Derivative Financial Instruments

9 Months Ended

Jun. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

3.   Derivative Financial Instruments

At June 30, 2017 and September 30, 2016, the Company’s Canadian subsidiary had $24.9 million of Canadian dollar denominated intercompany accounts payable owed to one of the Company’s U.S. subsidiaries.  In order to mitigate its exposure to movements in foreign currency rates between the U.S. dollar and Canadian dollar, the Company routinely enters into foreign currency forward contracts to hedge a portion of its exposure to changes in the value of the Canadian dollar.  Approximately $0.7 million of these Canadian dollar denominated intercompany accounts payable are considered by management to be of a short-term nature whereby the appreciation or devaluation of the Canadian dollar against the U.S. dollar will result in a gain or loss, respectively, to the consolidated statement of operations.  The Company considers the remaining $24.2 million Canadian dollar denominated intercompany accounts payable to be of a long-term nature whereby settlement is not planned or anticipated in the foreseeable future; therefore, any resulting foreign exchange gains and losses are reported in the consolidated balance sheets as a component of other comprehensive income in accordance with ASC 830 “Foreign Currency Matters”.  On June 30, 2017, the Company entered into a $0.7 million Canadian dollar hedge contract with a United States bank to hedge its short-term Canadian dollar foreign exchange rate exposure.  An additional $4.3 million Canadian dollar hedge contract was entered into in July 2017.  These contracts, which expire September 30, 2017, reduce the impact on cash flows from movements in the Canadian dollar/U.S. dollar currency exchange rate, but have not been designated as a hedge for accounting purposes.

The following table summarizes the gross fair value of all derivative instruments, which are not designated as hedging instruments and their location in the consolidated balance sheets (in thousands):

Derivative Instrument	Location	June 30, 2017		September 30, 2016
Foreign Currency Forward Contracts	Prepaid Expenses and Other Current Assets	$	—	$	5

The following table summarizes the Company’s gains on derivative instruments in the consolidated statements of operations for the three and nine month periods ended June 30, 2017 and 2016 (in thousands):

		Three Months Ended						Nine Months Ended
Derivative Instrument	Location	June 30, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Foreign Currency Forward Contracts	Other Income (Expense)	$	(48	)	$	(14	)	$	(20	)	$	14

Amounts in the above table include realized and unrealized derivative gains and losses.