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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Jul. 02, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS
As of July 2, 2016, the Company had outstanding foreign currency forward contracts of $69.4 million. These contract maturity dates extend through June 2019. As of July 2, 2016, the net amount of unrealized loss expected to be reclassified into earnings within the next 12 months is approximately $3.3 million. During the fiscal year ended July 2, 2016, the Company entered into $25.9 million of foreign currency forward contracts and settled $21.5 million of such contracts. During the fiscal year ended June 27, 2015, the Company entered into $23.1 million of foreign currency forward contracts and settled $20.5 million of such contracts. During the fiscal year ended June 28, 2014, the Company entered into $15.2 million of foreign currency forward contracts and settled $22.5 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. As of July 2, 2016 and June 27, 2015, the remaining notional balance of this swap was $20.5 million and $25.0 million, respectively. 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 Sheets as of July 2, 2016 and June 27, 2015 (in thousands):
 
 
 
 
July 2, 2016
 
June 27, 2015
Derivatives Designated as Hedging Instruments
 
Balance Sheet Location
 
Fair Value
 
Fair Value
Foreign currency forward contracts
 
Other long-term assets
 
$
136

 
$
—

Foreign currency forward contracts
 
Other current liabilities
 
$
(4,670
)
 
$
(2,517
)
Foreign currency forward contracts
 
Other long-term liabilities
 
$
(6,442
)
 
$
(4,282
)
Interest rate swaps
 
Other long-term assets
 
$
—

 
$
25

Interest rate swaps
 
Other current liabilities
 
$
(264
)
 
$
(271
)
Interest rate swaps
 
Other long-term liabilities
 
$
(234
)
 
$
(172
)

The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2016 (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
June 27, 2015
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into Income
 
AOCI Balance
as of
July 2, 2016
Forward contracts
Cost of sales
 
$
(4,487
)
 
$
(6,939
)
 
$
4,181

 
$
(7,245
)
Interest rate swap
Interest expense
 
(276
)
 
(348
)
 
296

 
(328
)
Total
 
 
$
(4,763
)
 
$
(7,287
)
 
$
4,477

 
$
(7,573
)
The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2015 (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
June 28, 2014
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into Income
 
AOCI Balance
as of
June 27, 2015
Forward contracts
Cost of sales
 
$
2,403

 
$
(7,208
)
 
$
318

 
$
(4,487
)
Interest rate swap
Interest expense
 
—

 
(276
)
 
—

 
(276
)
Total
 
 
$
2,403

 
$
(7,484
)
 
$
318

 
$
(4,763
)
The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2014 (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
June 29, 2013
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into Income
 
AOCI Balance
as of
June 28, 2014
Forward contracts
Cost of sales
 
$
1,313

 
$
1,915

 
$
(825
)
 
$
2,403


As of July 2, 2016, the Company does not have any foreign exchange contracts with credit-risk-related contingent features. The Company is subject to the risk of fluctuating interest rates from our line of credit and foreign currency risk resulting from our China operations. The Company does not currently manage these risk exposures by using derivative instruments.