Note 5 - Derivative Financial Instruments

6 Months Ended

Oct. 26, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

5. DERIVATIVE FINANCIAL INSTRUMENTS

We have entered into various aluminum swap contracts to partially mitigate our exposure to changes in the cost of aluminum cans through April 2014. The financial instruments were designated and accounted for as a cash flow hedge. Accordingly, gains or losses attributable to the effective portion of the cash flow hedge are reported in Accumulated Other Comprehensive Loss (“AOCL”) and reclassified into earnings through cost of sales in the period in which the hedged transaction affects earnings. The ineffective portion of the change in fair value of our cash flow hedge was immaterial. The following summarizes the gains (losses) recognized in the Consolidated Statements of Income and Comprehensive Income relative to cash flow hedges for the three and six months ended October 26, 2013 and October 27, 2012:

	(In thousands)
	Three Months Ended						Six Months Ended
	2013			2012			2013			2012
Recognized in AOCI:
Gain (loss) before income taxes	$	(139	)	$	175		$	(1,151	)	$	(2,143	)
Less income tax provision (benefit)		(51	)		86			(427	)		(795	)
Net	$	(88	)	$	89		$	(724	)	$	(1,348	)
Reclassified from AOCI to cost of sales:
Loss before income taxes	$	(650	)	$	(644	)	$	(1,216	)	$	(1,546	)
Less income tax benefit		(241	)		(235	)		(451	)		(578	)
Net	$	(409	)	$	(409	)	$	(765	)	$	(968	)
Net change to AOCI	$	321		$	498		$	41		$	(380	)

As of October 26, 2013, the notional amount of our outstanding aluminum swap contracts was $14.2 million and, assuming no change in the commodity prices, $899,000 of unrealized loss before tax will be reclassified from AOCL and recognized in cost of sales over the next six months. See Note 1.

As of October 26, 2013 and April 27, 2013, the fair value of the derivative liability was $899,000 and $964,000, respectively, which was included in accrued liabilities. Such valuation does not entail a significant amount of judgment and the inputs that are significant to the fair value measurement are Level 2 as defined by the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.