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DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended
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Sep. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | Derivative Financial Instruments As of September 26, 2020, the Company had outstanding foreign currency forward contracts with a total notional amount of $30.0 million. The maturity dates for these contracts extend through December 2021. For the three months ended September 26, 2020, the Company did not enter into any foreign currency forward contracts and settled $6.7 million of contracts. During the same period of the previous year, the Company did not enter into any foreign currency forward contracts and settled $6.7 million of contracts. As of September 26, 2020, the aggregate notional amount of the Company’s outstanding foreign currency contracts along with their unrealized gains (losses) are expected to mature as summarized below (in thousands):
Quarter Ending |  | Notional Contracts in MXN |  | Notional Contracts in USD |  | Estimated Fair Value
December 26, 2020 |  | $ | 132,773 |  |  | $ | 6,241 |  |  | $ | (333) |
April 3, 2021 |  | $ | 148,253 |  |  | $ | 6,682 |  |  | $ | (161) |
July 3, 2021 |  | $ | 144,725 |  |  | $ | 6,446 |  |  | $ | (134) |
October 2, 2021 |  | $ | 146,373 |  |  | $ | 5,502 |  |  | $ | 805 |
January 1, 2022 |  | $ | 137,973 |  |  | $ | 5,129 |  |  | $ | 754 |
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 with Wells Fargo Bank. 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 Wells Fargo Bank 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. This interest rate swap contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America. At date of termination this interest rate swap was in a liability position of $148,400, which will be amortized to interest expense over the original term of the swap. 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 with Wells Fargo Bank. 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 Wells Fargo Bank 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. This interest rate swap contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America. At date of termination this interest rate swap was in a liability position of $776,500, which will be amortized to interest expense over the original term of the swap. The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of September 26, 2020 and June 27, 2020 (in thousands):
|  |  | September 26, 2020 |  | June 27, 2020
Derivatives Designated as Hedging Instruments | Balance Sheet Location |  | Fair Value |  | Fair Value
Foreign currency forward contracts | Other current assets |  | $ | 771 |  |  | $ | — |
Foreign currency forward contracts | Other long-term assets |  | $ | 788 |  |  | $ | 1,097 |
Foreign currency forward contracts | Other current liabilities |  | $ | (628) |  |  | $ | (1,960) |
Foreign currency forward contracts | Other long-term liabilities |  | $ | — |  |  | $ | (17) |
Interest rate swap | Other current liabilities |  | $ | — |  |  | $ | (347) |
Interest rate swap | Other long-term liabilities |  | $ | — |  |  | $ | (610) |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended September 26, 2020 and September 28, 2019, 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 27, 2020 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of September 26, 2020
Forward contracts | Cost of sales |  | $ | (759) |  |  | $ | 1,043 |  |  | $ | 359 |  |  | $ | 643 |
Interest rate swap | Interest expense |  | (741) |  |  | (223) |  |  | 89 |  |  | (875) |
Total |  |  | $ | (1,500) |  |  | $ | 820 |  |  | $ | 448 |  |  | $ | (232) |
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 September 28, 2019
Forward contracts | Cost of sales |  | $ | 2,424 |  |  | $ | (41) |  |  | $ | (904) |  |  | $ | 1,479 |
Interest rate swap | Interest expense |  | 2 |  |  | — |  |  | (2) |  |  | — |
Total |  |  | $ | 2,426 |  |  | $ | (41) |  |  | $ | (906) |  |  | $ | 1,479 |
As of September 26, 2020, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $0.1 million. As of September 26, 2020, 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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