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Note O - Derivative Financial Instruments | 6 Months Ended
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Dec. 27, 2019
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] |
O. | Derivative Financial Instruments
From time to time, the Company enters into derivative instruments to manage volatility arising from risks relating to interest rates and foreign exchange. The Company does not purchase, hold or sell derivative financial instruments for trading purposes. The Company’s practice is to terminate derivative transactions if the underlying asset or liability matures or is sold or terminated, or if it determines the underlying forecasted transaction is no longer probable of occurring. The Company reports all derivative instruments on its consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of transactions entered into for hedging purposes. Interest Rate Swap Contracts The Company has one outstanding interest rate swap contract as of December 27, 2019, which it entered into on April 22, 2019. It has been designated as a cash flow hedge in accordance with ASC 815, Derivatives and Hedging. The primary purpose of the Company’s cash flow hedging activities is to manage the potential changes in value associated with interest payments on the Company’s LIBOR-based indebtedness. The Company records gains and losses on interest rate swap contracts qualifying as cash flow hedges in accumulated other comprehensive loss to the extent that these hedges are effective and until the Company recognizes the underlying transactions in net earnings, at which time these gains and losses are recognized in interest expense on its consolidated statements of operations and comprehensive (loss) income. Cash flows from derivative financial instruments are classified as cash flows from financing activities on the consolidated statements of cash flows. These contracts generally have original maturities of greater than 12 months. Net unrealized after-tax losses related to cash flow hedging activities that were included in accumulated other comprehensive loss were $506 and $509 as of December 27, 2019 and June 30, 2019, respectively. The unrealized amounts in accumulated other comprehensive loss will fluctuate based on changes in the fair value of open contracts during each reporting period. The Company estimates that $144 of net unrealized losses related to cash flow hedging activities included in accumulated other comprehensive loss will be reclassified into earnings within the next twelve months. For eign Currency Forward Contracts The Company has no outstanding foreign currency forward exchange contracts at December 27, 2019 or at June 30, 2019. Fair Value of Derivative Instruments The fair value of derivative instruments included in the condensed consolidated balance sheets were as follows:
| Balance Sheet Location |  | December 27, 2019 |  |  | June 30, 2019 |
Derivative designated as hedge: |  |  |  |  |  |  |  |  |
Interest rate swap | Accrued liabilities |  | $ | 144 |  |  | $ | 122 |
Interest rate swap | Other long-term liabilities |  |  | 518 |  |  |  | 544 |
The impact of the Company’s derivative instruments on the consolidated statement of operations and comprehensive (loss) income for the quarter and two quarters ended December 27, 2019 and December 28, 2018, respectively, was as follows:
| Statement of Comprehensive |  | For the Quarter Ended |  |  | For the Two Quarters Ended |
| Income Location |  | December 27, 2019 |  |  | December 28, 2018 |  |  | December 27, 2019 |  |  | December 28, 2018 |
Derivative designated as hedge: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap | Interest expense |  | $ | 31 |  |  | $ | - |  |  | $ | 42 |  |  | $ | - |
Interest rate swap | Unrealized income on cash flow hedge |  |  | 146 |  |  |  | - |  |  |  | 3 |  |  |  | - |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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