Derivative Instruments

6 Months Ended

Jul. 03, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. The Company enters into economic hedges utilizing foreign currency forward contracts with maturities that do not exceed approximately three months to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are intended to be offset by the changes in the fair value of the assets and liabilities being hedged. These economic hedges are not designated as hedging instruments for hedge accounting treatment.

The Company had the following outstanding forward contracts (in thousands):

	July 3, 2022			December 31, 2021
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Not Designated as Hedging Instruments:
Euro	75,000	$	78,329	65,000	$	73,748
Chinese Renminbi	183,500	27,377		54,374	8,500
Mexican Peso	220,000	10,839		140,000	6,842
Japanese Yen	650,000	4,789		600,000	5,213
British Pound	3,150	3,833		3,370	4,552
Hungarian Forint	1,355,000	3,552		1,355,000	4,155
Korean Won	4,270,000	3,302		—	—
Canadian Dollar	—	—		1,480	1,167

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance	Fair Value				Balance	Fair Value
	Sheet Location	July 3, 2022		December 31, 2021		Sheet Location	July 3, 2022		December 31, 2021
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	46	$	39	Accrued expenses	$	425	$	230

The following table presents the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):

Asset Derivatives					Liability Derivatives
	July 3, 2022		December 31, 2021			July 3, 2022		December 31, 2021
Gross amounts of recognized assets	$	46	$	39	Gross amounts of recognized liabilities	$	425	$	230
Gross amounts offset	—		—		Gross amounts offset	—		—
Net amount of assets presented	$	46	$	39	Net amount of liabilities presented	$	425	$	230

Information regarding the effect of derivative instruments on the consolidated financial statements was as follows (in thousands):

	Location in Financial Statements	Three-months Ended				Six-months Ended
		July 3, 2022		July 4, 2021		July 3, 2022		July 4, 2021
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	6,191	$	(746)	$	7,930	$	2,148