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Derivative Financial Instruments | 3 Months Ended
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Sep. 28, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments As of September 28, 2024, the Company had outstanding foreign currency forward contracts with a total notional amount of $22.0 million through the end of the fourth quarter of fiscal year 2025. During the three months ended September 28, 2024, the Company entered into $16.1 million of foreign currency forward contracts and settled $6.6 million of contracts. During the same period of the previous year, the Company did not enter into or settle any foreign currency forward contracts. Changes in the fair value of the forward contracts are recognized as a component of OCI and will be recognized in cost of sales when the hedged item affects earnings. The amount of net losses expected to be reclassified into earnings in the next 12 months is $1.4 million. 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 the Loan Agreement with Bank of America. On the date of termination this interest rate swap was in a liability position of $776,500, which has been amortized to interest expense over the original term of the swap. The following table summarizes the fair value of the derivative instruments in the Consolidated Balance Sheets as of September 28, 2024 and September 30, 2023 (in thousands):
|  |  |  | Fair Value
Derivatives designated as hedging instruments under Subtopic 815-20 |  | Balance Sheet Location |  | September 28, 2024 |  | June 29, 2024
Foreign currency forward contracts |  | Other current liabilities |  | $ | 1,360 |  |  | $ | 277 |
The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Operations for the three months ended September 28, 2024 and September 30, 2023, 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 30, 2024 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of September 28, 2024
Forward contracts | Cost of sales |  | $ | 215 |  |  | $ | 540 |  |  | $ | 298 |  |  | $ | 1,053 |
Total |  |  | $ | 215 |  |  | $ | 540 |  |  | $ | 298 |  |  | $ | 1,053 |
Derivatives Designated as Hedging Instruments | Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) |  | AOCI Balance as of July 1, 2023 |  | Effective Portion Recorded In AOCI |  | Effective Portion Reclassified From AOCI Into Income |  | AOCI Balance as of September 30, 2023
Interest rate swap | Interest expense |  | (97) |  |  | — |  |  | 58 |  |  | (39) |
Total |  |  | $ | (97) |  |  | $ | — |  |  | $ | 58 |  |  | $ | (39) |
As of September 28, 2024, the Company does not have any foreign exchange contracts with credit-risk-related contingent features. The Company is subject to the risk of fluctuating interest rates from our line of credit and foreign currency risk resulting from our China operations. The Company does not currently manage these risk exposures by using derivative instruments.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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