Note 7 - Derivative Financial Instruments

3 Months Ended

Mar. 29, 2025

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

7.         Derivative Financial Instruments

Economic (Non-Designated) Hedges

We enter into foreign currency forward contracts to manage our foreign exchange exposure related to intercompany transactions and other balance sheet items that are subject to revaluation. For accounting purposes, our foreign currency forward contracts that are not designated as hedging instruments are recorded at fair value as of the end of our reporting period in our condensed consolidated balance sheets with changes in fair value recorded within foreign transaction gain (loss) in our condensed consolidated statements of operations for both realized and unrealized gains and losses. The gain or loss recorded on these instruments is substantially offset by the remeasurement adjustment on the foreign currency denominated asset or liability.

The location and amount of gains and losses related to non-designated derivative instruments in the condensed consolidated statements of operations were as follows (in thousands):

		Three Months Ended
Derivatives not designated	Location of gain (loss)	March 29,		March 30,
as hedging instruments	recognized on derivatives	2025		2024
Foreign exchange forward contracts	Foreign transaction gain (loss)	$	1,505	$	(4,078	)

Net Investment Hedges

In the third quarter of fiscal 2024 we began hedging foreign currency risk associated with net investment positions in certain of our foreign subsidiaries. To accomplish this, we enter into foreign currency forward contracts that are designated as hedges of our net investment.

The location and amount of losses from net investment hedges recorded in the foreign currency translation component of accumulated AOCL were as follows (in thousands):

		Three Months Ended
Derivatives designated	Location of gain (loss)	March 29,			March 30,
as hedging instruments	recognized on derivatives	2025			2024
Foreign exchange forward contracts	AOCL	$	(2,569	)		N/A

Gains recognized in foreign transaction loss, in the condensed consolidated statements of operations for the portion of the net investment hedges excluded from the assessment of hedge effectiveness was $0.3 million for the three-month period ended March 29, 2025.

Cash flows associated with settlements of our non-designated foreign currency forward contracts are reported in net cash used in operating activities and our net investment hedges are included in investing activities in our condensed consolidated statements of cash flows.

Fair Value

The fair value of our foreign currency forward contracts was determined based on current foreign currency exchange rates and forward points. All our foreign currency forward contracts outstanding on March 29, 2025 will mature during the fourth quarter of fiscal 2025.

The following table provides information about our foreign currency forward contracts outstanding as of March 29, 2025 (in thousands):

		Contract Amount		Contract Amount
Currency	Contract Position	(Local Currency)		(U.S. Dollars)
Euro	Buy		36,300	$	39,400
Swiss Franc	Buy		6,145		7,000
South Korean Won	Buy		2,927,800		2,000
Japanese Yen	Buy		149,340		1,000
Euro	Sell		51,174		53,400
Swiss Franc	Sell		11,825		13,200

Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs. The fair values of foreign currency contracts outstanding on March 29, 2025 and December 28, 2024 were immaterial.