Derivative Instruments and Hedging Activities

9 Months Ended

Mar. 29, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company may utilize from time to time derivative financial instruments to manage exposure to certain risks related to its ongoing operations. The primary risk managed through the use of derivative instruments is interest rate risk. In January 2011, the Company entered into an interest rate contract with an initial notional amount of $15,000 to hedge the changes in cash flows attributable to changes in the LIBOR rate associated with the five-year term loan entered into by the Company in March 2011. Under this interest rate contract, the Company pays a fixed interest rate of 3.94% and receives a variable rate based on LIBOR plus 1.85%. The notional amount of this interest rate contract is required to be 50% of the amount of the term loan through the expiration of its five-year term.

The Company is exposed to counter-party credit risk on any derivative instrument. Accordingly, as part of its risk management policy, the Company maintains strict counter-party credit guidelines and enters into any derivative instrument only with a major financial institution. The Company does not have significant exposure to any counterparty, and management believes the risk of loss is remote and, in any event, would not be material.

Refer to “Note 2—Fair Value of Financial Instruments” for additional information regarding the fair value of the derivative instrument.

The following table summarizes the fair value of the Company’s derivative instrument and the line item in which it was recorded in the condensed consolidated balance sheets at March 29, 2014 and June 29, 2013:

		Liability Derivative at Fair Value
	Balance Sheet Location	March 29, 2014		June 29, 2013
Derivative designated as hedging instrument:
Interest rate contract	Accrued expenses	$	133	$	156
	Accrued retirement costs and other	76		145
		$	209	$	301

Cash Flow Hedges

The following table summarizes the pre-tax loss recognized in other comprehensive income (“OCI”) and the pre-tax loss reclassified from accumulated OCI into earnings for the derivative instrument designated as a cash flow hedge during the third quarter and the nine-month period of fiscal 2014 and the third quarter and the nine-month period of fiscal 2013:

	Gross Loss Recognized in OCI (Effective Portion)		Location of Loss Reclassified from Accumulated OCI (Effective Portion)	Loss Reclassified from Accumulated OCI (Effective Portion)		Location of Loss (Ineffective Portion) and Excluded  from Effectiveness Testing	Loss (Ineffective Portion) and Excluded from Effectiveness Testing
For the third quarter of fiscal 2014:
Interest rate contract	$	35	Interest expense	$	42	Interest expense	$	—
For the nine-month period of fiscal 2014:
Interest rate contract	$	92	Interest expense	$	136	Interest expense	$	—
For the third quarter of fiscal 2013:
Interest rate contract	$	5	Interest expense	$	51	Interest expense	$	—
For the nine-month period of fiscal 2013:
Interest rate contract	$	60	Interest expense	$	162	Interest expense	$	—

The estimated net amount of the loss in accumulated OCI at March 29, 2014, expected to be reclassified into the consolidated statement of income within the next twelve months is $133.