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DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended
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Jan. 01, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | Derivative Financial Instruments As of January 1, 2022, the Company had outstanding foreign currency forward contracts with a total notional amount of $13.9 million. The maturity dates for these contracts extend through June 2022. For the three months ended January 1, 2022, the Company did not enter into any foreign currency forward contracts and settled $5.1 million of contracts. During the same period of the previous year, the Company did not enter into any foreign currency forward contracts and settled $6.3 million of contracts. For the six months ended January 1, 2022, the Company entered into $13.9 million of foreign currency forward contracts and settled $10.6 million of such contracts. During the same period of the previous year, the Company did not enter into any foreign currency forward contracts and settled $13.0 million of such contracts. As of January 1, 2022, 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
April 2, 2022 |  | $ | 149,893 |  |  | $ | 7,224 |  |  | $ | 35 |
July 2, 2022 |  | $ | 141,493 |  |  | $ | 6,726 |  |  | $ | 7 |
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 contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America. On the 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 contract was terminated on August 14, 2020 when the Company entered into a loan and security agreement with Bank of America. On the 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 January 1, 2022 and July 3, 2021 (in thousands):
|  |  | January 1, 2022 |  | July 3, 2021
Derivatives Designated as Hedging Instruments | Balance Sheet Location |  | Fair Value |  | Fair Value
Foreign currency forward contracts | Other current assets |  | $ | 43 |  |  | $ | 3,614 |
Foreign currency forward contracts | Other current liabilities |  | $ | (1) |  |  | $ | — |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended January 1, 2022 and December 26, 2020, respectively (in thousands):
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of October 2, 2021 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of January 1, 2022
Forward contracts | Cost of sales |  | $ | 1,115 |  |  | $ | 338 |  |  | $ | (1,498) |  |  | $ | (45) |
Interest rate swap | Interest expense |  | (574) |  |  | — |  |  | 76 |  |  | (498) |
Total |  |  | $ | 541 |  |  | $ | 338 |  |  | $ | (1,422) |  |  | $ | (543) |
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of September 26, 2020 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of December 26, 2020
Forward contracts | Cost of sales |  | $ | 643 |  |  | $ | 2,958 |  |  | $ | (108) |  |  | $ | 3,493 |
Interest rate swap | Interest expense |  | (875) |  |  | — |  |  | 76 |  |  | (799) |
Total |  |  | $ | (232) |  |  | $ | 2,958 |  |  | $ | (32) |  |  | $ | 2,694 |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended January 1, 2022 and December 26, 2020, respectively (in thousands):
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of July 3, 2021 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of January 1, 2022
Forward contracts | Cost of sales |  | $ | 2,721 |  |  | $ | 562 |  |  | $ | (3,328) |  |  | $ | (45) |
Interest rate swap | Interest expense |  | (649) |  |  | — |  |  | 151 |  |  | (498) |
Total |  |  | $ | 2,072 |  |  | $ | 562 |  |  | $ | (3,177) |  |  | $ | (543) |
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 December 26, 2020
Forward contracts | Cost of sales |  | $ | (759) |  |  | $ | 4,001 |  |  | $ | 251 |  |  | $ | 3,493 |
Interest rate swap | Interest expense |  | (741) |  |  | (223) |  |  | 165 |  |  | (799) |
Total |  |  | $ | (1,500) |  |  | $ | 3,778 |  |  | $ | 416 |  |  | $ | 2,694 |
As of January 1, 2022, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $33,000. As of January 1, 2022, 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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