Note 4 - Derivative Financial Instruments

12 Months Ended

Feb. 01, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

4.            Derivative financial instruments

Foreign exchange contracts are recognized either as assets or as liabilities on the balance sheet at fair value at the end of each reporting period.  Changes in fair value of the derivatives are recorded as operating expenses or other income (expense) or as accumulated other comprehensive income, or OCI.

We currently use and expect to continue to use foreign currency derivatives such as forward and option contracts as hedges against certain anticipated transactions denominated in Israeli shekels, or NIS. Beginning in the first quarter of fiscal 2012, we elected to discontinue assessing new derivative contracts that are used in managing NIS denominated transactions for hedge effectiveness and thus such contracts do not qualify for hedge accounting.  As a result of this change, we recognize all gains and losses from changes in the fair value of these derivate contracts immediately into earnings rather than deferring any such amounts in OCI. For hedge transactions entered into prior to January 31, 2011, which continued to be effective, the gains and losses incurred prior to January 30, 2011 continued to be recorded in OCI and were reclassified into earnings when those hedge transactions matured in fiscal 2012.

All existing foreign exchange transactions were entered into subsequent to January 29, 2011, and are treated as foreign exchange contracts not designated as cash flow hedges.  

In fiscal 2014, 2013 and 2012, we recognized a loss of $0.4 million and gains of $0.4 million and $0.2 million, respectively, as a result of foreign exchange contracts.  As of February 1, 2014, we had foreign exchange contracts to sell up to approximately $0.9 million for a total amount of approximately NIS 3.3 million, that mature on or before April 28, 2014.  As of February 2, 2013, we had foreign exchange contracts to sell up to approximately $10.4 million for a total amount of approximately NIS 42.3 million, that matured on or before December 23, 2013.

The following table presents the fair value of our outstanding derivative instruments (in thousands):

Derivative Assets	Balance Sheet Location	February 1, 2014		February 2, 2013
Foreign exchange contracts not designated as cash flow hedges	Prepaid expenses and other current assets	$	35	$	438
Total fair value of derivative instruments		$	35	$	438

The effects of derivative instruments on income and accumulated other comprehensive income for fiscal 2014, 2013 and 2012 are summarized below (in thousands):

	Gains (Losses) Recognized in Accumulated Other Comprehensive Income on Derivatives (Effective Portion)		Gains Reclassified from Accumulated Other Comprehensive Income into Earnings			Gains (Losses) Recognized in Earnings on Derivatives (Including Ineffective Portion)
Derivatives instruments	Amount		Amount		Location	Amount			Location
Fiscal 2014 foreign exchange contracts	$	-	$	-	Operating expenses and cost of revenue	$	(403	)	Interest and other income, net
Fiscal 2013 foreign exchange contracts	$	-	$	-	Operating expenses and cost of revenue	$	447		Interest and other income, net
Fiscal 2012 foreign exchange contracts	$	-	$	85	Operating expenses and cost of revenue	$	153		Interest and other income, net