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Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Oct. 02, 2020

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):


	Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
October 2, 2020

Assets: Foreign currency contracts	$	98	$	—	$	98	$	—
Liabilities: Foreign currency contracts	836		—		836		—
Liabilities: Interest rate swaps	8,038		—		8,038		—
Liabilities: Contingent consideration	5,401		—		—		5,401


December 31, 2019
Assets: Foreign currency contracts	$	710	$	—	$	710	$	—
Liabilities: Interest rate swaps	3,068		—		3,068		—
Liabilities: Contingent consideration	4,200		—		—		4,200

Information regarding the Company’s outstanding interest rate swaps designated as cash flow hedges as of October 2, 2020 is as follows (dollars in thousands):


Notional Amount		Start Date	End Date	Pay Fixed Rate		Receive Current Floating Rate		Fair Value		Balance Sheet Location



$	200,000	Jun 2020	Jun 2023	2.1785	%	0.1448	%	$	(8,038)	Other long-term liabilities

(13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

Information regarding the Company’s outstanding interest rate swaps designated as cash flow hedges as of December 31, 2019 is as follows (dollars in thousands):


Notional Amount		Start Date	End Date	Pay Fixed Rate		Receive Current Floating Rate		Fair Value		Balance Sheet Location
$	200,000	Jun 2017	Jun 2020	1.1325	%	1.7920	%	$	543	Accrued expenses and other current liabilities
65,000		Jul 2019	Jul 2020	1.8900		1.7920		(72)		Accrued expenses and other current liabilities
400,000		Apr 2019	Apr 2020	2.4150		1.7101		(730)		Accrued expenses and other current liabilities
200,000		Jun 2020	Jun 2023	2.1785		(a)		(2,809)		Other long-term liabilities

__________

(a) The interest rate swap did not take effect until June 2020.

Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of October 2, 2020 is as follows (dollars in thousands):


Notional Amount		Start Date	End Date	$/Foreign Currency		Fair Value		Balance Sheet Location


$	7,666	Jul 2020	Dec 2020	0.0491	MXN Peso	$	(519)	Accrued expenses and other current liabilities
2,290		Mar 2020	Dec 2020	0.0241	UYU Peso	(52)		Prepaid expenses and other current assets
18,514		Nov 2020	Sep 2021	1.1944	Euro	(274)		Accrued expenses and other current liabilities
10,224		Jan 2021	Sep 2021	0.0454	MXN Peso	(109)		Accrued expenses and other current liabilities
2,343		Nov 2020	Nov 2020	1.1717	Euro	2		Accrued expenses and other current liabilities
2,656		Jan 2021	Mar 2021	0.0443	MXN Peso	64		Accrued expenses and other current liabilities
3,252		Jan 2021	Aug 2021	0.0232	UYU Peso	150		Prepaid expenses and other current assets

Information regarding outstanding foreign currency contracts designated as cash flow hedges as of December 31, 2019 is as follows (dollars in thousands):

Notional Amount

Start
Date

End
Date

$/Foreign Currency

Fair Value

Balance Sheet Location

11,166

Jan 2020

Jun 2020

0.0490

MXN Peso

710

Prepaid expenses and other current assets

Schedule of Estimated Fair Values for Contingent Consideration

The following table presents the changes in the estimated fair values of the Company’s liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for the nine months ended October 2, 2020 (in thousands):


December 31, 2019	$	4,200
Contingent consideration liabilities recorded for acquisitions	2,700
Fair value adjustment included in Other operating expenses	(500)
Settlements	(1,000)
Foreign currency translation	1
October 2, 2020	$	5,401

As of October 2, 2020, the estimated fair value of the contingent consideration was $5.4 million, of which $1.2 million is included as current contingent consideration and $4.2 million is included in non-current contingent consideration in the Condensed Consolidated Balance Sheets.

Derivative Instruments with Hedge Accounting Designation

The following tables present the effect of cash flow hedge derivative instruments on other comprehensive income (loss) (“OCI”),

AOCI and the Company’s Condensed Consolidated Statement of Operations for the three and nine months ended October 2, 2020 and September 27, 2019 (in thousands):

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)


	Three Months Ended
	October 2, 2020				September 27, 2019
	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity
Sales	$	235,942	$	590	$	303,587	$	(500)
Cost of sales	178,009		(651)		210,201		309
Operating expenses	18,175		(23)		46,905		—
Interest expense	9,368		(1,066)		12,337		444



	Nine Months Ended
	October 2, 2020				September 27, 2019
	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity
Sales	$	804,483	$	549	$	932,457	$	(1,294)
Cost of sales	591,985		(1,059)		653,477		1,137
Operating expenses	119,479		(57)		143,993		—
Interest expense	29,002		(2,431)		39,779		1,847

(13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)


	Unrealized Gain (Loss) Recognized in OCI				Realized Gain (Loss) Reclassified from AOCI
	Three months ended,				Location in Statement of Operations	Three months ended,
	October 2, 2020		September 27, 2019			October 2, 2020		September 27, 2019
Interest rate swap	$	(11)	$	(991)	Interest expense	$	(1,066)	$	444
Foreign exchange forwards	68		(400)		Sales	590		(500)
Foreign exchange forwards	451		(68)		Cost of sales	(651)		309
Foreign exchange forwards	57		—		Operating expenses	(23)		—









	Nine Months Ended				Location in Statement of Operations	Nine Months Ended
	October 2, 2020		September 27, 2019			October 2, 2020		September 27, 2019
Interest rate swaps	$	(7,401)	$	(6,590)	Interest expense	$	(2,431)	$	1,847
Foreign exchange contracts	277		(1,099)		Sales	549		(1,294)
Foreign exchange contracts	(2,277)		1,661		Cost of sales	(1,059)		1,137
Foreign exchange forwards	(15)		—		Operating expenses	(57)		—

Schedule of Equity Method Investments

Equity investments comprise the following (in thousands):


	October 2, 2020		December 31, 2019
Equity method investment	$	19,718	$	16,167
Non-marketable equity securities	6,092		6,092
Total equity investments	$	25,810	$	22,259

(13.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

The components of (Gain) Loss on Equity Investments, Net for each period were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
Equity method investment income	$	(2,234)	$	(986)	$	(3,954)	$	(909)
Impairment charges	—		—		—		1,575

Total (gain) loss on equity investments, net	$	(2,234)	$	(986)	$	(3,954)	$	666