Derivative Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Note 17.  Derivative Financial Instruments

The Company is exposed to certain risks related to its ongoing business operations. The primary risk managed by using derivative instruments is foreign currency risk.  From time to time, the Company’s foreign subsidiaries enter into foreign currency exchange contracts to mitigate exposure to fluctuations in currency exchange rates.  The fair value of the derivative financial instruments is recorded on the Company’s unaudited condensed consolidated balance sheet and is adjusted to fair value at each measurement date.  The changes in fair value are recognized in the accompanying unaudited condensed consolidated statements of operations in the current period.  The Company does not engage in speculative transactions nor does it hold or issue financial instruments for trading purposes.  The average U.S. dollar equivalent notional amount of outstanding foreign currency exchange contracts was $9,608 during the nine-month period ended September 30, 2019. The Company reported $443 and $333 of derivative assets in other current assets at September 30, 2019 and  December 31, 2018, respectively.  The Company recognized, as a component of cost of sales,  net gains of $369 and $169 on the changes in fair value of derivative financial instruments in the three-month periods ended September 30, 2019 and 2018, respectively.  The Company recognized, as a component of cost of sales, net gains of $355 and $855 on the changes in fair value of derivative financial instruments in the nine-month periods ended September 30, 2019 and 2018, respectively.  There were no derivatives that were designated as hedges at September 30, 2019.