Derivative Instruments

9 Months Ended

Oct. 01, 2023

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.

Additionally, during the three-month period ended October 1, 2023, the Company entered into a foreign currency forward contract to exchange U.S. Dollars for ¥40,000,000,000 to hedge the Japanese Yen purchase price of the acquisition of Moritex Corporation (refer to Note 19 of the consolidated financial statements). Upon the settlement of this contract, the Company recorded a foreign currency loss of $8,456,000, which was recorded in "Foreign currency gain (loss)" on the Consolidated Statements of Operations for the three-month period ended October 1, 2023.

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

	October 1, 2023			December 31, 2022
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Not Designated as Hedging Instruments:
Japanese Yen	40,600,000	$	272,499	700,000	$	5,281
Euro	37,500	39,741		60,000	64,174
Singapore Dollar	40,500	29,747		—	—
Chinese Renminbi	200,000	27,445		55,000	7,619
Mexican Peso	100,000	5,722		185,000	9,480
Hungarian Forint	1,930,000	5,221		1,590,000	4,238
British Pound	3,230	3,956		3,445	4,161
Canadian Dollar	1,650	1,225		1,730	1,278
Swiss Franc	—	—		1,120	1,218

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	October 1, 2023		December 31, 2022		Sheet Location	October 1, 2023		December 31, 2022
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	196	$	27	Accrued expenses	$	128	$	479

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
	October 1, 2023		December 31, 2022			October 1, 2023		December 31, 2022
Gross amounts of recognized assets	$	196	$	27	Gross amounts of recognized liabilities	$	128	$	479
Gross amounts offset	—		—		Gross amounts offset	—		—
Net amount of assets presented	$	196	$	27	Net amount of liabilities presented	$	128	$	479

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

	Location in Financial Statements	Three-months Ended				Nine-months Ended
		October 1, 2023		October 2, 2022		October 1, 2023		October 2, 2022
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	(7,527)	$	7,161	$	(8,139)	$	15,091