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Derivatives
 12 Months Ended
Dec. 30, 2011
Derivatives [Abstract]  
Derivatives

Note 4 – Derivatives

Derivatives are carried as assets or liabilities at their fair values in accordance with ASC 820, “Fair Value Measurements”. The Company has entered into two derivative contracts, neither of which qualifies for hedge accounting. The gains and losses on these instruments due to changes in fair value are recognized in its consolidated statements of operations.

 

The Company is exposed to certain risks relating to its ongoing business operations. During fiscal 2011, the primary risks we managed using derivative instruments were foreign currency exchange rate risk and variable interest rate risk.

In prior years the Company entered into an interest rate swap agreement to hedge the exposure on its variable rate debt. This agreement expired in January 2011.

In January 2011, the Company entered into a foreign exchange collar contract to hedge its exposure to variability in the Euro/US Dollar exchange rate. This agreement expired in December 2011. As part of its business, the Company regularly imports products from Europe that require payment in Euros. This contract required us to purchase and sell Euros throughout the year to pay for forecasted imports. During fiscal 2011 the collar was used to purchase 3.15 million Euros.

Financial Statement Presentation

The effect of the Company’s derivative instruments on its consolidated statements of operations for the fiscal years ended December 30, 2011, December 24, 2010, and December 25, 2009 was as follows:

 

                             
   

Location of

income

(expense)

   Fiscal Year Ended  
   

recognized on
derivative

   December 30,
2011		     December 24,
2010		     December 25,
2009		  

Derivatives not designated as hedging instruments:

                            

Foreign currency collars gain (loss)

   Cost of sales     (46 )      —         —    

Interest rate swaps

   Gain on fluctuation of interest rate swap     81       910       658