Derivative Financial Instruments |
6 Months Ended |
|---|---|
Jul. 05, 2025 | |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| Derivative Financial Instruments | Derivative Financial Instruments The Company may use derivative financial instruments to manage certain exposures to the variability of foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Condensed Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Condensed Consolidated Statement of Cash Flows. Cash Flow Hedges Foreign Currency Forward Contracts The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive income in the Condensed Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction was recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive income may be recognized in the Condensed Consolidated Statement of Operations based on an assessment of the contracts at the time of termination. The Company has entered into various foreign currency forward contracts for a portion of its forecasted operating expenses for the quarter ended July 5, 2025. As of July 5, 2025, the foreign currency forward contracts denominated in the Norwegian Krone had maturities of to two months and an aggregate notional value of $1.6 million. The fair value of the contracts, contract gains or losses recognized in other comprehensive income (loss) and amounts reclassified from accumulated other comprehensive income into earnings were not material for any of the periods presented and are not expected to be material in the next twelve months. Non-designated Hedges Foreign Currency Forward Contracts The Company may use foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Condensed Consolidated Statement of Operations. The Company does not apply hedge accounting to these foreign currency forward contracts. As of July 5, 2025, the Company held foreign currency forward contracts denominated in Hungarian Forint with an aggregate notional value of $3.7 million. The fair value of the foreign currency forward contracts and contract gains and losses recognized in income were not material for any of the periods presented. All foreign currency forward contracts, both designated and not designated as hedging instruments, are classified within Level 2 as the valuation inputs include foreign exchange rates, forward and spot prices for currencies, and market observable data of similar instruments.
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