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Derivative Instruments and Hedging Activities (Notes)
 9 Months Ended
Mar. 31, 2013
Derivative Instruments and Hedging Activities [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
Derivative Instruments and Hedging Activities

The Company operates internationally and thus is exposed to potential adverse changes in foreign currency exchange rates. In the third quarter of fiscal 2013, the Company entered into a foreign currency forward contract (a derivative instrument) as a means of reducing its exposure to foreign currency rate changes on accounts payable denominated in a foreign currency. The primary purpose of the Company's foreign currency hedging activities is to protect against the volatility of earnings associated with foreign currency transactions. The Company's strategy is to enter into foreign currency forward contracts so that losses or gains resulting from its foreign currency exposures are offset by gains or losses on the forward currency forward contracts in order to mitigate the risk and volatility associated with its foreign currency transactions. Such derivative instruments contain credit risk to the extent that the counterparty fails to perform under the contract. The Company seeks to mitigate such risks by limiting its counterparties to major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored. Management does not expect material losses as a result of nonperformance by counterparties.

Derivative instruments are recognized as either assets or liabilities and are measured at fair value. The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the resulting designation. The Company did not designate its foreign currency forward contract as a hedge for accounting purposes, and accordingly, the Company adjusted the contract to fair value by recognizing a gain on the derivative instrument in current earnings within "Other non-operating income (expense), net".
 
The Company continually monitors its exposure to fluctuations in foreign currency exchange rates. The Company may enter into additional foreign currency forward contracts in the future to mitigate its changing exposure to foreign currency exchange rate fluctuations, principally related to payables and receivables generated from sales and purchases denominated in non-functional currencies. The Company's intent is that foreign currency forward contracts will have terms corresponding to the duration and will mature upon settlement of the underlying asset or liability. The Company does not hold or issue financial instruments for speculative or trading purposes.

There were no foreign currency forward contracts outstanding as of March 31, 2013 or June 24, 2012.

The weighted average total notional amount of foreign currency forward contracts outstanding during the three months ended March 31, 2013 was $102 thousand, purchased in U.S. dollar equivalents. The weighted average total notional amount of foreign currency forward contracts outstanding during the nine months ended March 31, 2013 was $33 thousand, purchased in U.S. dollar equivalents.

The table below provides a summary of the effect of the derivative instrument on the unaudited condensed consolidated statements of income (in thousands):
Derivatives Not Designated as Hedging Instruments
 
Location of Gain (Loss) Recognized in Net Income
 
Amount of Gain (Loss) Recognized in Net Income
 
 
 
 
Three months ended
 
Nine Months Ended
 
 
 
 
March 31, 2013
 
March 25, 2012
 
March 31, 2013
 
March 25, 2012
Foreign currency forward contract
 
Other non-operating income (expense), net
 
$
8

 
$
—

 
$
8

 
$
—



The above gain on the derivative instrument includes the cost of entering into the contract (i.e. forward points), and was generally offset by a corresponding foreign currency loss on the underlying hedged transaction (i.e. accounts payable). The net gain on both the derivative instrument and the corresponding hedged transaction are reflected in "Other non-operating income (expense), net" in the accompanying unaudited consolidated statements of income.