Hedging Activities

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging Activities

Hedging Activities

The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements. The Company does not hold or enter into financial instruments for trading or speculative purposes.

Foreign Exchange Forward Contracts

The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain assets and/or liabilities denominated in certain foreign currencies. These forward contracts are marked-to-market at each reporting date. Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other income (expense), net. The fair value of the forward contract is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments.

Open foreign exchange forward contracts as of March 31, 2024 were entered into as hedges in Japanese yen and Mexican peso against the U.S. dollar and Chinese yuan against the Euro. As of March 31, 2024, the Company had open foreign exchange forward contracts with notional U.S. dollar values of the following:

Currency	March 31, 2024
Mexican Peso	$	41,000
Japanese Yen	7,200
Chinese Yuan	7,800
	$	56,000

Open foreign exchange forward contracts as of March 31, 2024 had maturities occurring over a period of one month.

Interest Rate Swaps

In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three year interest rate swaps to convert a portion of the Company’s variable rate borrowings into a fixed rate obligation. See Note 14 of Notes to Condensed Consolidated Financial Statements. These interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur.

The balance sheet classification and fair values of the Company’s derivative instruments, which are Level 2 measurements, are as follows:

Derivatives instruments	Condensed Consolidated Balance Sheets Location	March 31, 2024		December 31, 2023
Interest rate swaps:	Other non-current assets	$	4,873	$	1,828
Foreign currency forward contracts:	Other accrued liabilities	—		159
	Prepaid expenses and other current assets	687		—

The following table presents the net unrealized loss deferred to AOCI:

Derivatives designated as cash flow hedges		March 31, 2024		December 31, 2023
Interest rate swaps	AOCI	$	3,752	$	1,407

The following table presents the location and the amount of net gain recognized in the Company’s Condensed Consolidated Statements of Operations related to derivative instruments for the three months ended March 31, 2024 and 2023:

Derivative instruments	Condensed Consolidated Statements of Operations Location	2024		2023
Interest rate swaps	Interest expense, net	$	1,286	$	—
Foreign exchange forward contracts	Other income, net	943		293
Total		$	2,229	$	293