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FAIR VALUE MEASUREMENTS
 12 Months Ended
Jun. 29, 2013
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS
The Company has adopted ASC 820, Fair Value Measurements, which defines fair value, establishes a framework for assets and liabilities being measured and reported at fair value and expands disclosures about fair value measurements. There are three levels of fair value hierarchy inputs used to value assets and liabilities which include: Level 1 – inputs are quoted market prices for identical assets or liabilities; Level 2 – inputs other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 – inputs are unobservable inputs for the asset or liability. There have been no changes in the fair value methodologies used at June 29, 2013 and June 30, 2012.
The following table summarizes the Company’s financial assets and liabilities (only those required to be measured at fair value on a recurring basis) at fair value as of June 29, 2013 and June 30, 2012 (in thousands):
 
 
June 29, 2013
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
—

 
$
2,429

 
$
—

 
$
2,429

Financial Liabilities:
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
—

 
$
(434
)
 
$
—

 
$
(434
)
 
 
 
 
 
 
 
 
 
 
 
June 30, 2012
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Fair Value
Financial Assets:
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
—

 
$
858

 
$
—

 
$
858

Financial Liabilities:
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
$
—

 
$
(1,851
)
 
$
—

 
$
(1,851
)

The Company currently has forward contracts to hedge known future cash outflows for expenses denominated in the Mexican peso. These contracts are measured on a recurring basis based on the foreign currency spot rates and forward rates quoted by banks or foreign currency dealers. These contracts are marked to market using level 2 input criteria every period with the unrealized gain or loss, net of tax, reported as a component of shareholders’ equity in accumulated other comprehensive income, as they qualify for hedge accounting.
The carrying values of cash and cash equivalents, accounts receivable and current liabilities reflected on the balance sheets at June 29, 2013 and June 30, 2012, reasonably approximate their fair value. The Company’s long-term debt primarily consists of a revolving line of credit. Borrowings under this revolving line of credit bear interest at the higher of Wells Fargo Bank prime rate, daily one month London Interbank Offered Rate (LIBOR) plus 1.5% to 2.5%, or the Federal Funds rate plus 1.5%. Each of these rates is a variable floating rate dependent upon current market conditions and the Company’s current credit risk. As a result of the determinable market rate for our revolving credit debt it is classified within Level 2 of the fair value hierarchy. The Company did not have an outstanding balance on the line of credit as of June 29, 2013. The discounted cash flow of the revolving line of credit was estimated to be $15.0 million as of June 30, 2012, which carrying value approximates the fair value.