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Financial Instruments and Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Financial Instruments and Derivative Financial Instruments Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. The fair values of revolving credit agreements and long-term debt, excluding finance leases, were determined using current rates offered for similar obligations taking into account company credit risk. This valuation methodology is Level 2 as defined in the fair value hierarchy. At March 31, 2024, the carrying value and fair value of revolving credit agreements and long-term debt, excluding finance leases, was $448.1 million and $447.3 million, respectively. At December 31, 2023, the carrying value and fair value of revolving credit agreements and long-term debt, excluding finance leases, was $466.7 million and $464.0 million, respectively. Derivative Financial Instruments The Company uses forward foreign currency exchange contracts to partially reduce risks related to transactions denominated in foreign currencies. These contracts hedge firm commitments and forecasted transactions relating to cash flows associated with sales and purchases denominated in non-functional currencies. The Company offsets fair value amounts related to foreign currency exchange contracts executed with the same counterparty. Changes in the fair value of forward foreign currency exchange contracts that are effective as hedges are recorded in OCI. Deferred gains or losses are reclassified from OCI to the unaudited condensed consolidated statements of operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in cost of sales. The Company periodically enters into foreign currency exchange contracts that do not meet the criteria for hedge accounting. These derivatives are used to reduce the Company's exposure to foreign currency risk related to forecasted purchase or sales transactions or forecasted intercompany cash payments or settlements. Gains and losses on these derivatives are generally recognized in cost of sales. The Company uses interest rate swap agreements to partially reduce risks related to floating rate financing agreements that are subject to changes in the market rate of interest. Terms of the interest rate swap agreements require the Company to receive a variable interest rate and pay a fixed interest rate. The Company's interest rate swap agreements and the associated variable rate financings are predominately based upon the one-month Secured Overnight Financing Rate ("SOFR"). Changes in the fair value of interest rate swap agreements that are effective as hedges are recorded in OCI. Deferred gains or losses are reclassified from OCI to the unaudited condensed consolidated statements of operations in the same period as the gains or losses from the underlying transactions are recorded and are generally recognized in interest expense. Cash flows from hedging activities are reported in the unaudited condensed consolidated statements of cash flows with the same classification as the hedged item, generally as a component of cash flows from operations. The Company measures its derivatives at fair value on a recurring basis using significant observable inputs. This valuation methodology is Level 2 as defined in the fair value hierarchy. The Company uses a present value technique that incorporates yield curves and foreign currency spot rates to value its derivatives and also incorporates the effect of the Company's and its counterparties' credit risk into the valuation. The Company does not currently hold any nonderivative instruments designated as hedges or any derivatives designated as fair value hedges. Foreign Currency Derivatives: The Company held forward foreign currency exchange contracts with total notional amounts of $0.6 billion at March 31, 2024, primarily denominated in euros, Japanese yen, Chinese renminbi, U.S. dollars, British pounds, Swedish kroner, Mexican pesos, and Australian dollars. The Company held forward foreign currency exchange contracts with total notional amounts of $0.9 billion at December 31, 2023, primarily denominated in euros, Japanese yen, U.S. dollars, Chinese renminbi, British pounds, Swedish kroner, Mexican pesos and Australian dollars. The fair value of these contracts approximated a net liability of $24.0 million and $12.2 million at March 31, 2024 and December 31, 2023, respectively. Forward foreign currency exchange contracts that qualify for hedge accounting are generally used to hedge transactions expected to occur within the next 36 months. The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in OCI. Based on market valuations at March 31, 2024, $26.1 million of the amount of net deferred loss included in OCI at March 31, 2024 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur. Interest Rate Derivatives: The Company holds certain contracts that hedge interest payments on its $225.0 million term loan borrowings. In addition, the Company holds certain contracts that hedge interest payments on Bolzoni's debt. The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at March 31, 2024 and December 31, 2023:
Notional Amount |  | Average Fixed Rate |  |  |
MARCH 31 |  | DECEMBER 31 |  | MARCH 31 |  | DECEMBER 31 |  |  |
2024 |  | 2023 |  | 2024 |  | 2023 |  | Term at March 31, 2024 |
$ | 180.0 |  |  | $ | 180.0 |  |  | 1.65 | % |  | 1.65 | % |  | Extending to May 2027 |
$ | 6.2 |  |  | $ | 7.5 |  |  | 0.56 | % |  | 0.51 | % |  | Extending to May 2027 |
The fair value of all interest rate swap agreements was a net asset of $13.6 million and $11.9 million at March 31, 2024 and December 31, 2023, respectively. The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in OCI. Based on market valuations at March 31, 2024, $6.5 million of the amount included in OCI as net deferred gain is expected to be reclassified as income in the unaudited condensed consolidated statements of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements. The following table summarizes the fair value of derivative instruments reflected on a gross basis by contract as recorded in the unaudited condensed consolidated balance sheets:
| Asset Derivatives |  | Liability Derivatives
| Balance Sheet Location |  | MARCH 31 2024 |  | DECEMBER 31 2023 |  | Balance Sheet Location |  | MARCH 31 2024 |  | DECEMBER 31 2023
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  |  |  |  |  |
Current | Prepaid expenses and other |  | $ | 6.0 |  |  | $ | 5.6 |  |  | Prepaid expenses and other |  | $ | — |  |  | $ | — |
Long-term | Other non-current assets |  | 7.6 |  |  | 6.3 |  |  | Other non-current assets |  | — |  |  | — |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |
Current | Prepaid expenses and other |  | 2.1 |  |  | 1.2 |  |  | Prepaid expenses and other |  | 0.9 |  |  | 1.4 |
| Other current liabilities |  | 3.7 |  |  | 7.2 |  |  | Other current liabilities |  | 26.2 |  |  | 22.2 |
Long-term | Other non-current assets |  | — |  |  | 2.7 |  |  | Other non-current assets |  | — |  |  | 0.5 |
| Other long-term liabilities |  | 0.4 |  |  | — |  |  | Other long-term liabilities |  | 2.4 |  |  | 0.4 |
Total derivatives designated as hedging instruments |  | $ | 19.8 |  |  | $ | 23.0 |  |  |  |  | $ | 29.5 |  |  | $ | 24.5 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  |
Current | Prepaid expenses and other |  | 0.1 |  |  | 1.1 |  |  | Prepaid expenses and other |  | 0.2 |  |  | 0.6 |
| Other current liabilities |  | 0.3 |  |  | 2.3 |  |  | Other current liabilities |  | 0.9 |  |  | 1.6 |
Total derivatives not designated as hedging instruments |  | $ | 0.4 |  |  | $ | 3.4 |  |  |  |  | $ | 1.1 |  |  | $ | 2.2 |
Total derivatives |  | $ | 20.2 |  |  | $ | 26.4 |  |  |  |  | $ | 30.6 |  |  | $ | 26.7 |
The following table summarizes the offsetting of the fair value of derivative instruments on a gross basis by counterparty as recorded in the unaudited condensed consolidated balance sheets:
|  | Derivative Assets as of March 31, 2024 |  | Derivative Liabilities as of March 31, 2024
|  | Gross Amounts of Recognized Assets |  | Gross Amounts Offset |  | Net Amounts Presented |  | Net Amount |  | Gross Amounts of Recognized Liabilities |  | Gross Amounts Offset |  | Net Amounts Presented |  | Net Amount
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  | $ | 13.6 |  |  | $ | — |  |  | $ | 13.6 |  |  | $ | 13.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency exchange contracts |  | 1.1 |  |  | (1.1) |  |  | — |  |  | — |  |  | 25.1 |  |  | (1.1) |  |  | 24.0 |  |  | 24.0 |
Total derivatives |  | $ | 14.7 |  |  | $ | (1.1) |  |  | $ | 13.6 |  |  | $ | 13.6 |  |  | $ | 25.1 |  |  | $ | (1.1) |  |  | $ | 24.0 |  |  | $ | 24.0 |
|  | Derivative Assets as of December 31, 2023 |  | Derivative Liabilities as of December 31, 2023
|  | Gross Amounts of Recognized Assets |  | Gross Amounts Offset |  | Net Amounts Presented |  | Net Amount |  | Gross Amounts of Recognized Liabilities |  | Gross Amounts Offset |  | Net Amounts Presented |  | Net Amount
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  | $ | 11.9 |  |  | $ | — |  |  | $ | 11.9 |  |  | $ | 11.9 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency exchange contracts |  | 2.5 |  |  | (2.5) |  |  | — |  |  | — |  |  | 14.7 |  |  | (2.5) |  |  | 12.2 |  |  | 12.2 |
Total derivatives |  | $ | 14.4 |  |  | $ | (2.5) |  |  | $ | 11.9 |  |  | $ | 11.9 |  |  | $ | 14.7 |  |  | $ | (2.5) |  |  | $ | 12.2 |  |  | $ | 12.2 |
The following table summarizes the pre-tax impact of derivative instruments as recorded in the unaudited condensed consolidated statements of operations:
|  |  |  |  | Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) |  | Location of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) |  |  |  |  |  | Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)
|  |  |  | THREE MONTHS ENDED |  |  |  |  |  | THREE MONTHS ENDED
|  |  |  |  | MARCH 31 |  |  |  |  |  |  |  | MARCH 31
Derivatives Designated as Hedging Instruments |  |  |  |  |  | 2024 |  | 2023 |  |  |  |  |  |  |  | 2024 |  | 2023
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  |  |  |  |  | $ | 3.4 |  |  | $ | (3.8) |  |  | Interest expense |  |  |  |  |  | $ | 1.9 |  |  | $ | (1.2) |
Foreign currency exchange contracts |  |  |  |  |  | (18.6) |  |  | 4.9 |  |  | Cost of sales |  |  |  |  |  | (9.2) |  |  | (9.7) |
Total |  |  |  |  |  | $ | (15.2) |  |  | $ | 1.1 |  |  |  |  |  |  |  |  | $ | (7.3) |  |  | $ | (10.9) |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  | Location of Gain or (Loss) Recognized in Income on Derivative |  |  |  |  |  | 2024 |  | 2023
Cash Flow Hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency exchange contracts |  |  |  |  |  |  |  |  |  | Cost of sales |  |  |  |  |  | $ | (3.3) |  |  | $ | (0.1) |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (3.3) |  |  | $ | (0.1) |

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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 + Details
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