Derivative Financial Instruments

Interest Rate Swaps

In order to manage our interest rate exposure, we are party to

$75.0

million of active floating to fixed rate swaps. These swaps convert our interest payments from LIBOR to a weighted average rate of

1.74%

June 30, 2018.

The fair value of the swaps recognized in accrued liabilities and in other comprehensive income (loss) at

June 30, 2018

and

2017

is as follows (in thousands):

						Fair Value at June 30,
Effective Date	Notional Amount		Fixed Interest Rate		Maturity	2018		2017
December 19, 2014		20,000		1.18%	December 19, 2017	$	-	$	8
December 19, 2014		5,000		1.20%	December 19, 2017		-		1
December 18, 2015		15,000		1.46%	December 19, 2018		55		(1	)
December 19, 2015		10,000		2.01%	December 19, 2019		74		(106	)
May 24, 2017		25,000		1.88%	April 24, 2022		764		(60	)
May 24, 2017		25,000		1.67%	May 24, 2020		432		(23	)
						$	1,325	$	(181	)

The Company reported

losses for the years ended

June 30, 2018,

2017,

and

2016,

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 purchases of materials and loan payments between subsidiaries. The Company enters into such contracts for hedging purposes only. The Company has designated certain of these currency contracts as hedges, and changes in the fair value of these contracts are recognized in other comprehensive income until the hedged items are recognized in earnings. Hedge ineffectiveness, if any, associated with these contracts will be reported in net income. At

June 30, 2018

and

2017,

the Company had outstanding forward contracts related to hedges of intercompany loans with net unrealized gain / (losses) of $(

2.9

) million and $(

2.8

) million, respectively, which approximate the unrealized gains or losses on the related loans. The contracts have maturity dates ranging from

2018

2023,

which correspond to the related intercompany loans. The notional amounts of these instruments, by currency in thousands, are as follows:

Currency	2018		2017
USD		64,558		73,000
Euro		21,300		21,335
Pound Sterling		6,826		6,962
Peso		54,000		54,000
Canadian		20,600		20,600

The table below presents the fair value of derivative financial instruments as well as their classification on the balance sheet at

June 30, (

in thousands):

	Asset Derivatives
	2018			2017
Derivative designated as hedging instruments	Balance Sheet			Balance Sheet
	Line Item	Fair Value		Line Item	Fair Value
Interest rate swaps	Other Assets	$	1,325	Accrued Liabilities	$	-
Foreign exchange contracts	Other Assets		1,357	Accrued Liabilities		-
		$	2,682		$	-

	Liability Derivatives
	201 8			201 7
Derivative designated as hedging instruments	Balance Sheet			Balance Sheet
	Line Item	Fair Value		Line Item	Fair Value
Interest rate swaps	Accrued Liabilities	$	-	Accrued Liabilities	$	181
Foreign exchange contracts	Accrued Liabilities		4,204	Accrued Liabilities		2,833
		$	4,204		$	3,014

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):

	2018		2017			2016
Interest rate swaps	$	1,367	$	282		$	(743	)
Foreign exchange contracts		1,174		(3,178	)		(267	)
	$	2,541	$	(2,896	)	$	(1,010	)

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								in the Statements
Income (Loss) Components	2018		2017			2016		of Operations
Interest rate swaps	$	171	$	399		$	567	Interest expense
Foreign exchange contracts		-		75			112	Cost of goods sold
Foreign exchange contracts		121		(861	)		-	Interest expense
	$	292	$	(387	)	$	679