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Derivative Instruments and Hedging Activities
 12 Months Ended
Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities
13.
Derivative Instruments and Hedging Activities
Interest Rate Risk Management
Concurrent with the Company’s July 13, 2017 borrowings under its new credit facility, the Company entered into a 44–month interest-rate swap to convert the debt’s variable interest rate to a fixed rate of interest. Under the swap contracts, which mature on April 1, 2021, the Company pays interest at a fixed rate of 1.99% and receives interest at a variable rate equal to the daily U.S. LIBOR on an initial notional amount of $15.0 million. Notional amounts were $8.1 million and $10.3 million at December 31, 2020 and 2019, respectively. These swap contracts have been designated as cash flow hedging instruments and qualified as effective hedges at inception under ASC Topic 815, “Derivatives and Hedging”. These contracts are recognized on the balance sheet at fair value. The effective portion of the changes in fair value on these instruments is recorded in other comprehensive income (loss) and is reclassified into the Consolidated Statements of Operations as interest expense in the same period in which the underlying hedge transaction affects earnings. Changes in the fair value of interest-rate swap contracts deemed ineffective are recognized in the Consolidated Statements of Operations as interest expense. Prior to July 13, 2017, the Company had outstanding interest-rate swap contracts related to term loan borrowings under the Company’s previous credit agreement. The fair value of the interest-rate swap contracts at December 31, 2020 and 2019 was a liability of $35,000 and $43,000, respectively, and is reflected in the Consolidated Balance Sheets as other current liabilities.
The effect of derivative instruments on the Consolidated Statements of Operations and Comprehensive Income (“OCI”) for the year ended December 31, 2020 (in thousands):
 
Derivatives in
ASC Topic 815
Cash Flow
Hedging
Relationships
  
Amount of
Gain / (Loss)
recognized in OCI
on Derivatives
  
Location of
Gain / (Loss)
reclassified from
Accumulated OCI
to Income
  
Amount of
Gain / (Loss)
reclassified from
Accumulated OCI
to Income
  
Location of
Gain / (Loss)
reclassified in
Income on
Derivatives
  
Amount of
Gain /(Loss)
recognized in
Income on
Derivatives
   (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded
from effectiveness testing)
Interest-Rate  
          
Swap  
          
Contracts  
  $8 Interest Expense $121 Interest Expense  $—  
 
The effect of derivative instruments on the Consolidated Statements of Operations and Comprehensive Income (“OCI”) for the year ended December 31, 2019 (in thousands):
 
Derivatives in
ASC Topic 815
Cash Flow
Hedging
Relationships
  
Amount of
Gain / (Loss)
recognized in OCI
on Derivatives
  
Location of
Gain / (Loss)
reclassified from
Accumulated OCI
to Income
  
Amount of
Gain / (Loss)
reclassified from
Accumulated OCI
to Income
  
Location of
Gain / (Loss)
reclassified in
Income on
Derivatives
  
Amount of
Gain /(Loss)
recognized in
Income on
Derivatives
   (Effective Portion) (Effective Portion) (Effective Portion) (Ineffective Portion/Amounts excluded
from effectiveness testing)
Interest-Rate  
          
Swap  
          
Contracts  
  $(149)Interest Expense $32 Interest Expense  $—  
Information on the location and amounts of derivative fair va
l
ues in the Consolidated Balance Sheets (in thousands):
 
   
December 31, 2020
   
December 31, 2019
 
Derivative Instruments
  
Balance Sheet Location
   
Fair Value
   
Balance Sheet Location
   
Fair Value
 
Interest-Rate Swap Contracts
   Other Current Liabilities   $35    Other Current Liabilities   $43 
The estimated amount of pretax (loss) as of December 31, 2020 that is expected to be reclassified from other comprehensive income into earnings, within the next 12 months is approximately ($35,000).