DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Dec. 28, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

Derivative Financial Instruments

As of December 28, 2013, the Company had outstanding foreign currency forward contracts with a total notional amount of $68.0 million. These contract maturity dates extend through March 2017. For the three months ended December 28, 2013, the Company entered into foreign currency forward contracts of $5.2 million and settled $5.7 million of such contracts. For the three months ended December 29, 2012, the Company entered into $10.6 million of foreign currency forward contracts and settled $5.7 million of foreign currency forward contracts.

For the six months ended December 28, 2013, the Company entered into forward contracts of $10.2 million and settled $11.9 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $10.6 million and settled $11.2 million of such contracts.

Subsequent to December 28, 2013, the Company entered into $5.0 million of forward contracts that extended our hedge position through June 2017.

The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheets as of December 28, 2013 and June 29, 2013 (in thousands):

		December 28, 2013			June 29, 2013
Derivatives Designated as Hedging Instruments	Balance Sheet Location	Fair Value			Fair Value
Foreign currency forward contracts	Other current assets	$	1,561		$	760
Foreign currency forward contracts	Other long-term assets	$	1,094		$	1,669
Foreign currency forward contracts	Other current liabilities	$	(7	)	$	(145	)
Foreign currency forward contracts	Other long-term liabilities	$	(180	)	$	(289	)

The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended December 28, 2013 and December 29, 2012, respectively (in thousands):

Derivatives Designated as Hedging Instruments	AOCI Balance as of September 28, 2013			Effective Portion Recorded In AOCI			Effective Portion Reclassified From AOCI Into Cost of  Sales			AOCI Balance as of December 28, 2013
Settled foreign currency forward contracts for the three months ended December 28, 2013	$	(42	)	$	55		$	(13	)	$	—
Unsettled foreign currency forward contracts	1,101			524			—			1,625
Total	$	1,059		$	579		$	(13	)	$	1,625
Derivatives Designated as Hedging Instruments	AOCI Balance as of September 29, 2012			Effective Portion Recorded In AOCI			Effective Portion Reclassified From AOCI Into Cost of  Sales			AOCI Balance as of December 29, 2012
Settled foreign currency forward contracts for the three months ended December 29, 2012	$	57		$	10		$	(67	)	$	—
Unsettled foreign currency forward contracts	516			(152		)	—			364
Total	$	573		$	(142	)	$	(67	)	$	364

The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the six months ended December 28, 2013 and December 29, 2012, respectively (in thousands):

Derivatives Designated as Hedging Instruments	AOCI Balance as of June 29, 2013			Effective Portion Recorded In AOCI		Effective Portion Reclassified From AOCI Into Cost of  Sales			AOCI Balance as of December 28, 2013
Settled foreign currency forward contracts for the six months ended December 28, 2013	$	4		$	84	$	(88	)	$	—
Unsettled foreign currency forward contracts	1,309			316		—			1,625
Total	$	1,313		$	400	$	(88	)	$	1,625
Derivatives Designated as Hedging Instruments	AOCI Balance as of June 30, 2012			Effective Portion Recorded In AOCI		Effective Portion Reclassified From AOCI Into Cost of  Sales			AOCI Balance as of December 29, 2012
Settled foreign currency forward contracts for the six months ended December 29, 2012	$	4		$	334	$	(338	)	$	—
Unsettled foreign currency forward contracts	(663		)	1,027		—			364
Total	$	(659	)	$	1,361	$	(338	)	$	364

The Company does not enter into derivative instruments for trading or speculative purposes. The Company’s counterparties to the foreign currency forward contracts are major financial institutions. These institutions do not require collateral for the contracts and the Company believes that the risk of the counterparties failing to meet their contractual obligations is remote. As of December 28, 2013, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $1.1 million. As of December 28, 2013, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.