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Financial Instruments | 9 Months Ended
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Sep. 30, 2024
Fair Value Disclosures [Abstract] |
Financial Instruments | Note 14 – Financial Instruments The Company’s financial instruments include cash equivalents, accounts receivable, other receivables, accounts payable, accrued liabilities, long-term debt, interest rate swaps and foreign currency hedges. For cash equivalents, accounts receivable, other receivables, accounts payable and accrued liabilities, the Company believes that the carrying values of its financial instruments approximate the fair values because of their short-term nature. For borrowings under the Credit Agreement in long-term debt, the Company believes that the fair value approximates the carrying value because the interest rates are variable. The Company uses derivative instruments to manage the variability of foreign currency obligations and interest rates. The Company does not enter into derivatives for speculative purposes. The fair value of the Company’s derivative instruments follows:
|  |  |  | September 30, |  |  | December 31, |
(in thousands) |  | Balance Sheet Location |  | 2024 |  |  | 2023 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Forward currency exchange contracts |  | Other long-term assets (liabilities) |  | $ | (2,597 | ) |  | $ | 2,664 |
Interest rate swap agreement |  | Other long-term assets (liabilities) |  |  | (3,212 | ) |  |  | (2,458 | )
Forward Currency Exchange Contracts The Company utilizes forward currency exchange contracts to manage its foreign currency exposure. The Company enters into forward currency exchange contracts for its operations in Mexico, Europe and Asia. These instruments are designated as cash flow hedges and the changes in fair value of the derivatives are recorded in accumulated other comprehensive loss on the consolidated balance sheet until earnings are affected by the variability of the cash flows. The fair value estimates for the Company’s forward currency exchange contracts are based on Level 2 inputs of the fair value hierarchy, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currencies. During the three and nine months ended September 30, 2024, the Company recorded an unrealized loss of $1.5 million ($1.2 million net of tax) and an unrealized loss of $5.3 million ($3.9 million net of tax), respectively, on its forward currency exchange contracts in other comprehensive income (loss) and transferred unrealized losses of $0.2 million and unrealized gains of $1.8 million, respectively, to cost of sales. During the three and nine months ended September 30, 2023, the Company recorded an unrealized gain of $2.3 million ($1.7 million net of tax) and an unrealized gain of $1.0 million ($0.8 million net of tax), respectively, on its forward currency exchange contracts in other comprehensive income (loss) and transferred unrealized gains of $1.2 million and $2.5 million, respectively, to cost of sales. The Company also has forward currency exchange contracts that have not been designated as accounting hedges and, therefore, changes in fair value are recorded in other (expense) income, net in the consolidated statements of income. Interest Rate Swap Agreement The Company utilizes an interest rate swap agreement to hedge a portion of its interest rate exposure on outstanding borrowings under the Credit Agreement. Under the interest rate swap agreement, the Company receives variable rate interest payments based on the one-month SOFR rate and pays fixed rate interest payments. The effect of the swap is to convert a portion of the floating rate interest expense to fixed interest rate expense. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the Credit Agreement, the interest rate swap was determined to be highly effective, and thus qualifies and has been designated as a cash flow hedge. As such, changes in the fair value of the interest rate swap are recorded in accumulated other comprehensive loss on the consolidated balance sheet until earnings are affected by the variability of cash flows. The fair value estimates for the Company’s respective interest rate swap agreements were based on Level 2 inputs of the fair value hierarchy, as the Company obtains the valuation from a third party active in relevant markets. The valuation of the interest rate swap agreements is primarily measured through various pricing models and discounted cash flow analysis that incorporate observable market parameters, such as interest rate yield curves and volatility. The Company entered into an interest rate swap agreement on July 20, 2023 and the fixed interest rate for the contract is 4.039%. As of September 30, 2024, the notional amount of this interest rate swap was $124.7 million. The Company’s previous interest rate swap agreement matured on July 20, 2023. During the three and nine months ended September 30, 2024, the Company recorded an unrealized loss of $3.5 million ($2.6 million net of tax) and an unrealized loss of $0.8 million ($0.6 million net of tax), respectively, on the interest rate swap in other comprehensive income (loss). During the three and nine months ended September 30, 2023, the Company recorded an unrealized loss of $1.5 million ($1.1 million net of tax) and an unrealized loss of $1.0 million ($0.7 million net of tax), respectively, on the interest rate swap in other comprehensive income (loss).

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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