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DERIVATIVE FINANCIAL INSTRUMENTS
 3 Months Ended
Sep. 26, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative Financial Instruments
As of September 26, 2015, the Company had outstanding foreign currency forward contracts with a total notional amount of $71.7 million. The maturity dates for these contracts extend through December 2018. For the three months ended September 26, 2015, the Company entered into foreign currency forward contracts of $12.0 million and settled $5.4 million of such contracts. During the same period of the previous year, the Company entered into $11.6 million of foreign currency forward contracts and settled $5.3 million of such contracts.
On October 1, 2014, the Company entered into an interest rate swap contract with an effective date of September 1, 2015 and a termination date of September 3, 2019, with a notional amount of $25.0 million related to the borrowings outstanding under the term loan and line of credit. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counter party a fixed interest rate. The fixed interest rate for the contract is 1.97% that replaces the one month LIBOR rate component of our contractual interest to be paid to WFB as part of our debt facilities. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the term loan, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge.
The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheet as of September 26, 2015 and June 27, 2015 (in thousands):
 
 
 
September 26, 2015
 
June 27, 2015
Derivatives Designated as Hedging Instruments
Balance Sheet Location
 
Fair Value
 
Fair Value
Foreign currency forward contracts
Other current liabilities
 
$
(3,962
)
 
$
(2,517
)
Foreign currency forward contracts
Other long-term liabilities
 
$
(7,153
)
 
$
(4,282
)
Interest rate swaps
Other long-term assets
 
$
—

 
$
25

Interest rate swaps
Other current liabilities
 
$
(368
)
 
$
(271
)
Interest rate swaps
Other long-term liabilities
 
$
(248
)
 
$
(172
)


The following tables summarize the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the three months ended September 26, 2015 and September 27, 2014 (in thousands):
 
Derivatives Designated as Hedging Instruments
AOCI Balance
as of
June 27, 2015
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Cost of  Sales
 
AOCI Balance
as of
September 26, 2015
Settled foreign currency forward contracts for the three months ended September 26, 2015
$
(311
)
 
$
995

 
$
(684
)
 
$
—

Unsettled foreign currency forward contracts
(4,176
)
 
(3,160
)
 
—

 
(7,336
)
Unsettled interest rate swaps
(276
)
 
(131
)
 
—

 
(407
)
Total
$
(4,763
)
 
$
(2,296
)
 
$
(684
)
 
$
(7,743
)
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments
AOCI Balance
as of
June 28, 2014
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Cost of  Sales
 
AOCI Balance
as of
September 27, 2014
Settled foreign currency forward contracts for the three months ended September 27, 2014
$
386

 
$
158

 
$
(544
)
 
$
—

Unsettled foreign currency forward contracts
2,017

 
(1,350
)
 
—

 
667

Total
$
2,403

 
$
(1,192
)
 
$
(544
)
 
$
667


 
 
 
 
 
 
 
 

The Company does not enter into derivative instruments for trading or speculative purposes. The Company’s counterparties to the foreign currency forward contracts and interest rate swaps 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 September 26, 2015, the net amount of unrealized loss expected to be reclassified into earnings within the next 12 months is approximately $2.9 million. As of September 26, 2015, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.