XML 35 R13.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Derivative Instruments
 12 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Note 5. Derivative Instruments
Derivative Instruments Held
Coffee-Related Derivative Instruments
The Company is exposed to commodity price risk associated with its price to be fixed green coffee purchase contracts, which are described further in Note 2. The Company utilizes forward and option contracts to manage exposure to the variability in expected future cash flows from forecasted purchases of green coffee attributable to commodity price risk. Certain of these coffee-related derivative instruments utilized for risk management purposes have been designated as cash flow hedges, while other coffee-related derivative instruments have not been designated as cash flow hedges or do not qualify for hedge accounting despite hedging the Company's future cash flows on an economic basis.
The following table summarizes the notional volumes for the coffee-related derivative instruments held by the Company at June 30, 2024 and 2023:
As of June 30,
(In thousands)20242023
Derivative instruments designated as cash flow hedges:
Long coffee pounds— 1,538 
Derivative instruments not designated as cash flow hedges:
Long coffee pounds71 6,713 
Less: Short coffee pounds— (4,388)
Total71 3,863 
Coffee-related derivative instruments not designated as cash flow hedges outstanding as of June 30, 2024 will expire within 1.5 years. At June 30, 2024 and 2023 approximately none and 40%, respectively, of the Company's outstanding coffee-related derivative instruments were designated as cash flow hedges.
Interest Rate Swap Derivative Instruments
Pursuant to an International Swap Dealers Association, Inc. Master Agreement (“ISDA”) effective March 20, 2019, the Company on March 27, 2019, entered into a swap transaction utilizing a notional amount of $80.0 million, with an effective date of April 11, 2019 and a maturity date of October 11, 2023 (the “Original Rate Swap”). The Original Rate Swap was intended to manage the Company’s interest rate risk on its floating-rate indebtedness under the Company’s revolving credit facility.
The Company had designated the Original Rate Swap derivative instrument as a cash flow hedge; however, during the quarter ended September 30, 2020, the Company de-designated the Original Rate Swap derivative instruments. On May 16, 2023, the Company settled the Original Rate Swap. The net settlement of the Original Rate Swap was a $13 thousand loss.
Effect of Derivative Instruments on the Financial Statements
Balance Sheets
Fair values of derivative instruments on the Company's consolidated balance sheets:
Derivative Instruments
Designated as Cash Flow Hedges		Derivative Instruments Not Designated as Accounting Hedges
As of June 30,As of June 30,
(In thousands)2024202320242023
Financial Statement Location:
Short-term derivative assets:
Coffee-related derivative instruments(1)
$— $4 $11 $64 
Long-term derivative assets:
Coffee-related derivative instruments(2)
— — 33 — 
Short-term derivative liabilities:
Coffee-related derivative instruments(3)
— 158 730 2,478 
Long-term derivative liabilities:
Coffee-related derivative instruments(4)
— — 1,505 — 
________________
(1) Included in “Short-term derivative assets” on the Company's consolidated balance sheets.
(2) Included in “Other assets” on the Company's consolidated balance sheets.
(3) Included in “Short-term derivative liability” on the Company's consolidated balance sheets.
(4) Included in “Other Long-term liabilities” on the Company's consolidated balance sheets.
Statements of Operations
The following table presents pretax net gains and losses for the Company's derivative instruments designated as cash flow hedges, as recognized in “AOCI,” “Cost of goods sold” and “Interest expense”.
Year Ended June 30,Financial Statement Classification
(In thousands)202420232022
Net gains (losses) recognized from AOCI to earnings - Interest rate swap— 396 (7)Interest Expense
Net losses reclassified from AOCI to earnings for partial unwind of interest swap - Interest rate swap— (1,305)(1,201)Interest Expense
Net (gains) losses recognized in AOCI - Coffee-related(406)2,384 (12,172)AOCI
Net (loss) gains recognized in earnings - Coffee-related(615)1,392 15,865 Costs of goods sold
For the fiscal years ended June 30, 2024, 2023 and 2022, there were no gains or losses recognized in earnings as a result of excluding amounts from the assessment of hedge effectiveness.
Net (gains) losses on derivative instruments in the Company's consolidated statements of cash flows also includes net (gains) losses on coffee-related derivative instruments designated as cash flow hedges reclassified to cost of goods sold from AOCI in the fiscal years ended June 30, 2024, 2023 and 2022. Gains and losses on derivative instruments not designated as accounting hedges are included in “Other, net” in the Company's consolidated statements of operations and in “Net (gains) losses on derivative instruments and investments” in the Company's consolidated statements of cash flows.
Net gains and losses recorded in “Other, net” are as follows:
 Year Ended June 30,
(In thousands)202420232022
Net gains (losses) on coffee-related derivative instruments (1)$503 $(6,978)$4,498 
Non-operating pension and other postretirement benefit plans credits3,648 2,910 3,598 
Other (losses) gains, net2,073 (174)44 
             Other, net
$6,224 $(4,242)$8,140 
___________
(1) Excludes net losses and net gains on coffee-related derivative instruments designated as cash flow hedges recorded in cost of goods sold in the fiscal years ended June 30, 2024, 2023 and 2022.
Statement of Comprehensive Income (Loss)
The following table provides the balances and changes in accumulated other comprehensive income (loss) related to derivative instruments for the indicated periods:
June 30,
(In thousands)202420232022
Accumulated other comprehensive loss (income) beginning balance$1,175 $(1,692)$(4,177)
Net gains (losses) recognized from AOCI to earnings - Interest rate swap— 396 (7)
Net losses reclassified from AOCI to earnings for partial unwind of interest swap - Interest rate swap— (1,305)(1,201)
Net (gains) losses recognized in AOCI - Coffee-related(406)2,384 (12,172)
Net (loss) gains recognized in earnings - Coffee-related(615)1,392 15,865 
Accumulated other comprehensive loss (income) ending balance$154 $1,175 $(1,692)
Offsetting of Derivative Assets and Liabilities
The Company has agreements in place that allow for the financial right of offset for derivative assets and liabilities at settlement or in the event of default under the agreements. Additionally, under certain coffee derivative agreements, the Company maintains accounts with its counterparties to facilitate financial derivative transactions in support of its risk management activities.
The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions, as well as cash collateral on deposit with its counterparties as of the reporting dates indicated:
(In thousands)Gross Amount Reported on Balance SheetNetting AdjustmentsCash Collateral PostedNet Exposure
As of June 30, 2024Derivative Assets$44 $(44)$— $— 
Derivative Liabilities2,235 (44)— 2,191 
As of June 30, 2023Derivative Assets68 (68)— — 
Derivative Liabilities2,636 (68)— 2,568 
Cash Flow Hedges
Changes in the fair value of the Company’s coffee-related derivative instruments designated as cash flow hedges are deferred in AOCI and subsequently reclassified into cost of goods sold in the same period or periods in which the hedged forecasted purchases affect earnings, or when it is probable that the hedged forecasted transaction will not occur by the end of the originally specified time period. Based on recorded values at June 30, 2024, $0.3 million of net gains on coffee-related derivative instruments designated as cash flow hedge are expected to be reclassified into cost of goods sold within the next twelve months. These recorded values are based on market prices of the commodities as of June 30, 2024.