Note 9 - Derivative Financial Instruments

6 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

9) Derivative Financial Instruments

Interest Rate Swaps

From time to time as dictated by market opportunities, the Company enters into interest rate swap agreements designed to manage exposure to interest rates on the Company’s variable rate indebtedness. The Company recognizes all derivatives on its balance sheet at fair value. The Company has designated its interest rate swap agreements, including those that are forward-dated, as cash flow hedges, and changes in the fair value of the swaps are recognized in other comprehensive income until the hedged items are recognized in earnings. Hedge ineffectiveness, if any, associated with the swaps will be reported by the Company in interest expense.

The Company’s effective swap agreements convert the base borrowing rate on $45 million of debt due under our revolving credit agreement from a variable rate equal to LIBOR to a weighted average fixed rate of 2.40% at December 31, 2013. The fair value of the swaps recognized in accrued expenses and in other comprehensive income is as follows (in thousands):

							Fair Value
Effective Date	Notional Amount		Fixed Rate			Maturity	December 31, 2013			June 30, 2013
June 1, 2010	$	5,000,000		2.495	%	May 24, 2015	$	(159	)	$	(205	)
June 1, 2010		5,000,000		2.495	%	May 24, 2015		(159	)		(205	)
June 8, 2010		10,000,000		2.395	%	May 26, 2015		(303	)		(389	)
June 9, 2010		5,000,000		2.340	%	May 26, 2015		(148	)		(190	)
June 18, 2010		5,000,000		2.380	%	May 24, 2015		(151	)		(194	)
September 21, 2011		5,000,000		1.280	%	September 21, 2013		-			(14	)
September 21, 2011		5,000,000		1.595	%	September 22, 2014		(53	)		(83	)
March 15, 2012		10,000,000		2.745	%	March 15, 2016		(517	)		(595	)
							$	(1,490	)	$	(1,875	)

The Company reported no losses for the three and six months ended December 31, 2013, as a result of hedge ineffectiveness. Future changes in these swap arrangements, including termination of the agreements, may result in a reclassification of any gain or loss reported in accumulated other comprehensive income (loss) into earnings as an adjustment to interest expense. Accumulated other comprehensive income (loss) related to these instruments is being amortized into interest expense concurrent with the hedged exposure.

Foreign Exchange Contracts

Forward foreign currency exchange contracts are used to limit the impact of currency fluctuations on certain anticipated foreign cash flows, such as foreign sales, foreign purchases of materials, and loan payments to and from subsidiaries. The Company enters into such contracts for hedging purposes only. For hedges of intercompany loan payments, the Company has not elected hedge accounting due to the general short-term nature and predictability of the transactions, and records derivative gains and losses directly to the statement of operations. At December 31, 2013 and June 30, 2013, the Company had outstanding forward contracts related to hedges of intercompany loans with net unrealized (losses) of ($1.9) million and ($1.4) million, respectively, which approximate the unrealized gains and losses on the related loans. The notional amounts of the Company’s forward contracts, by currency, are as follows:

	Notional Amount (in native currency)
Currency	December 31, 2013		June 30, 2013
Euro		42,679,064		48,349,064
British Pound Sterling		2,000,000		2,580,289
Canadian Dollar		3,600,000		3,600,000

The table below presents the fair value of derivative financial instruments as well as their classification on the balance sheet (in thousands):

	Assets Derivatives
	December 31, 2013			June 30,2013
Derivative designated as hedging instruments	Balance Sheet Line Item	Fair Value		Balance Sheet Line Item	Fair Value
Foreign exchange contracts	Other Assets	$	751	Other Assets	$	37

	Liability Derivatives
	December 31, 2013			June 30,2013
Derivative designated as hedging instruments	Balance Sheet Line Item	Fair Value		Balance Sheet Line Item	Fair Value
Interest rate swaps	Accrued Liabilities	$	1,490	Accrued Liabilities	$	1,875
Foreign exchange contracts	Accrued Liabilities		2,626	Accrued Liabilities		1,443
		$	4,116		$	3,318

The table below presents the amount of gain (loss) recognized in comprehensive income on our derivative financial instruments (effective portion) designated as hedging instruments and their classification within comprehensive income for the periods ended (in thousands):

	Three Months Ended					Six Months Ended
	December 31,					December 31,
	2013			2012		2013			2012
Interest rate swaps	$	(30	)	$	52	$	(120	)	$	(209	)

The table below presents the amount reclassified from accumulated other comprehensive income (loss) to Net Income for the periods ended (in thousands):

Details about Accumulated									Affected line item
Other Comprehensive	Three Months Ended				Six Months Ended				in the Statements
Income (Loss) Components	December 31,				December 31,				of Operations
	2013		2012		2013		2012
Interest rate swaps	$	255	$	264	$	522	$	525	Interest expense