Financial Instruments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Financial Instruments and Fair Value Measurements [Abstract]

Notional Amounts and Fair Values of Derivative Instruments in the Consolidated Balance

The notional amounts and fair values of derivative instruments in the condensed consolidated balance sheets were as follows:

					Prepaid expenses				Accrued expenses and
	Notional amounts (A)				and other current assets				other current liabilities
	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2020		2019		2020		2019		2020		2019
Derivatives designated as hedging instruments:
Cash flow hedges:
Forward currency contracts	$	24,846	$	-	$	66	$	-	$	3,230	$	-
Interest rate swap contract	$	50,000		-		-		-	$	1,463	$	-

(A) Notional amounts represent the gross contract of the derivatives outstanding in U.S. dollars.

Amounts Recorded for the Cash Flow Hedges in Other Comprehensive Income (Loss) in Shareholders' Equity and in Net Income

Gross amounts recorded for the cash flow hedges in other comprehensive income (loss) and in net income for the three months ended March 31 were as follows:

					Gain (loss) reclassified from
	Gain (loss) recorded in other				other comprehensive income
	comprehensive income (loss) (A)				(loss) into net income (B)
	2020		2019		2020		2019
Derivatives designated as cash flow hedges:
Forward currency contracts	$	(3,320)	$	269	$	(156)	$	216
Interest rate swap		(1,467)		-		(4)		-

(A) For the three months ended March 31, 2020, the total net losses on the foreign currency contract cash flow hedges of $3,164 are expected to be included in cost of goods sold (“COGS”) and design and development (“D&D”) within the next 12 months. Of the total net losses on the interest rate swap cash flow hedges, approximately $545 of losses are expected to be included in interest expense within the next 12 months and $918 of losses are expected to be included in interest expense in subsequent periods.

(B) Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in COGS in the Company’s condensed consolidated statements of operations were $(127) and $173 for the three months ended March 31, 2020 and 2019, respectively. Gains (losses) reclassified from other comprehensive income (loss) into net income recognized in design and development D&D in the Company’s condensed consolidated statements of operations were $(29) and $43 for the three months ended March 31, 2020 and 2019, respectively. Losses reclassified from other comprehensive income (loss) into net income recognized in interest expense in the Company’s condensed consolidated statements of operations was $4 for the three months ended March 31, 2020.

Cash flows from derivatives used to manage foreign exchange and interest rate risks are classified as operating activities within the condensed consolidated statements of cash flows.

Schedule of Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table presents our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the three levels of the fair value hierarchy based on the reliability of inputs used.

								March 31,		December 31,
			2020						2019
			Fair values estimated using
			Level 1		Level 2		Level 3
	Fair value		inputs		inputs		inputs		Fair value
Financial assets carried at fair value:
Forward currency contract	$	66	$	-	$	66	$	-	$	-
Total financial assets carried at fair value	$	66	$	-	$	66	$	-	$	-
Financial liabilities carried at fair value:
Forward currency contracts	$	3,230	$	-	$	3,230	$	-	$	-
Interest rate swap		1,463		-		1,463		-		-
Earn-out consideration		8,610		-		-		8,610		12,011
Total financial liabilities carried at fair value	$	13,303	$	-	$	4,693	$	8,610	$	12,011

Summary of the Change in Fair Value of the Level 3 Financial Liabilities Related to Contingent Consideration

The following table sets forth a summary of the change in fair value of the Company’s Level 3 financial liabilities related to earn-out consideration that are measured at fair value on a recurring basis.

	Stoneridge Brazil		Total
Balance at December 31, 2019	$	12,011	$	12,011
Change in fair value		(633)		(633)
Foreign currency adjustments		(2,768)		(2,768)
Balance at March 31, 2020	$	8,610	$	8,610

	Orlaco		Stoneridge Brazil		Total
Balance at December 31, 2018	$	8,602	$	10,070	$	18,672
Change in fair value		-		469		469
Foreign currency adjustments		(128)		(133)		(261)
Earn-out consideration cash payment		(8,474)		-		(8,474)
Balance at March 31, 2019	$	-	$	10,406	$	10,406