XML 34 R23.htm IDEA: XBRL DOCUMENT
v3.19.1

Fair Value of Financial Instruments | 3 Months Ended
--- | ---
Mar. 31, 2019
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in a transaction between market participants as of the measurement date. Fair value is measured using the fair value hierarchy and related valuation methodologies as defined in the authoritative literature. This guidance provides a fair value framework that requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:
Level 1 - | Quoted prices in active markets for identical assets and liabilities.
Level 2 - | Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets.
Level 3 - | Significant unobservable inputs reflecting management's own assumptions about the inputs used in pricing the asset or liability.
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt, interest rate swaps and foreign currency derivatives. Cash and cash equivalents, accounts receivable and accounts payable carrying values as of March 31, 2019 and December 31, 2018 approximate fair value due to the short-term maturities of these financial instruments. The carrying amounts of long-term debt and the revolving line of credit approximate fair value as of March 31, 2019 and December 31, 2018 due to the short term nature of the underlying variable rate LIBOR agreements. The Company had Level 2 fair value measurements at March 31, 2019 and December 31, 2018 relating to the Company’s interest rate swaps and foreign currency derivatives. Derivative and hedging activities Foreign currency derivatives The Company conducted business in foreign countries and paid certain expenses in foreign currencies; therefore, the Company was exposed to foreign currency exchange risk between the U.S. Dollar and foreign currencies, which could impact the Company’s operating income and cash flows. To mitigate risk associated with foreign currency exchange, the Company entered into forward contracts to exchange a fixed amount of U.S. Dollars for a fixed amount of foreign currency, which will be used to fund future foreign currency cash flows. At inception, all forward contracts are formally documented as cash flow hedges and are measured at fair value each reporting period. Derivatives are formally assessed both at inception and at least quarterly thereafter, to ensure that derivatives used in hedging transactions are highly effective in offsetting changes in cash flows of the hedged item. If it is determined that a derivative ceases to be a highly effective hedge, or if the anticipated transaction is no longer probable of occurring, hedge accounting is discontinued, and any future mark-to-market adjustments are recognized in earnings. The effective portion of gain or loss is reported in other comprehensive income and the ineffective portion is reported in earnings. The impacts of these contracts were largely offset by gains and losses resulting from the impact of changes in exchange rates on transactions denominated in the foreign currency. As of March 31, 2019, the Company had no ineffective portion related to the cash flow hedges. Interest Rate Swaps The Company entered into interest rate swap contracts to fix the interest rate on an initial aggregate amount of $35,000,000 thereby reducing exposure to interest rate changes. The interest rate swap pays a fixed rate of 4.49% to the counterparty and receives 30 day LIBOR for both cash flow hedges. At inception, all interest rate swaps were formally documented as cash flow hedges and are measured at fair value each reporting period. See Note 12, "Debt", for additional information. Financial statements impacts The following tables detail amounts related to our derivatives designated as hedging instruments:
| Fair Value of Derivative Instruments
| March 31, 2019
| Asset Derivatives |  | Liability Derivatives
| Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Foreign exchange contracts | Prepaid expense other current assets |  | $ | — |  |  | Accrued other liabilities |  | $ | 226,000 |
Notional contract values |  |  | $ | — |  |  |  |  | $ | 27,385,000 |
Interest rate swaps | Prepaid expense other current assets |  | $ | — |  |  | Accrued other liabilities |  | $ | 318,000 |
Notional swap values |  |  | $ | — |  |  |  |  | $ | 31,718,750 |
| December 31, 2018
| Asset Derivatives |  | Liability Derivatives
| Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Foreign exchange contracts | Prepaid expense other current assets |  | $ | — |  |  | Accrued other liabilities |  | $ | 750,000 |
Notional contract values |  |  | $ | — |  |  |  |  | $ | 27,588,000 |
Interest rate swaps | Prepaid expense other current assets |  | $ | — |  |  | Accrued other liabilities |  | $ | 65,000 |
Notional swap values |  |  | $ | — |  |  |  |  | $ | 32,375,000 |
The following tables summarize the amount of unrealized / realized gain and loss recognized in Accumulated Other Comprehensive Income (AOCI) for the three months ended March 31, 2019 and 2018:
Derivatives in subtopic 815-20 Cash Flow Hedging Relationship |  | Amount of Unrealized Gain or (Loss) Recognized in Accumulated Other Comprehensive Income on Derivative |  | Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income(A) |  | Amount of Realized Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income
|  | 2019 | 2018 |  |  | 2019 | 2018
Foreign exchange contracts |  | $ | 701,000 |  | $ | 913,000 |  |  | Cost of goods sold |  | $ | 148,000 |  | $ | 146,000 |
|  | Selling, general and administrative expense |  | $ | 31,000 |  | $ | 22,000 |
Interest rate swaps |  | $ | (252,000 | ) | $ | 24,000 |  |  | Interest expense |  | $ | 1,000 |  | $ | — |
(A) The foreign currency derivative activity reclassified from Accumulated Other Comprehensive Income is allocated to cost of goods sold and selling, general and administrative expense based on the percentage of foreign currency spend.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration