Foreign Exchange Forward Contracts

12 Months Ended

Jun. 30, 2017

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Foreign Exchange Forward Contracts

12. Foreign Exchange Forward Contracts

The Company uses derivative financial instruments to manage exposures to foreign currency.  The Company’s objective for holding derivatives is to use the most effective methods to minimize the impact of these exposures.   The Company does not enter into derivatives for speculative or trading purposes.  The Company records all derivatives on the balance sheet as “Other accrued liabilities” at fair value.  Changes in the fair value of derivatives are recognized in earnings as “Other income (loss)”.  The Company enters into foreign exchange forward contracts to mitigate the effect of gains and losses generated by foreign currency transactions related to certain operating expenses and re-measurement of certain assets and liabilities denominated in foreign currencies.  Cash flows from such hedges are classified as operating activities.

At June 30, 2017, forward foreign currency contracts had a notional principal amount of $6.7 million. These contracts have maturities of less than 60 days.  Changes in the fair value of these foreign exchange forward contracts are offset largely by remeasurement of the underlying assets and liabilities.  At June 30, 2016, the Company did not have any forward foreign currency contracts outstanding.  

Foreign currency transaction gains and losses from operations were losses of $0.7 million and $1.0 million in fiscal 2017 and 2015, respectively and gains of $1.3 million in fiscal 2016.