Note 8 - Derivative Financial Instruments

12 Months Ended

Dec. 30, 2023

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

8. Derivative Financial Instruments

Foreign Exchange Derivative Contracts

We operate and sell our products in various global markets and, as a result, we are exposed to changes in foreign currency exchange rates. To minimize foreign exchange volatility we utilize foreign currency forward contracts to offset against future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities. Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts to mitigate the risks and volatility associated with foreign currency transaction gains or losses.

We do not use derivative financial instruments for speculative or trading purposes. For accounting purposes, our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our consolidated statements of income for both realized and unrealized gains and losses. The cash flows associated with the foreign currency forward contracts are reported in net cash provided by operating activities in our consolidated statements of cash flows.

The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points. All our foreign exchange derivative contracts outstanding at December 30, 2023 will mature during the first quarter of fiscal 2024.

The following table provides information about our foreign currency forward contracts outstanding as of December 30, 2023 (in thousands):

Currency	Contract Position	Contract Amount (Local Currency)		Contract Amount (U.S. Dollars)
Euro	Buy		89,186	$	98,800
Swiss Franc	Buy		10,407		12,400
South Korean Won			2,574,040		2,000
Malaysian Ringgit			9,200		2,000
				$	115,200

Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. The fair value of our foreign currency contracts as of December 30, 2023 was immaterial.

The location and amount of losses related to non-designated derivative instruments in the consolidated statements of income were as follows (in thousands):

Derivatives Not Designated	Location of Gain (Loss)	Fiscal Year
as Hedging Instruments	Recognized on Derivatives	2023			2022			2021
Foreign exchange forward contracts	Foreign transaction gain (loss)	$	(2,127	)	$	(5,356	)	$	(3,428	)