Derivative Instruments

3 Months Ended

Mar. 30, 2013

Derivative Instrument Detail [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

We are exposed to certain risks relating to our ongoing business operations. We use derivative instruments to manage interest rate and foreign exchange risks.

The fair value of the derivative instrument liability in the Condensed Consolidated Balance Sheets using Level 2 inputs was as follows:

(in thousands)	Balance Sheet Location	March 30, 2013			December 29, 2012
Interest rate swaps	Other payables and accrued liabilities	$	(7	)	$	(15	)
Interest rate swaps	Other noncurrent liabilities	(1,429		)	(1,575		)
Foreign currency forwards	Other payables and accrued liabilities	(119		)	—
Total fair value of derivative instruments		$	(1,555	)	$	(1,590	)

Interest Rate Swaps

Our variable-rate debt obligations incur interest at floating rates based on changes in the Eurodollar rate and U.S. base rate interest. To manage exposure to changing interest rates, we selectively enter into interest rate swap agreements to maintain a desirable proportion of fixed to variable-rate debt. The fair value of interest rate swaps is determined utilizing a market approach model using the notional amount of the interest rate swaps and the observable inputs of time to maturity and interest rates. The notional amount of the interest rate swaps designated as hedging instruments as of March 30, 2013, and December 29, 2012, was $53.7 million and $54.3 million, respectively.

Foreign Currency Forwards

We have exposure to foreign exchange rate fluctuations through the operations of our Canadian subsidiary. A majority of the revenue of our Canadian operations is denominated in U.S. dollars and a substantial portion of its costs, such as raw materials and labor costs, are denominated in Canadian dollars. We enter into derivative forward contracts to mitigate a portion of this foreign exchange rate exposure. These contracts have maturities through December 2013. The notional amount for foreign currency forwards was $16.5 million as of March 30, 2013. There were no contracts outstanding at December 29, 2012.

The changes in unrealized (losses)/gains, net of income tax, included in other comprehensive income due to fluctuations in interest rates and foreign exchange rates for the quarters ended March 30, 2013, and March 31, 2012 were as follows:

	Quarter Ended
(in thousands)	March 30, 2013			March 31, 2012
Interest rate swaps, net of income tax (expense)/benefit of ($43) and $23, respectively	$	69		$	(37	)
Foreign currency forwards, net of income tax benefit/(expense) of $37 and ($78), respectively	(82		)	171
Total change in unrealized (losses)/gains from derivative instruments, net of income tax (effective portion)	$	(13	)	$	134