Financial Instruments

3 Months Ended

Mar. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Financial Instruments

Note 13 – Financial Instruments

Cash, Cash Equivalents and Restricted Cash

The Company has cash that is legally restricted as to use or withdrawal. A reconciliation of cash and cash equivalents on the consolidated condensed balance sheets to cash, cash equivalents and restricted cash presented on the consolidated condensed statements of cash flows is as follows:

	March 31, 2020		December 31, 2019
Cash and cash equivalents presented in the consolidated    condensed balance sheets	$	222,939	$	50,443
Restricted cash		2,505		2,505
Cash, cash equivalents and restricted cash presented in the    consolidated condensed statements of cash flows	$	225,444	$	52,948

Derivative Financial Instruments

The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates, changes in interest rates and commodity price fluctuations. Market risks for changes in interest rates relate primarily to its debt obligations under the Amended Credit Agreement. Foreign currency exchange risks are attributable to sales to foreign customers and purchases from foreign suppliers not denominated in a location’s functional currency, foreign plant operations, intercompany indebtedness, intercompany investments and include exposures to the Euro, Mexican Peso, Canadian Dollar, Hungarian Forint, Macedonian Denar, Ukrainian Hryvnia, Japanese Yen, Chinese Renminbi, Korean Won and Vietnamese Dong.

The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from these risks by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. The maximum length of time over which the Company hedges its exposure to foreign currency exchange risks is one year. The Company had foreign currency derivative contracts with a notional value of $22,176 and $14,449 outstanding as of March 31, 2020 and December 31, 2019, respectively.  

The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company’s hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. For derivative contracts which can be classified as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded to accumulated other comprehensive loss in the consolidated condensed balance sheets.  When the underlying hedge transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings in the consolidated condensed statements of income on the same line as the gain or loss on the hedged item attributable to the hedged risk.  The Company records the ineffective portion of foreign currency hedging instruments, if any, to foreign currency gain (loss) in the consolidated condensed statements of income.

The Company uses an income approach to value derivative instruments, analyzing quoted market prices to calculate the forward values and then discounts such forward values to the present value using benchmark rates at commonly quoted intervals for the instrument’s full term.

Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of March 31, 2020 is as follows:

Asset Derivatives

Liability Derivatives

Hedge Designation

Fair Value Hierarchy

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Net Asset/ (Liabilities)

Foreign currency derivatives

Cash flow hedge

Level 2

Other current assets

$

—

Other current liabilities

$

(3,553

)

$

(3,553

)

Information related to the recurring fair value measurement of derivative instruments in our consolidated condensed balance sheet as of December 31, 2019 is as follows:

			Asset Derivatives			Liability Derivatives
	Hedge Designation	Fair Value Hierarchy	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Net Asset/ (Liabilities)
Foreign currency derivatives	Cash flow hedge	Level 2	Other current assets	$	1,242	Other current liabilities	$	—	$	1,242

Information relating to the effect of derivative instruments on our consolidated condensed statements of income is as follows:  

		Three Months Ended March 31,
	Location	2020			2019
Foreign currency derivatives	Cost of sales	$	78		$	240
	Other comprehensive (loss) income		(4,795	)		766
	Foreign currency loss		(71	)		(37	)
Total foreign currency derivatives		$	(4,788	)	$	969

The Company did not incur any hedge ineffectiveness during the three months ended March 31, 2020 and 2019.