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Derivatives
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

Note 15 – Derivatives

 

The Company’s operations and expenditures in its normal course of business are subject to opportunities and risks related to foreign currency and commodity price fluctuations. From time to time, the Company utilizes foreign currency forward contracts to hedge Mexican Peso denominated expenses against exchange rate volatility, and commodity swap contracts to hedge anticipated and probable commodity price fluctuations.

Since 2023, the Company has entered into foreign currency forward contracts with terms between one and 12 months, which require the Company to exchange currencies at agreed-upon rates at each settlement date. In May 2025, the Company entered into a commodity swap contract with a term of three months. The counterparties to both types of contracts consist of a limited number of

domestic and international financial institutions. The Company classifies these contract types as cash flow hedges in accordance with ASC 815, Derivatives and Hedging.

 

The Company does not have any non-designated derivatives. The Company assesses the assumed effectiveness of the contracts at each reporting period. The derivative instruments are recorded on the balance sheets at fair value. The Company records unrealized gains or losses related to changes in the fair value of the derivative instruments in other comprehensive income as long as the contracts are assumed to be effective. Amounts accumulated in other comprehensive income are reclassified to the condensed consolidated statements of operations on the same line as the items being hedged when the hedged item impacts earnings or upon determination that the contract is no longer assumed to be effective.
 

The notional amounts of outstanding derivative instruments are as follows:

 

 

 

September 30,

 

 

December 31,

 

Notional Amount

 

2025

 

 

2024

 

Derivative instruments designated as hedges:

 

 

 

 

 

 

Foreign currency derivatives

 

$

7,548

 

 

$

8,780

 

 

The fair value of outstanding derivative instruments designated as hedges are as follows:

 

 

 

September 30,

 

 

December 31,

 

Fair Value

 

2025

 

 

2024

 

Prepaid expenses and current assets:

 

 

 

 

 

 

Foreign currency derivatives

 

$

1,080

 

 

$

-

 

Other current liabilities:

 

 

 

 

 

 

Foreign currency derivatives

 

$

-

 

 

$

1,396

 

 

The pre-tax realized (gains) losses on commodity swap and foreign currency derivatives are recognized in the condensed consolidated statements of operations as follows:

 

 

 

 

 

Amount of (Gain)/Loss Recognized

 

 

Amount of Gain Recognized

 

 

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

Location of Realized (Gain)/Loss Recognized in the Condensed Consolidated Statements of Operations

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Derivative instruments designated as cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity swap derivatives

 

Cost of sales

 

$

(32

)

 

$

-

 

 

$

(32

)

 

$

-

 

Foreign currency derivatives

 

Cost of sales

 

$

(960

)

 

$

72

 

 

$

(473

)

 

$

(449

)