Derivatives and Hedging Activities

12 Months Ended

Jan. 26, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivatives and Hedging Activities

The Company is exposed to certain risk arising from both its business operations and economic conditions and principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company, on a routine basis and in the normal course of business, experiences expenses denominated in Swiss Franc ("CHF"), Canadian Dollar ("CAD") and Great British Pound ("GBP"). Such expenses expose the Company to exchange rate fluctuations between these foreign currencies and the U.S. Dollar ("USD"). From time to time, the Company uses derivative financial instruments in the form of forward contracts to mitigate risk associated with adverse movements in these foreign currency exchange rates on a portion of foreign denominated expenses expected to be realized during the current and following fiscal year. Currency forward contracts involve fixing the exchange rate for delivery of a specified amount of foreign currency on a specified date. The Company’s accounting treatment for these instruments is based on whether or not the instruments are designated as a hedging instrument. At January 26, 2020, the Company had no outstanding foreign exchange contracts. At January 27, 2019, the Company had a foreign currency derivative designated as a cash flow hedge that had a notional value of $3.9 million and a fair value of $0.1 million.

Subsequent to the end of fiscal year 2020, we entered into an interest rate swap agreement to hedge the variability of interest payments on $150.0 million of debt outstanding under our Credit Facility. The swap has a three-year term and based on our current leverage ratio, interest payments on $150.0 million of our debt are now fixed at 1.9775%.