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Derivative Financial Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2012
Derivative Financial Instruments and Hedging Activities [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
9. | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES:
The Company conducts business in various foreign countries and, from time to time, settles transactions in foreign currencies. The Company has established a program that utilizes foreign currency forward contracts to offset the risk associated with the effects of certain foreign currency exposures, typically arising from sales contracts denominated in Canadian currency. Instruments that do not qualify for cash flow hedge accounting treatment are re-measured at fair value on each balance sheet date and resulting gains and losses are recognized in net income. As of December 31, 2012 and 2011, the total notional amount of the derivative contracts not designated as hedges was $2.7 million (CAD$2.6 million) and $1.5 million (CAD$1.5million), respectively. As of December 31, 2012 and 2011, the total notional amount of the derivative contracts designated as hedges was $12.4 million (CAD$12.3 million) and $8.5 million (CAD$8.6 million), respectively. For each derivative contract entered into in which the Company seeks to obtain cash flow hedge accounting treatment, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness. This process includes linking all derivatives to specific firm commitments or forecasted transactions and designating the derivatives as cash flow hedges. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative contracts that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of these hedged items is reflected in other comprehensive income on the Consolidated Statement of Stockholders’ Equity. If it is determined that a derivative contract is not highly effective, or that it has ceased to be a highly effective hedge, the Company will be required to discontinue hedge accounting with respect to that derivative contract prospectively. All of the Company’s Canadian forward contracts have maturities not longer than 12 months as of December 31, 2012, except one contract with a notional value of $3.1 million (CAD$3.1 million) which has a remaining maturity of 15 months. The balance sheet location and the fair values of derivative instruments are:
|  | December 31, |
Foreign Currency Forward Contracts |  | 2012 |  |  | 2011 |
|  | (in thousands) |
Assets |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments Prepaid expenses and other |  | $ | — |  |  | $ | 66 |
Derivatives not designated as hedging instruments Prepaid expenses and other |  |  | — |  |  |  | 87 |
Total assets |  | $ | — |  |  | $ | 153 |
Liabilities |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments Accrued liabilities |  | $ | 197 |  |  | $ | 23 |
Derivatives not designated as hedging instruments Accrued liabilities |  |  | 156 |  |  |  | 85 |
Total liabilities |  | $ | 353 |  |  | $ | 108 |
The amounts of losses related to the Company’s derivative contracts designated as hedging instruments for the year ended December 31, 2012 and 2011 are (in thousands):
|  | Pretax Loss Recognized in Other Comprehensive Income on Effective Portion of Derivative |  |  | Pretax Loss Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Loss |  |  | Ineffective Portion of Loss on Derivative and Amount Excluded from Effectiveness Testing |
Derivatives in Cash Flow Hedging Relationships |  | Amount |  |  | Location |  |  | Amount |  |  | Location |  |  | Amount |
2012 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | (234 | ) |  |  | Net sales |  |  | $ | (40 | ) |  |  | Net sales |  |  | $ | (124 | )
2011 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | (172 | ) |  |  | Net sales |  |  | $ | (501 | ) |  |  | Net sales |  |  | $ | (69 | )
2010 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | (157 | ) |  |  | Net sales |  |  | $ | (31 | ) |  |  | Net sales |  |  | $ | (46 | )
The following table reconciles the beginning and ending balances of the Company’s accumulated other comprehensive income (loss) related to gains or losses on derivative contracts, as well as amounts reclassified to earnings for the years ended December 31, 2012 and 2011 (in thousands):
|  | 2012 |  |  | 2011 |
Beginning balance |  | $ | 14 |  |  | $ | (197 | )
Net unrealized loss from cash flow hedging instruments arising during the period, net of tax |  |  | (120 | ) |  |  | (107 | )
Reclassifications into earnings, net of tax |  |  | 21 |  |  |  | 318 |
Ending balance |  | $ | (85 | ) |  | $ | 14 |
For the years ended December 31, 2012, 2011 and 2010, gains (losses) of $(0.4) million, $0.1 million and ($0.6) million, respectively, from derivative contracts not designated as hedging instruments were recognized in net sales. At December 31, 2012, there is $0.1 million of unrealized pretax loss on outstanding derivatives accumulated in other comprehensive loss, substantially all of which is expected to be reclassified to net sales within the next 12 months as a result of underlying hedged transactions also being recorded in net sales.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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