Derivative Financial Instruments

6 Months Ended

Jun. 30, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

As part of our currency exchange rate risk management strategy, we enter into certain derivative foreign currency forward contracts that do not meet the U.S. GAAP criteria for hedge accounting, but have the impact of partially offsetting certain foreign currency exposures. We account for these forward contracts at fair value and report the related gains or losses in currency exchange losses, net, in the unaudited Condensed Consolidated Statements of Income. The notional amount of open forward contracts not designated as hedging instruments was $122.2 million and $113.4 million at June 30, 2026, and December 31, 2025, respectively.

We also use derivative foreign currency forward contracts to manage exposure to foreign exchange currency risks arising from forecasted transactions. These instruments meet the U.S. GAAP criteria for hedge accounting and are accounted for under ASC 815, Derivatives and Hedging. For hedges of forecasted transactions, significant characteristics and expected terms of a forecasted transaction are specifically identified, and it is probable that each forecasted transaction will occur. If it is deemed probable the forecasted transaction will not occur, then the gain or loss would be recognized immediately into net income. At June 30, 2026, and December 31, 2025, the notional amount of open foreign currency exchange forward contracts designated as cash flow hedges was $15.8 million and $31.6 million, respectively. See Note 7—Reclassifications Out of Accumulated Other Comprehensive Loss for information on unrealized loss deferred in Accumulated other comprehensive loss until the transactions related to these cash flow hedges affect earnings. Fair values of these contracts are derived using quoted forward foreign exchange prices to interpolate values of outstanding trades at the reporting date based on their maturities. All open foreign currency exchange forward contracts designated as cash flow hedges outstanding at June 30, 2026, will mature by December 2026.

The following table presents the unaudited Condensed Consolidated Balance Sheets location and fair value of assets and liabilities associated with derivative financial instruments:

(In thousands)	June 30, 2026		December 31, 2025
Derivatives not designated as hedging instruments:
Foreign exchange contracts: prepaid expenses and other current assets	$	909	$	—
Foreign exchange contracts: other current liabilities	653		392
Derivatives designated as cash flow hedges:
Foreign exchange contracts: prepaid expenses and other current assets	$	175	$	105
Foreign exchange contracts: other current liabilities	468		320

The following table presents the amount and classification of the net (gain) associated with derivative financial instruments within the unaudited Condensed Consolidated Statements of Income and unaudited Condensed Consolidated Statements of Cash Flows:

	Six Months Ended June 30,
(In thousands)	2026		2025
Derivatives not designated as hedging instruments:
Foreign exchange contracts: currency exchange losses, net	$	(879)	$	(4,432)
Derivatives designated as cash flow hedges:
Foreign exchange contracts: cost of products sold	$	(33)	$	—