XML 30 R19.htm IDEA: XBRL DOCUMENT
v3.20.2

Derivative Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2020
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Note 12 - Derivative Financial Instruments Our earnings and cash flows are subject to fluctuations due to changes in foreign currency exchange rates and interest rates. We selectively use derivative financial instruments including foreign currency forward contracts and interest rate swaps to manage our exposure to these risks. The use of derivative financial instruments exposes the Company to credit risk, which relates to the risk of nonperformance by a counterparty to the derivative contracts. We manage our credit risk by entering derivative contracts with only highly rated financial institutions and by using netting agreements. The effective portion of derivative gains and losses are recorded in accumulated other comprehensive (loss) income until the hedged transaction affects earnings upon settlement, at which time they are reclassified to cost of goods sold or net sales. If it is probable that an anticipated hedged transaction will not occur by the end of the originally specified time period, we reclassify the gains or losses related to that hedge from accumulated other comprehensive (loss) income to other income (expense). We assess hedge effectiveness qualitatively by verifying that the critical terms of the hedging instrument and the forecasted transaction continue to match, and that there have been no adverse developments that have increased the risk that the counterparty will default. Foreign Currency Hedges We use forward contracts to mitigate currency risk related to a portion of our forecasted foreign currency revenues and costs. The currency forward contracts are designed as cash flow hedges and are recorded in the Condensed Consolidated Balance Sheets at fair value. We continue to monitor the Company’s overall currency exposure and may elect to add cash flow hedges in the future. At September 30, 2020, we had a net unrealized loss of $458 in accumulated other comprehensive (loss) income, of which $425 is expected to be reclassified to earnings within the next 12 months. At September 30, 2019 we had a net unrealized gain of $507 in accumulated other comprehensive (loss) income. The notional amount of foreign currency forward contracts outstanding was $17,015 at September 30, 2020. Interest Rate Swaps We use interest rate swaps to convert a portion of our revolving credit facility’s outstanding balance from a variable rate of interest to a fixed rate. As of September 30, 2020, we have agreements to fix interest rates on $50,000 of long-term debt through February 2024. The difference to be paid or received under the terms of the swap agreements will be recognized as an adjustment to interest expense when settled. These swaps are treated as cash flow hedges and consequently, the changes in fair value are recorded in other comprehensive (loss) income. The estimated net amount of the existing losses that are reported in accumulated other comprehensive (loss) income that are expected to be reclassified into earnings within the next twelve months is approximately $517. The location and fair values of derivative instruments designated as hedging instruments in the Condensed Consolidated Balance Sheets as of September 30, 2020, are shown in the following table:
|  | As of |
|  | September 30, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Interest rate swaps reported in Other current assets |  | $ | — |  |  | $ | 82 |
Interest rate swaps reported in Accrued liabilities |  | $ | (671 | ) |  | $ | — |
Interest rate swaps reported in Other long-term obligations |  | $ | (1,789 | ) |  | $ | (78 | )
Foreign currency hedges reported in Other current assets |  | $ | — |  |  | $ | 580 |
Foreign currency hedges reported in Accrued liabilities |  | $ | (615 | ) |  | $ | — |
The Company has elected to net its foreign currency derivative assets and liabilities in the balance sheet in accordance with ASC 210-20 (Balance Sheet, Offsetting). On a gross basis, there were foreign currency derivative assets of $0 and foreign currency derivative liabilities of $615 at September 30, 2020. The effect of derivative instruments on the Condensed Consolidated Statements of Earnings is as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Foreign Exchange Contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amounts reclassified from AOCI to earnings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | (78 | ) |  | $ | — |  |  | $ | (5 | ) |  | $ | — |
Cost of goods sold |  |  | (407 | ) |  |  | 286 |  |  |  | (678 | ) |  |  | 562 |
Selling, general and administrative expense |  |  | — |  |  |  | 23 |  |  |  | (5 | ) |  |  | 62 |
Total (loss) gain reclassified from AOCI to earnings |  |  | (485 | ) |  |  | 309 |  |  |  | (688 | ) |  |  | 624 |
Gain recognized in other expense for hedge ineffectiveness |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |
Total derivative (loss) gain on foreign exchange contracts recognized in earnings |  | $ | (485 | ) |  | $ | 309 |  |  | $ | (685 | ) |  | $ | 624 |
Interest Rate Swaps: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Expense) benefit recorded in Interest expense |  | $ | (171 | ) |  | $ | 117 |  |  | $ | (242 | ) |  | $ | 430 |
Total (losses) gains on derivatives |  | $ | (656 | ) |  | $ | 426 |  |  | $ | (927 | ) |  | $ | 1,054 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration