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DERIVATIVE INSTRUMENTS
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
Interest Rate Hedging
The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of the Company’s expected SOFR-indexed borrowings. Additionally, the Company entered into a basis swap where the Company receives Term SOFR and pays daily compounded SOFR to convert the portfolio of swaps from daily compounded SOFR to Term SOFR.
The Company held the following interest rate swaps as of June 30, 2025 and December 31, 2024 (dollar amounts in thousands):
June 30, 2025December 31, 2024June 30, 2025December 31, 2024
Hedged ItemNotional AmountDesignation DateEffective DateTermination DateFixed Interest RateEstimated Fair Value
Asset (Liability)
1-month Term SOFR Loan— 75,000 October 10, 2018July 1, 2020June 30, 20253.220 %— 421 
1-month Term SOFR Loan— 75,000 October 10, 2018July 1, 2020June 30, 20253.199 %— 502 
1-month Term SOFR Loan— 75,000 October 10, 2018July 1, 2020June 30, 20253.209 %— 403 
1-month Term SOFR Loan100,000 100,000 December 18, 2018December 30, 2022December 31, 20272.885 %1,523 3,406 
1-month Term SOFR Loan100,000 100,000 December 18, 2018December 30, 2022December 31, 20272.867 %1,549 3,507 
1-month Term SOFR Loan575,000 575,000 December 15, 2020July 31, 2025December 31, 20271.415 %27,632 34,537 
1-month Term SOFR Loan125,000 125,000 December 15, 2020July 1, 2025December 31, 20271.404 %6,307 7,848 
Basis Swap (1)
—— March 31, 2023March 24, 2023December 31, 2027N/A(1,960)(1,829)
$900,000 $1,125,000 $35,051 $48,795 
(1) The notional of the basis swap amortizes to match the total notional of the interest rate swap portfolio over time
The interest rate swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in accumulated other comprehensive income (“AOCI”). For the three and six months ended June 30, 2025, the Company recorded losses of $(3.4) million and $(10.9) million, respectively, in AOCI related to the change in fair value of the interest rate swaps. For the three and six months ended June 30, 2024, the Company recorded gains of $5.1 million and $19.8 million, respectively, in AOCI related to the change in fair value of the interest rate swaps.
For the three and six months ended June 30, 2025, the Company recorded gains of $1.4 million and of $2.9 million, respectively, in the consolidated statements of operations related to the interest rate differential of the interest rate swaps. For the three and six months ended June 30, 2024, the Company recorded gains of $5.0 million and $10.3 million, respectively, in the consolidated statements of operations related to the interest rate differential of the interest rate swaps. The estimated gain that is expected to be reclassified to interest income from AOCI as of June 30, 2025 within the next twelve months is $17.3 million.
The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in AOCI, net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCI to interest expense at that time.
Foreign Currency Hedging
From time to time, the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCI, net of tax. Those amounts are subsequently reclassified to earnings from AOCI as impacted by the hedged item when the hedged item affects earnings. If the hedged forecasted transaction does not occur or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.
The success of the Company’s hedging anticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows.
Cross-Currency Rate Swaps
The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate. Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss francs (“CHFs”) and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in CHFs and receive U.S. dollars from the counterparties.
In December 2020, the Company entered into cross-currency swap agreements to convert a notional amount of $471.6 million equivalent to 420.1 million of a CHF-denominated intercompany loan into U.S. dollars. The CHF-denominated intercompany loan was the result of an intra-entity transfer of certain intellectual property rights to a subsidiary in Switzerland completed during the fourth quarter of 2020. The intercompany loan requires quarterly principal payments of CHF 5.8 million plus accrued interest. As a result, the aggregate notional amount of the related cross-currency swaps will decrease by a corresponding amount.
In February 2025, the Company amended the CHF-denominated intercompany loan to extend the maturity to December 2030. Concurrently, the Company amended the cross-currency swap agreement, with a notional amount of $368.4 million, equivalent to CHF 328.1 million, to extend the maturity to December 2030.
The Company held the following cross-currency rate swaps as of June 30, 2025 and December 31, 2024 (dollar amounts in thousands):
June 30, 2025December 31, 2024June 30, 2025December 31, 2024
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value
Asset (Liability)
Pay CHFDecember 21, 2020February 19, 20253.00%CHF— 328,136 — (4,367)
Receive U.S.$3.98%$— 368,362 
Pay CHFFebruary 20, 2025December 20, 20303.25%CHF316,637 — (60,936)— 
Receive U.S.$6.14%$355,452 — 
Total$(60,936)$(4,367)
The cross-currency swaps designated as cash flow hedges are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCI. For the three and six months ended June 30, 2025, the Company recorded losses of $(39.5) million and $(49.5) million, respectively, in AOCI related to change in fair value of the cross-currency swaps. For the three and six months ended June 30, 2024, the Company recorded gains of $0.6 million and $30.1 million, respectively, in AOCI related to change in fair value of the cross-currency swaps.
For the three and six months ended June 30, 2025, the Company recorded losses of $(40.6) million and $(49.8) million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains and losses, respectively, recognized on the intercompany loans. For the three and six months ended June 30, 2024, the Company recorded gains of $1.5 million and $28.6 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains and losses, respectively, recognized on the intercompany loans.
For the three and six months ended June 30, 2025, the Company recorded gains of $2.3 million and $3.5 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps. For the three and six months ended June 30, 2024, the Company recorded gains of $1.3 million and $2.6 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
The estimated gain that is expected to be reclassified to other income (expense), net from AOCI as of June 30, 2025 within the next twelve months is $5.2 million. As of June 30, 2025, the Company does not expect any gains or losses will be reclassified into earnings because the original forecasted transactions will not occur.
Net Investment Hedges
The Company manages certain foreign exchange risks through a variety of strategies, including hedging. The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business.
In February 2025, the Company entered into a cross-currency swap agreement with a notional amount of CHF 67.8 million equivalent to $75.0 million, where the Company agreed with third-parties to sell CHF in exchange for U.S. dollars at a specified rate at the maturity of the contract. The new cross-currency swap agreement was designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries.
On July 25, 2025, the Company entered into a cross-currency swap agreement with a notional amount of CHF 59.7 million, equivalent to $75.0 million, to be designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries.
The Company held the following cross-currency rate swaps designated as net investment hedges as of June 30, 2025 and December 31, 2024, respectively (dollar amounts in thousands):
June 30, 2025December 31, 2024June 30, 2025December 31, 2024
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value
Asset (Liability)
Pay EUROctober 3, 2018September 30, 2025—%EUR38,820 38,820 (726)4,827 
Receive U.S.$2.19%$45,000 45,000 
Pay CHFMay 26, 2022December 16, 2028—%CHF240,175 240,175 (60,327)(27,951)
Receive U.S.$1.94%$250,000 250,000 
Pay CHFNovember 17, 2023December 17, 2029—%CHF66,525 66,525 (11,367)(3,248)
Receive U.S.$2.54%$75,000 75,000 
Pay CHFMay 6, 2024December 18, 2030—%CHF68,483 68,483 (13,273)(4,741)
Receive U.S.$2.74%$75,000 75,000 
Pay CHFFebruary 21, 2025December 15, 2031—%CHF67,800 — (10,461)— 
Receive U.S.$3.24%$75,000 — 
Total$(96,154)$(31,113)
The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCI. For the three and six months ended June 30, 2025, the Company recorded losses of $(55.9) million and $(59.3) million, respectively, in AOCI related to the change in fair value of the cross-currency swaps. For the three and six months ended June 30, 2024, the Company recorded a loss of $(4.2) million and a gain of $20.7 million, respectively, in AOCI related to the change in fair value of the cross-currency swaps.
For the three and six months ended June 30, 2025, the Company recorded gains of $3.1 million and $5.7 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps. For the three and six months ended June 30, 2024, the Company recorded gains of $2.5 million and $4.7 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
The estimated gain that is expected to be reclassified to interest income from AOCI as of June 30, 2025 within the next twelve months is $9.6 million.
Foreign Currency Forward Contracts
The Company has entered into forward contracts designated as cash flow hedges for forecasted purchases in foreign currencies, primarily CHF denominated intercompany purchases. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in accumulated comprehensive loss. These changes in fair value will be recognized into earnings as a component of cost of sales when the forecasted-transaction occurs. These contracts typically settle at various dates within twelve months of execution. As of June 30, 2025 the notional amount of foreign currency forward contracts was CHF 14.4 million.
For the three and six months ended June 30, 2025, the Company recorded gains of $1.7 million and $2.1 million, respectively, in AOCI related to the change in fair value of the foreign currency forward contracts. For the three and six months ended June 30, 2024, the Company recorded an immaterial loss and a loss of $(0.6) million, respectively, in AOCI related to the change in fair value of the foreign currency forward contracts.
For the three and six months ended June 30, 2025, the Company recorded losses of $(0.5) million and $(0.4) million, respectively, in other income and cost of goods sold included in the consolidated statements of operations related to the amortization of forward points and rate translation on the foreign currency forward contracts. For the three and six months ended June 30, 2024, the Company recorded losses of $(0.1) million and $(0.2) million, respectively, in other income and cost of goods sold included in the consolidated statements of operations related to the amortization of forward points and rate translation on the foreign currency forward contracts.
On July 30, 2025, the Company entered into forward currency forwards with a notional amount of CHF 6.0 million to mitigate the exchange rate risk of Swiss franc denominated intercompany purchases. These contracts settle at various dates within twelve months of execution.
Counterparty Credit Risk
The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency.
Fair Value of Derivative Instruments
The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair values of the interest rate swaps and cross-currency swaps were developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk.
The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024:
Fair Value as of
Location on Balance Sheet (1):
June 30, 2025December 31, 2024
Dollars in thousands
Derivatives designated as hedges — Assets:
Prepaid expenses and other current assets
Cash Flow Hedges
Interest rate swap
$18,509 $12,320 
Cross-currency swap3,411 — 
Foreign currency forward contracts1,181 — 
Net Investment Hedges
Cross-currency swap5,444 8,605 
Other assets
Cash Flow Hedges
Interest rate swap18,502 38,302 
Total derivatives designated as hedges — Assets$47,047 $59,227 
Derivatives designated as hedges — Liabilities:
Accrued expenses and other current liabilities
Cash Flow Hedges
Interest rate swap$1,175 $684 
Cross-currency swap— 4,367 
Foreign currency forward contracts— 914 
Net Investment Hedges
Cross-currency swap8,115 210 
Other liabilities
Cash Flow Hedges
Interest rate swap785 1,145 
Cross-currency swap64,347 — 
Net Investment Hedges
Cross-currency swap93,483 39,507 
Total derivatives designated as hedges — Liabilities$167,905 $46,827 
(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.
The following presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the accompanying condensed consolidated statement of operations during the three and six months ended June 30, 2025 and 2024:
Dollars in thousandsBalance in AOCI
Beginning of
Quarter		Amount of
Gain (Loss)
Recognized in
AOCI		Amount of Gain (Loss)
Reclassified from
AOCI into
Earnings		Balance in AOCI
End of Quarter		Location in
Statements of
Operations
Three Months Ended June 30, 2025
Cash Flow Hedges
Interest rate swap$39,905 $(3,420)$1,434 $35,051 Interest expense
Cross-currency swap(13,423)(39,505)(38,161)(14,767)Other income, net
Foreign Currency Forward Contract(211)1,667 (450)1,906 Cost of Sales
Net Investment Hedges
Cross-currency swap(37,198)(55,876)3,099 (96,173)Interest income
$(10,927)$(97,134)$(34,078)$(73,983)
Three Months Ended June 30, 2024
Cash Flow Hedges
Interest rate swap$53,060 $5,088 $5,032 $53,116 Interest expense
Cross-currency swap(17,704)598 (239)(16,867)Other income, net
Foreign Currency Forward Contract$(519)$(4)$(93)$(430)
Net Investment Hedges
Cross-currency swap(22,780)(4,233)2,453 (29,466)Interest income
$12,057 $1,449 $7,153 $6,353 
Dollars in thousandsBalance in AOCI
Beginning of
Year		Amount of
Gain (Loss)
Recognized in
AOCI		Amount of Gain (Loss)
Reclassified from
AOCI into
Earnings		Balance in AOCI
End of Quarter		Location in
Statements of
Operations
Six Months Ended June 30, 2025
Cash Flow Hedges
Interest rate swap$48,794 $(10,883)$2,860 $35,051 Interest expense
Cross-currency swap(11,621)(49,537)(46,391)(14,767)Other income (expense), net
Foreign currency forward contract(624)2,103 (427)1,906 Cost of sales
Net Investment Hedges
Cross-currency swap(31,130)(59,311)5,732 (96,173)Interest income
$5,419 $(117,628)$(38,226)$(73,983)
Six Months Ended June 30, 2024
Cash Flow Hedges
Interest rate swap$43,556 $19,811 $10,251 $53,116 Interest expense
Cross-currency swap(15,763)30,130 31,234 (16,867)Other income (expense), net
Foreign currency forward contract— $(633)$(203)(430)
Net Investment Hedges
Cross-currency swap(45,498)20,687 4,655 (29,466)Interest income
$(17,705)$69,995 $45,937 $6,353 
Derivative Instruments not Designated Hedges:
From time to time, the Company enters into foreign currency forward contracts to mitigate risk from the fluctuations in foreign currency exchange rates associated with intercompany balances in Chinese yuan (“CNH”) and CHF. These contracts typically settle at various dates within twelve months of execution. As of June 30, 2025, the notional amounts totaled CNH 120.0 million, equivalent to $16.6 million.
In 2021, the Company entered into a foreign currency swap, with a notional amount of 800.0 million JPY, equivalent to $7.3 million, to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in Japanese yen. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another currency at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company subsequently paid down a portion of this swap, bringing the notional amount down to JPY 400.0 million, equivalent to 3.6 million as of June 30, 2025.
The fair value of the foreign currency swaps not designated as hedges was $0.7 million and $1.7 million as of June 30, 2025 and December 31, 2024, respectively.
The following table summarizes the gains and losses on derivative instruments not designated as hedges on the condensed consolidated statements of income, which was included in other income:
Dollars in thousandsThree Months Ended June 30,Six Months Ended June 30,
2025202420252024
Foreign currency forward contracts(1,869)— (1,695)— 
Foreign currency swaps(151)$135 18 $408 
Total$(2,020)$135 $(1,677)$408