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DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative Financial Instruments
As of December 31, 2016, the Company had outstanding foreign currency forward contracts and swaps with a total notional amount of $65.9 million. The maturity dates for these contracts and swaps extend through September 2019. For the three months ended December 31, 2016, the Company entered into foreign currency forward contracts of $6.7 million and settled $5.0 million of such contracts. During the same period of the previous year, the Company did not enter into any foreign currency forward contracts and settled $5.2 million of such contracts.
For the six months ended December 31, 2016, the Company entered into foreign currency forward contracts of $6.7 million and settled $10.2 million of such contracts. During the same period of the previous year, the Company entered into foreign currency forward contracts of $12.0 million and settled $10.6 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. 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 term loan. 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 December 31, 2016 and July 2, 2016 (in thousands):
 
 
 
December 31, 2016
 
July 2, 2016
Derivatives Designated as Hedging Instruments
Balance Sheet Location
 
Fair Value
 
Fair Value
Foreign currency forward contracts & swaps
Other long-term assets
 
$
—

 
$
136

Foreign currency forward contracts & swaps
Other current liabilities
 
$
(7,045
)
 
$
(4,670
)
Foreign currency forward contracts & swaps
Other long-term liabilities
 
$
(7,654
)
 
$
(6,442
)
Interest rate swap
Other current liabilities
 
$
(161
)
 
$
(264
)
Interest rate swap
Other long-term liabilities
 
$
(47
)
 
$
(234
)


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 31, 2016 and December 26, 2015, respectively (in thousands):
 
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
October 1, 2016
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Income
 
AOCI Balance
as of
December 31, 2016
Forward contracts & swaps
Cost of sales
 
$
(8,325
)
 
$
(2,717
)
 
$
1,341

 
$
(9,701
)
Interest rate swap
Interest expense
 
(248
)
 
42

 
68

 
(138
)
Total
 
 
$
(8,573
)
 
$
(2,675
)
 
$
1,409

 
$
(9,839
)
 
 
 
 
 
 
 
 
 
 
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
September 26, 2015
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Income
 
AOCI Balance
as of
December 26, 2015
Forward contracts & swaps
Cost of sales
 
$
(7,336
)
 
$
(357
)
 
$
924

 
$
(6,769
)
Interest rate swap
Interest expense
 
(407
)
 
5

 
115

 
(287
)
Total
 
 
$
(7,743
)
 
$
(352
)
 
$
1,039

 
$
(7,056
)

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 31, 2016 and December 26, 2015, respectively (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
July 2, 2016
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into
Income
 
AOCI Balance
as of
December 31, 2016
Forward contracts & swaps
Cost of sales
 
$
(7,245
)
 
$
(4,906
)
 
$
2,450

 
$
(9,701
)
Interest rate swap
Interest expense
 
(328
)
 
41

 
149

 
(138
)
Total
 
 
$
(7,573
)
 
$
(4,865
)
 
$
2,599

 
$
(9,839
)
 
 
 
 
 
 
 
 
 
 
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
December 26, 2015
Forward contracts & swaps
Cost of sales
 
$
(4,487
)
 
$
(3,890
)
 
$
1,608

 
$
(6,769
)
Interest rate swap
Interest expense
 
(276
)
 
(126
)
 
115

 
(287
)
Total
 
 
$
(4,763
)
 
$
(4,016
)
 
$
1,723

 
$
(7,056
)

As of December 31, 2016, the net amount of unrealized loss expected to be reclassified into earnings within the next 12 months is approximately $4.8 million. As of December 31, 2016, the Company does not have any foreign exchange contracts with credit-risk-related contingent features.