Note 5 - Derivative Financial Instruments

9 Months Ended

Jan. 25, 2014

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 nine months ended January 25, 2014 and January 26, 2013:

	(In thousands)
	Three Months Ended					Nine Months Ended
	2014			2013		2014			2013
Recognized in AOCL:
Gain (loss) before income taxes	$	(53	)	$	735	$	(1,203	)	$	(1,408	)
Less income tax provision (benefit)		(20	)		272		(447	)		(523	)
Net	$	(33	)	$	463	$	(756	)	$	(885	)

Reclassified from AOCL to cost of sales:
Loss before income taxes	$	(596	)	$	(242	)	$	(1,811	)	$	(1,788	)
Less income tax benefit		(221	)		(90	)		(672	)		(668	)
Net	$	(375	)	$	(152	)	$	(1,139	)	$	(1,120	)
Net change to AOCL	$	342		$	615		$	383		$	235

As of January 25, 2014, the notional amount of our outstanding aluminum swap contracts was $8.2 million and, assuming no change in the commodity prices, $356,000 of unrealized loss before tax will be reclassified from AOCL and recognized in cost of sales over the next three months. See Note 1.

As of January 25, 2014 and April 27, 2013, the fair value of the derivative liability was $356,000 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.