Derivative Instruments

3 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company may enter into foreign currency forward or option contracts (derivative contracts), generally with maturities of 15 months or less, to manage foreign currency risk on expected cash flows and certain existing assets and liabilities, primarily intercompany balances. Certain of these derivative contracts are designated as cash flow hedges of forecasted sales (Designated Derivative Contracts). The Company may also enter into derivative contracts that are not designated as cash flow hedges (Non-Designated Derivative Contracts), to offset a portion of anticipated gains and losses on certain intercompany balances until the expected time of repayment. The after-tax unrealized gains or losses from changes in the fair value of Designated Derivative Contracts are recorded as a component of accumulated other comprehensive loss (AOCL) and are reclassified to net sales in the condensed consolidated statements of comprehensive income in the same period or periods as the related sales are recognized. The Company includes all hedge components in its assessment of effectiveness for its derivative contracts.

Changes in the fair value of Non-Designated Derivative Contracts are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income. The changes in fair value for these contracts are generally offset by the remeasurement gains or losses associated with the underlying foreign currency-denominated intercompany balances, which are recorded in SG&A expenses in the condensed consolidated statements of comprehensive income.

As of June 30, 2021, the Company had the following derivative contracts recorded at fair value in the condensed consolidated balance sheets:


	Designated Derivative Contracts		Non-Designated Derivative Contracts		Total
Notional value	$	103,488	$	16,464	$	119,952
Fair value recorded in other current assets	1,924		335		2,259

As of June 30, 2021, the Company's outstanding derivative contracts were held by an aggregate of four counterparties, all with various maturity dates within the next nine months. As of March 31, 2021, the Company had no outstanding derivative contracts.

The following table summarizes the effect of Designated Derivative Contracts and the related income tax effects recorded in the condensed consolidated statements of comprehensive income for changes in AOCL:


	Three Months Ended June 30,
		2021		2020
Gain recorded in Other comprehensive income		$	1,924	$	464

Income tax expense in Other comprehensive income		(466)		(111)
Total		$	1,458	$	353

The following table summarizes the effect of Non-Designated Derivative Contracts:


	Three Months Ended June 30,
		2021		2020
Gain recorded in SG&A expenses		$	335	$	—

The non-performance risk of the Company and the counterparties did not have a material impact on the fair value of its derivative contracts. As of June 30, 2021, the amount of unrealized gains on derivative contracts recorded in AOCL is expected to be reclassified into net sales within the next nine months. Refer to Note 9, “Stockholders' Equity,” for further information on the components of AOCL.

Subsequent to June 30, 2021 through July 29, 2021, the Company entered into Designated and Non-Designated Derivative Contracts measured at fair value with notional values totaling $6,942 and $11,930, respectively, which are collectively expected to mature within the next nine months. As of July 29, 2021, the Company’s outstanding hedging contracts were held by an aggregate of four counterparties.