11 .	DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES:

For each derivative contract entered into in which the Company seeks to obtain cash flow hedge accounting treatment, the Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge transaction, the nature of the risk being hedged, how the hedging instrument

’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively and a description of the method of measuring ineffectiveness. This process includes linking all derivatives to specific firm commitments or forecasted transactions and designating the derivatives as cash flow hedges. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative contracts that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The effective portion of these hedged items is reflected in Unrealized gain (loss) on cash flow hedges on the Consolidated Statements of Comprehensive Loss. If it is determined that a derivative contract is

not

highly effective, or that it has ceased to be a highly effective hedge, the Company will be required to discontinue hedge accounting with respect to that derivative contract prospectively.

As of

December

31,

2017

and

2016,

the total notional amount of the derivative contracts designated as cash flow hedges was

$2.1

million (

CAD$2.7

million) and

$3.4

million (

CAD$4.5

million), respectively. Derivative assets are included within Prepaid expenses and other and derivative liabilities are included within Accrued liabilities in the Consolidated Balance Sheets. All of the Company’s foreign currency forward contracts are subject to an enforceable master netting arrangement. The Company presents the assets and liabilities associated with its foreign currency forward contracts at their gross fair values in the Consolidated Balance Sheets.

All of the Company

’s Canadian forward contracts have maturities less than

twelve

months as of

December

31,

2017,

except

two

contracts with a combined notional amount of

$2.1

million (

CAD$2.7

million) which have remaining maturities of

months.

As of

December

31,

2017

and

2016,

the total notional amount of the derivative contracts

not

designated as cash flow hedges was

$0.2

million (

CAD$0.2

million) and

$0.9

million (

CAD$1.3

million), respectively.

For the years ended

December

31,

2017,

2016

and

2015,

gains recognized in Net sales from continuing operations from derivative contracts

not

designated as hedging instruments were approximately

$0,

and

$0.4

million, respectively. As of

December

31,

2017,

unrealized pretax losses on outstanding derivatives in Accumulated other comprehensive loss was approximately

$0.

Typically, outstanding derivatives balances in Accumulated other comprehensive loss are expected to be reclassified to Net sales from continuing operations within the next

twelve

months as a result of underlying hedged transactions also being recorded in Net sales from continuing operations. See Note

17,

“Accumulated Other Comprehensive Loss” for additional quantitative information regarding derivative gains and losses.