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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Jun. 29, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
As of June 29, 2019, the Company had outstanding foreign currency forward contracts and swaps with a total notional amount of $39.7 million. The maturity dates for these contracts and swaps extend through December 2020. As of June 29, 2019, the net amount of unrealized gain expected to be reclassified into earnings within the next 12 months is approximately $2.3 million. During the fiscal year ended June 29, 2019, the Company entered into $19.2 million of foreign currency forward contracts and settled $25.9 million of such contracts. During the fiscal year ended June 30, 2018, the Company entered into $13.7 million of foreign currency forward contracts and settled $28.1 million of such contracts. During the fiscal year ended July 1, 2017, the Company entered into $6.7 million of foreign currency forward contracts and settled $20.5 million of such contracts.
As of June 29, 2019, the aggregate notional amount of the Company’s outstanding foreign currency contracts and swaps along with their unrealized gains (losses) are expected to mature as summarized below (in thousands):
Quarter Ending
 
Notional Contracts and Swaps in MXN
 
Notional Contracts and Swaps in USD
 
Estimated Fair Value
September 28, 2019
 
$
148,468

 
$
6,740

 
$
942

December 28, 2019
 
$
152,613

 
$
7,187

 
$
590

March 28, 2020
 
$
146,613

 
$
6,553

 
$
803

June 27, 2020
 
$
138,213

 
$
6,257

 
$
577

September 26, 2020
 
$
141,173

 
$
6,729

 
$
163

December 26, 2020
 
$
132,773

 
$
6,241

 
$
157


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. The 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. As of June 29, 2019 and June 30, 2018, the remaining notional balance of this swap was $2.5 million and $8.5 million, respectively.
The following table summarizes the fair value of derivative instruments in the Consolidated Balance Sheets as of June 29, 2019 and June 30, 2018 (in thousands):
 
 
 
 
June 29, 2019
 
June 30, 2018
Derivatives Designated as Hedging Instruments
 
Balance Sheet Location
 
Fair Value
 
Fair Value
Foreign currency forward contracts & swaps
 
Other current assets
 
$
2,912

 
$
23

Foreign currency forward contracts & swaps
 
Other long-term assets
 
$
320

 
$
477

Foreign currency forward contracts & swaps
 
Other current liabilities
 
$
—

 
$
(1,618
)
Foreign currency forward contracts & swaps
 
Other long-term liabilities
 
$
—

 
$
(58
)
Interest rate swaps
 
Other current assets
 
$
2

 
$
20

Interest rate swaps
 
Other long-term assets
 
$
—

 
$
4


The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2019 (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
June 30, 2018
 
Effective
Portion
Recorded In
AOCI
 
Effective Portion
Reclassified From
AOCI Into Income
 
AOCI Balance
as of
June 29, 2019
Forward contracts & swaps
Cost of sales
 
$
(988
)
 
$
3,332

 
$
80

 
$
2,424

Interest rate swap
Interest expense
 
19

 
2

 
(19
)
 
2

Total
 
 
$
(969
)
 
$
3,334

 
$
61

 
$
2,426

The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2018 (in thousands):
Derivatives Designated as Hedging Instruments
Classification of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
AOCI Balance
as of
July 1, 2017
 
Effective
Portion
Recorded In
AOCI
 
Tax Rate Effect Reclassification
 
Effective Portion
Reclassified From
AOCI Into Income
 
AOCI Balance
as of
June 30, 2018
Forward contracts & swaps
Cost of sales
 
$
(2,707
)
 
$
(1,942
)
 
$
(583
)
 
$
4,244

 
$
(988
)
Interest rate swap
Interest expense
 
(68
)
 
20

 
(3
)
 
70

 
19

Total
 
 
$
(2,775
)
 
$
(1,922
)
 
$
(586
)
 
$
4,314

 
$
(969
)
The following table summarizes the gain (loss) on derivative instruments, net of tax, on the Consolidated Statements of Income for the fiscal year 2017 (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
July 1, 2017
Forward contracts & swaps
Cost of sales
 
$
(7,245
)
 
$
(600
)
 
$
5,138

 
$
(2,707
)
Interest rate swap
Interest expense
 
(328
)
 
14

 
246

 
(68
)
Total
 
 
$
(7,573
)
 
$
(586
)
 
$
5,384

 
$
(2,775
)

As of June 29, 2019, 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.