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Derivative Instruments
12 Months Ended
Dec. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
Foreign Currency Exchange Forward Contracts
    The Company transacts business in various foreign currencies and has international sales, cost of sales, and expenses denominated in foreign currencies, and carries foreign-currency-denominated account balances, subjecting the Company to foreign currency risk. The Company’s primary foreign currency risk management objective is to protect the U.S. dollar value of future cash flows and minimize the volatility of reported earnings. The Company utilizes foreign currency forward contracts, primarily short term in nature.
Historically, the Company enters into foreign currency exchange forward contracts to manage its exposure to fluctuation in foreign exchange rates that arise from its euro and British pound denominated account
balances. Gains and losses on these contracts are intended to offset the impact of foreign exchange rate fluctuations on the underlying foreign currency denominated account balances, do not subject the Company to material balance sheet risk.
As of December 26, 2020 and December 28, 2019, the Company posted $0.9 million and $0.9 million, respectively of collateral on its derivative instruments to cover potential credit risk exposure. This amount is classified as other long-term restricted cash on the accompanying consolidated balance sheets.
The before-tax effect of foreign currency exchange forward contracts was a gain of $0.3 million, $0.5 million and $0.7 million for 2020, 2019 and 2018, respectively, included in other gain (loss), net, in the consolidated statements of operations. In each of these periods, the impact of the gross gains and losses were offset by foreign exchange rate fluctuations on the underlying foreign currency denominated amounts.
As of December 26, 2020, the Company did not designate foreign currency exchange forward contracts as hedges for accounting purposes and accordingly, changes in the fair value are recorded in the accompanying consolidated statements of operations. These contracts were with one high-quality institution and the Company consistently monitors the creditworthiness of the counterparties.
    The fair value of derivative instruments not designated as hedging instruments in the Company’s consolidated balance sheets was as follows (in thousands):
 As of December 26, 2020As of December 28, 2019
 
Gross
Notional(1)
Other
Accrued
Liabilities
Gross
Notional(1)
Other
Accrued
Liabilities
Foreign currency exchange forward contracts
Related to euro denominated receivables$23,605 $(59)$27,566 $(159)
Related to British pound denominated receivables4,868 (13)— — 
Total$28,473 $(72)$27,566 $(159)
(1)Represents the face amounts of forward contracts that were outstanding as of the period noted.
Accounts Receivable Factoring
The Company sells certain designated trade account receivables based on factoring arrangements with well-established factoring companies. Pursuant to the terms of the arrangements, the Company accounts for these transactions in accordance with ASC 860, "Transfers and Servicing". The Company's factor purchases trade accounts receivables on a non-recourse basis and without any further obligations. Trade accounts receivables balances sold are removed from the consolidated balance sheets and cash received are reflected as cash provided by operating activities in the consolidated statements of cash flow. The difference between the fair value of the Company's trade receivables and the proceeds received is recorded as interest expense in the Company's consolidated statements of operations. For the years ended December 26, 2020, December 28, 2019 and December 29, 2018, the Company's recognized factoring related interest expense was approximately $0.4 million, $0.6 million and $0.1 million, respectively. The gross amount of trade accounts receivables sold totaled approximately $80.2 million and $84.8 million for the year ended December 26, 2020 and December 28, 2019 respectively. Prior to the Acquisition, the Company had not entered into any factoring arrangements.