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DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 29, 2023

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

4. DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses certain interest rate derivative contracts to hedge interest rate exposures on its variable rate debt. The Company’s hedging program is not designated for trading or speculative purposes.

The Company recognizes derivative instruments as either assets or liabilities on the accompanying consolidated balance sheets at fair value. The Company records changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in its consolidated balance sheets as accumulated other comprehensive income (loss) and in its consolidated statements of comprehensive income (loss) as a loss or gain on cash flow hedge valuation.

On November 30, 2023, the Company entered into an interest rate swap agreement that the Company designated as cash flow hedge to fix the variable interest rate on a portion of the Company’s Term Loan (as defined in Note 5, “Debt Obligations”). The interest rate swap agreement has a total notional amount of $50.0 million, has a fixed annual interest rate of 4.77%, and expires on September 29, 2026. As of December 29, 2023, the effective portion of the Company’s interest rate swap agreement designated as a cash flow hedge before tax effects was $0.8 million, of which no amounts were reclassified from accumulated other comprehensive loss to interest expense in fiscal 2023. The Company expects to reclassify $0.1 million from accumulated other comprehensive loss to interest expense within the next twelve months.

The fair values of the Company’s outstanding derivatives designated as hedging instruments were as follows:

​

​	​	​	​	​	​	​	​	​
​		​		Fair Value of Derivative
​		​		Instruments as of
​	​	Balance Sheet Location	​	December 29, 2023		​	December 30, 2022
​	​	​	​	(in thousands)
Interest rate swap agreement	​	Current assets	​	$	46	​	$	—
Interest rate swap agreement	​	Other noncurrent liabilities	​	​	(887)	​	​	—

​

The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on other comprehensive loss was $0.8 million for the year ended December 29, 2023.

The accumulated balances and reporting period activities for the year ended December 29, 2023 related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows:

​

​	​	​	​	​	​	​
​	​	Gain (Loss) on		​	Accumulated Other
​		Derivative Instruments			Comprehensive Loss
​	​	(in thousands)
Balances at December 30, 2022	​	$	—	​	$	—
Other comprehensive loss before reclassifications	​	​	(841)	​	​	(841)
Amounts reclassified from accumulated other comprehensive income:	​	​	—	​	​	—
Income tax benefit (expense) related to derivative instruments	​	​	177	​	​	177
Net current-period other comprehensive loss	​	​	(664)	​	​	(664)
Balances at December 29, 2023	​	$	(664)	​	$	(664)

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- References

No definition available.

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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

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