

 

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 Other Comprehensive Income (Loss) Components

 2025  2024  2023 

Affected line item in the Statements of Operations

Interest rate swaps

 (4,468) (6,865) (4,704)

Interest expense

Foreign exchange contracts

 -  (215) 672 

Other non-operating income

  $(4,468) $(7,080) $(4,032)