Note 6 - Derivative Financial Instruments

12 Months Ended

May 03, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

6. DERIVATIVE FINANCIAL INSTRUMENTS

From time to time, we enter into aluminum swap contracts to partially mitigate our exposure to changes in the cost of aluminum cans. Such financial instruments are 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 Income (Loss) (“AOCI”) 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 AOCI relative to the cash flow hedge for Fiscal 2014, Fiscal 2013 and Fiscal 2012:

	(In thousands)
	Fiscal			Fiscal			Fiscal
	2014			2013			2012
Recognized in AOCI-
Loss before income taxes	$	(1,059	)	$	(2,521	)	$	(4,484	)
Less income tax benefit		(393	)		(935	)		(1,642	)
Net		(666	)		(1,586	)		(2,842	)
Reclassified from AOCI to cost of sales-
(Loss) gain before income taxes		(2,028	)		(2,060	)		290
Less income tax (benefit) provision		(752	)		(769	)		69
Net		(1,276	)		(1,291	)		221
Net change to AOCI	$	610		$	(295	)	$	(3,063	)

As of May 3, 2014, the notional amount of our outstanding aluminum swap contracts was $2.3 million and, assuming no change in the commodity prices, $5,000 of unrealized gain before tax will be reclassified from AOCI and recognized in earnings over the next month. See Note 1.

As of May 3, 2014, the fair value of the derivative asset was $5,000, which was included in prepaid and other assets. As of April 27, 2013, the fair value of the derivative liability was $964,000, 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.