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Note 7 - Derivative Instruments and Hedging Activities
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
7.
Derivative Instruments and Hedging Activities:
 
Foreign currency forward contracts
 
Since
October 2012,
the Company has employed a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. As part of its risk management strategy, the Company uses derivative instruments to hedge a portion of the foreign exchange risk associated with these costs. The Company does
not
use these forward contracts for trading or speculative purposes. These forward contracts typically mature between
one
and
eighteen
months.
 
The Company has designated certain of these transactions as cash flow hedges of forecasted transactions under ASC Topic 
815.
 For certain contracts, as the critical terms of the hedging instrument, and of the entire hedged forecasted transaction, are the same, in accordance with ASC Topic
815,
the Company has been able to conclude that changes in fair value and cash flows attributable to the risk of being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, unrealized gains or losses on the effective portion of these contracts have been included within other comprehensive income. The fair value of the contracts, as of
December 
31,
 
2019
and
2018,
is recorded as derivative instrument assets or liabilities. For certain contracts where the hedged transactions are
no
longer probable to occur, the loss on the associated forward contract is recognized in earnings.
  
As of
December 31,
2019
, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was
$30.5
 million, of which
$26.1
 million met the requirements of ASC Topic
815
and were designated as hedges.
 
As of
December 31,
2018
the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars wa
s
$40.5
 million, of which
$36.5
 m
illion met the requirements of ASC Topic
815
and were designated as hedges.
 
As of
December 31,
2019
, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars: 
 
Maturity date (Dollar amounts in thousands of U.S. dollars)
  
Notional amount of U.S. dollars
    
Weighted average exchange rate of U.S. dollars
    
Fair value
  
                         
January - March 2020
    
10,729
      
1.3296
      
259
  
April - June 2020
    
9,654
      
1.3296
      
232
  
July - September 2020
    
5,300
      
1.3296
      
127
  
October - December 2020
    
4,803
      
1.3296
      
113
  
    $
30,486
      
1.3296
     $
731
  
 
Fair value of derivative instruments and effect of derivative instruments on financial performance
 
The effect of these derivative instruments on our consolidated financial statements as of, and for the year ended
December 
31,
 
2019
and
2018
, were as follows (amounts presented do
not
include any income tax effects).
  
Fair value of derivative instruments in the consolidated balance sheets (see
“Note
6
– Fair Value Measurement”
)
 
Derivatives (Dollar amounts in thousands of U.S. dollars)
Balance Sheet Location
  
As of December 31, 2019 Fair Value Asset
    
As of December 31, 2018 Fair Value Liability
  
Foreign Currency forward contracts designated as cash flow hedges (net)
Derivative instruments
   $
626
     $
(1,069
 )
Foreign Currency forward contracts not designated as cash flow hedges (net)
Derivative instruments
    
105
      
(207
 )
Total foreign currency forward contracts (net)
Derivative instruments
   $
731
     $
(1,276
 )
 
Movement in AOCI balance for the year ended
December 31,
2019
(Dollar amounts in thousands of U.S. dollars)
 
   
Gains and losses on cash flow hedges
    
Tax impact
    
Total AOCI
  
Opening AOCI balance - December 31, 2018
   $
(1,069
 )   $
259
     $
(810
 )
Other comprehensive income (loss) before reclassifications
    
1,454
      
(353
 )    
1,101
  
Amount reclassified from AOCI
    
240
      
(58
 )    
182
  
Other comprehensive income (loss) for the year ended December 31, 2019
    
1,694
      
(411
 )    
1,283
  
                         
Ending AOCI Balance - December 31, 2019
   $
625
     $
(152
 )   $
473
  
 
 
Movement in AOCI balance for the year ended
December 31,
2018
(Dollar amounts in thousands of U.S. dollars)
 
 
   
Gains and losses on cash flow hedges
    
Tax impact
    
Total AOCI
  
Opening AOCI balance - December 31, 2017   $
-
     $
-
     $
-
  
Other comprehensive income (loss) before reclassifications
    
(1,350
 )    
328
      
(1,022
 )
Amount reclassified from AOCI
    
281
      
(69
 )    
212
  
Other comprehensive income (loss) for the year ended December 31, 2018
    
(1,069
 )    
259
      
(810
 )
                         
Ending AOCI Balance - December 31, 2018   $
(1,069
 )   $
259
     $
(810
 )
 
 
Movement in AOCI balance for the year ended
December 31,
2017
 
(Dollar amounts in thousands of U.S. dollars)
 
   
Gains and losses on cash flow hedges
    
Tax impact
    
Total AOCI
  
Opening AOCI balance - December 31, 2016
   $
156
     $
(56
 )   $
100
  
Other comprehensive income (loss) before reclassifications
    
863
      
(313
 )    
550
  
Amount reclassified from AOCI
    
(1,019
 )    
369
      
(650
 )
Other comprehensive income (loss) for the year ended December 31, 2017
    
(156
 )    
56
      
(100
 )
                         
Ending AOCI Balance - December 31, 2017
   $
-
     $
-
     $
-
  
   
Effects of derivative instruments on income and other comprehensive income (OCI) (Dollar amounts in thousands of U.S. dollars) 
 
Derivatives in Cash Flow Hedging Relationship
  
Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative
  
Location of Gain or (Loss) Reclassified from AOCI into Income
  
Amount of Gain or (Loss) Reclassified from AOCI into Income
  
     
 
  
Operating expenses
   $
(197
 )
Foreign currency forward contracts for the year ended December 31, 2019
   $
1,283
  
Cost of revenues
   $
(43
 )
                   
     
 
  
Operating expenses
   $
(245
 )
Foreign currency forward contracts for the year ended December 31, 2018
   $
(810
 )
Cost of revenues
   $
(36
 )
                   
     
 
  
Operating expenses
   $
879
  
Foreign currency forward contracts for the year ended December 31, 2017
   $
(100
 )
Cost of revenues
   $
140
  
 
 
We have entered into certain forward exchange contracts that do
not
comply with the requirements of hedge accounting to meet a portion of our future Canadian dollar requirements through
December
2019
. During Fiscal
2019
, the Company recorded a ne
t gain of
$0.3
 m
illion on the change in fair value of outstanding contracts as well as
a 
$0.1
m
illion realized loss on matured contracts. In Fiscal
2018
the Company recorded a ne
t loss
of
$0.2
 million for the change in fair value of outstanding contracts and
a loss of less than
$0.1
million of settlements of contracts
not
designated as hedges. For the year ended
December 31, 2017,
the Company recorded a gain of
$0.1
 million on matured contracts, with
no
contracts outstanding at
December 31, 2017.