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DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended
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Dec. 28, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | Derivative Financial Instruments As of December 28, 2019, the Company had outstanding foreign currency forward contracts with a total notional amount of $25.8 million. The maturity dates for these contracts extend through December 2020. For the three months ended December 28, 2019, the Company did not enter into any foreign currency forward contracts and settled $7.2 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $6.3 million and settled $6.7 million of such contracts. For the six months ended December 28, 2019, the Company did not enter into any foreign currency forward contracts and settled $13.9 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $6.3 million and settled $12.0 million of such contracts. As of December 28, 2019, the aggregate notional amount of the Company’s outstanding foreign currency contracts along with their unrealized gains are expected to mature as summarized below (in thousands):
Quarter Ending |  | Notional Contracts in MXN |  | Notional Contracts in USD |  | Estimated Fair Value
March 28, 2020 |  | $ | 146,613 |  |  | $ | 6,553 |  |  | $ | 1,177 |
June 27, 2020 |  | $ | 138,213 |  |  | $ | 6,257 |  |  | $ | 929 |
September 26, 2020 |  | $ | 141,173 |  |  | $ | 6,729 |  |  | $ | 516 |
December 26, 2020 |  | $ | 132,773 |  |  | $ | 6,241 |  |  | $ | 488 |
On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of September 30, 2022, related to the borrowings outstanding under the term loan. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.70% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our term loan. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the term loan, the interest rate contract was determined to be effective, and thus qualified as a cash flow hedge. On November 6, 2019, the Company entered into an interest rate swap contract with an effective date of November 6, 2019 and a termination date of November 1, 2023, related to the borrowings outstanding under the line of credit. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.67% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our line of credit. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the line of credit, the interest rate contract was determined to be effective, and thus qualified as a cash flow hedge. The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of December 28, 2019 and June 29, 2019 (in thousands):
|  |  | December 28, 2019 |  | June 29, 2019
Derivatives Designated as Hedging Instruments | Balance Sheet Location |  | Fair Value |  | Fair Value
Foreign currency forward contracts & swaps | Other current assets |  | $ | 3,110 |  |  | $ | 2,912 |
Foreign currency forward contracts & swaps | Other long-term assets |  | $ | — |  |  | $ | 320 |
Interest rate swap | Other current assets |  | $ | 6 |  |  | $ | 2 |
Interest rate swap | Other current liabilities |  | $ | (83 | ) |  | $ | — |
Interest rate swap | Other long-term liabilities |  | $ | (17 | ) |  | $ | — |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 28, 2019 and December 29, 2018, respectively (in thousands):
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of September 28, 2019 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of December 28, 2019
Forward contracts & swaps | Cost of sales |  | $ | 1,479 |  |  | $ | 1,533 |  |  | $ | (683 | ) |  | $ | 2,329 |
Interest rate swap | Interest expense |  | — |  |  | (71 | ) |  | (1 | ) |  | (72 | )
Total |  |  | $ | 1,479 |  |  | $ | 1,462 |  |  | $ | (684 | ) |  | $ | 2,257 |
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of September 29, 2018 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of December 29, 2018
Forward contracts & swaps | Cost of sales |  | $ | 2,061 |  |  | $ | (1,266 | ) |  | $ | 383 |  |  | $ | 1,178 |
Interest rate swap | Interest expense |  | 19 |  |  | (1 | ) |  | (5 | ) |  | 13 |
Total |  |  | $ | 2,080 |  |  | $ | (1,267 | ) |  | $ | 378 |  |  | $ | 1,191 |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 28, 2019 and December 29, 2018, respectively (in thousands):
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of June 29, 2019 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of December 28, 2019
Forward contracts & swaps | Cost of sales |  | $ | 2,424 |  |  | $ | 1,492 |  |  | $ | (1,587 | ) |  | $ | 2,329 |
Interest rate swap | Interest expense |  | 2 |  |  | (71 | ) |  | (3 | ) |  | (72 | )
Total |  |  | $ | 2,426 |  |  | $ | 1,421 |  |  | $ | (1,590 | ) |  | $ | 2,257 |
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of June 30, 2018 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of December 29, 2018
Forward contracts & swaps | Cost of sales |  | $ | (988 | ) |  | $ | 1,249 |  |  | $ | 917 |  |  | $ | 1,178 |
Interest rate swap | Interest expense |  | 19 |  |  | 1 |  |  | (7 | ) |  | 13 |
Total |  |  | $ | (969 | ) |  | $ | 1,250 |  |  | $ | 910 |  |  | $ | 1,191 |
As of December 28, 2019, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $2.3 million. As of December 28, 2019, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.

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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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