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FAIR VALUE MEASUREMENTS
6 Months Ended
Jul. 02, 2016
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

The following tables set forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities accounted for at fair value on a recurring basis.

 
July 2, 2016
 
 
January 2, 2016
 
 
July 4, 2015
(dollars in millions)
Level 1
 
Level 2
 
Level 3
 
 
Level 1
 
Level 2
 
Level 3
 
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
$
10.9

 
$

 
$

 
 
$
8.6

 
$

 
$

 
 
$
7.9

 
$

 
$

Foreign exchange forward contracts (1)
$

 
$

 
$

 
 
$

 
$
2.1

 
$

 
 
$

 
$
1.6

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange forward contracts (2)
$

 
$
1.3

 
$

 
 
$

 
$

 
$

 
 
$

 
$

 
$

Contingent consideration
$

 
$

 
$

 
 
$

 
$

 
$

 
 
$

 
$

 
$
9.0

    
(1) Included in Prepaid expenses and other current assets in the Company's condensed consolidated balance sheet.
(2) Included in Other current liabilities in the Company's condensed consolidated balance sheet.


INVESTMENTS

The Company invests in marketable securities, principally equity-based mutual funds, to mitigate the risk associated with the investment return on employee deferrals of compensation.

Gains on the investments in marketable securities were $0.7 million and $0.3 million for the fiscal quarter and two fiscal quarters ended July 2, 2016, respectively. Gains on the investments in marketable securities were not material for the fiscal quarter ended July 4, 2015 and were $0.3 million for the two fiscal quarters ended July 4, 2015. These amounts are included in Other expense (income), net on the Company's consolidated statement of operations included in this Quarterly Report on Form 10-Q.


FOREIGN EXCHANGE FORWARD CONTRACTS

Fair values for unsettled foreign exchange forward contracts are calculated by using readily observable market inputs (market-quoted currency exchange rates in effect between U.S. and Canadian dollars).

At July 2, 2016, the notional value of the open foreign currency forward contracts was approximately $20.0 million. These contracts were marked-to-market, or to fair value, resulting in an unrealized loss of approximately $1.3 million at July 2, 2016.

The Company recorded realized losses of approximately $1.1 million and $0.3 million for foreign currency forward contracts settled during the fiscal quarter and two fiscal quarters ended July 2, 2016, respectively. The Company recorded realized gains of approximately $0.3 million for foreign currency forward contracts settled during the second quarter of fiscal 2015. These amounts are included in Other expense (income), net on the Company's consolidated statement of operations. The Company did not apply hedge accounting treatment on any of these foreign currency forward contracts.

During the first quarter of fiscal 2015, the Company had no foreign exchange forward contracts.


CONTINGENT CONSIDERATION

The following table summarizes the changes in the contingent consideration liability during the fiscal quarter and first two fiscal quarters of 2015 related to the Company's 2011 acquisition of Bonnie Togs in Canada:
 
Fiscal quarter ended
 
Two fiscal quarters ended
(dollars in thousands)
July 4, 2015
 
July 4, 2015
Balance at the beginning of period
$
7,661

 
$
7,711

Accretion
326

 
809

Foreign currency translation adjustment
(42
)
 
(575
)
Final contingent adjustment
1,077

 
1,077

Balance at the end of period
$
9,022

 
$
9,022




At July 2, 2016 and January 2, 2016, the Company had no remaining contingent consideration liability related to the 2011 acquisition of Bonnie Togs in Canada.


BORROWINGS

As of July 2, 2016, the fair value of the Company's $185.7 million in outstanding borrowings under its secured revolving credit facility approximated carrying value.

The fair value of the Company's senior notes at July 2, 2016 was approximately $414 million. The fair value of these senior notes with a notional value and carrying value of $400 million was estimated using a quoted price as provided in the secondary market, which considers the Company's credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy.