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DERIVATIVE FINANCIAL INSTRUMENTS
 3 Months Ended
Sep. 29, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative Financial Instruments
As of September 29, 2018, the Company had outstanding foreign currency forward contracts and swaps with a total notional amount of $41.0 million. The maturity dates for these contracts and swaps extend through March 2020. For the three months ended September 29, 2018, the Company did not enter into any foreign currency forward contracts and settled $5.3 million of such contracts. During the same period of the previous year, the Company did not enter into foreign currency forward contracts and settled $5.4 million of such contracts.
As of September 29, 2018, the aggregate notional amount of the Company’s outstanding foreign currency contracts and swaps along with their unrealized gains (losses) are expected to mature as summarized below (in thousands):
Quarter Ending
 
Notional Contracts and Swaps in MXN
 
Notional Contracts and Swaps in USD
 
Estimated Fair Value
December 29, 2018
 
$
125,328

 
$
6,746

 
$
(94
)
March 30, 2019
 
$
137,944

 
$
6,979

 
$
240

June 29, 2019
 
$
142,947

 
$
6,828

 
$
546

September 28, 2019
 
$
148,468

 
$
6,740

 
$
811

December 28, 2019
 
$
152,613

 
$
7,187

 
$
484

March 28, 2020
 
$
146,613

 
$
6,553

 
$
720


On October 1, 2014, the Company entered into an interest rate swap contract with an effective date of September 1, 2015 and a termination date of September 3, 2019, with a notional amount of $25.0 million related to the borrowings outstanding under the term loan. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.97% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our term loan. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the term loan, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge.
The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of September 29, 2018 and June 30, 2018 (in thousands):
 
 
 
September 29, 2018
 
June 30, 2018
Derivatives Designated as Hedging Instruments
Balance Sheet Location
 
Fair Value
 
Fair Value
Foreign currency forward contracts & swaps
Other current assets
 
$
1,597

 
$
23

Foreign currency forward contracts & swaps
Other long-term assets
 
$
1,204

 
$
477

Foreign currency forward contracts & swaps
Other current liabilities
 
$
(94
)
 
$
(1,618
)
Foreign currency forward contracts & swaps
Other long-term liabilities
 
$
—

 
$
(58
)
Interest rate swap
Other current assets
 
$
24

 
$
20

Interest rate swap
Other long-term assets
 
$
—

 
$
4



The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended September 29, 2018 and September 30, 2017, respectively (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
June 30, 2018
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Income
 
AOCI Balance
as of
September 29, 2018
Forward contracts & swaps
Cost of sales
 
$
(988
)
 
$
2,515

 
$
534

 
$
2,061

Interest rate swap
Interest expense
 
19

 
2

 
(2
)
 
19

Total
 
 
$
(969
)
 
$
2,517

 
$
532

 
$
2,080

 
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
July 1, 2017
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Income
 
AOCI Balance
as of
September 30, 2017
Forward contracts & swaps
Cost of sales
 
$
(2,707
)
 
$
(122
)
 
$
1,114

 
$
(1,715
)
Interest rate swap
Interest expense
 
(68
)
 
(9
)
 
29

 
(48
)
Total
 
 
$
(2,775
)
 
$
(131
)
 
$
1,143

 
$
(1,763
)

As of September 29, 2018, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $1.2 million. As of September 29, 2018, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.