Note 7 - Derivative Instruments

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Cash flow hedges

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients is billed and collected in US Dollars, but the expenses related to these revenues are paid in Canadian Dollars and Philippine Pesos. We enter into derivative contracts, in the form of forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold) to mitigate this foreign currency exchange risk. The contracts cover periods commensurate with expected exposure, generally three to twelve months.  We have elected to designate our derivatives as cash flow hedges in order to associate the results of the hedges with forecasted expenses.

From January 1, 2020 to March 31, 2020, we entered into Philippine peso and Canadian-dollar non-deliverable forward and range forward contracts for a notional amount of 1,387,999,998 Philippine pesos and 3,028,575 in Canadian Dollars.

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2020:

	For the Three Months Ended March 31, 2020		For the Three Months Ended March 31, 2020		Year Ended December 31,2019		Year Ended December 31,2019
	Local Currency Notional Amount		U.S. Dollar Notional Amount		Local Currency Notional Amount		U.S. Dollar Notional Amount
Philippine Peso		1,597,000		30,650		769,000		14,361
Canadian Dollar		3,300		2,437		1,400		1,047
			$	33,087			$	15,408

The Canadian dollar and Philippine peso foreign exchange contracts are to be delivered periodically through March 2021 at a purchase price of approximately $2,437 and $30,650 respectively, and as such we expect unrealized gains and losses recorded in accumulated other comprehensive income will be reclassified to operations as the forecasted inter-company expenses are incurred, typically within twelve months.

Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note 8, "Fair Value Measurements," and are included in prepaid expense and other current assets and accrued expenses and other current liabilities in our condensed consolidated balance sheets, respectively.

	Gain (Loss) Recognized in AOCI, net of tax			Gain (Loss) Recognized in AOCI, net of tax		Gain/ (Loss) Reclassified from AOCI into Income		Gain/ (Loss) Reclassified from AOCI into Income
	Three months ended March 31, 2020			Three months ended March 31, 2019		Three months ended March 31, 2020		Three months ended March 31, 2019
Cash flow hedges:
Foreign exchange contracts		(860	)		65		188		-

Non-designated hedges

We have also entered into foreign currency range forward contracts and interest swap contract as required by our lenders. These hedges are not designated hedges under ASC 815, Derivatives and Hedging. These contracts generally do not exceed 3 years in duration.

Unrealized gains and losses and changes in fair value of these derivatives are recognized as incurred in Exchange gains (losses), net in the Consolidated Statements of Comprehensive Income (Loss). The following table presents these amounts for the three months ended March 31, 2020 and 2019:

Derivatives not designated under ASC 815	For the Three Months Ended March 31, 2020			For the Three Months Ended March 31, 2019
Foreign currency forward contracts	$	1,771		$	26
Interest rate swap	$	(340	)	$	228