v3.25.2
Derivatives and Hedging Activities
 9 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities Derivatives and Hedging Activities
The Company operates internationally and utilizes certain derivative financial instruments to manage its foreign currency, debt and interest rate exposures. At June 30, 2025 and September 30, 2024, derivative instruments were reflected on a gross-basis in the Consolidated Balance Sheets as follows:
Derivatives:June 30, 2025September 30, 2024
Interest Rate SwapsCross-Currency SwapsInterest Rate SwapsCross-Currency Swaps
Current assets:  
Other current assets$42 $— $— $— 
Long-term assets:  
Other non-current assets73 — — — 
Current liabilities:  
Other current liabilities(870)(21,006)(863)(18,042)
Long-term liabilities:  
Other non-current liabilities(1,454)(38,711)(1,743)(48,925)
Total derivatives(1)
$(2,209)$(59,717)$(2,606)$(66,967)
(1) Cross-currency swap amounts at June 30, 2025 and September 30, 2024 reflect $40,186 and $58,432 of partial advanced payments received from the counterparties to certain swap contracts, respectively (see below).
Note 8.   Derivatives and Hedging Activities (continued)

The following table presents information related to interest rate swaps entered into by the Company and designated as cash flow hedges:
June 30, 2025September 30, 2024
Notional amount$225,000 $175,000 
Weighted-average maturity period (years)2.93.2
Weighted-average received rate4.33 %4.85 %
Weighted-average pay rate3.80 %3.83 %

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate. The interest rate swaps have been designated as cash flow hedges of future variable interest payments which are considered probable of occurring. Based on the Company's assessment, all of the critical terms of each of the hedges matched the underlying terms of the hedged debt and related forecasted interest payments, and as such, these hedges were considered highly effective.

The fair value of the interest rate swaps reflected a net unrealized loss of $2,209 ($1,655 after tax) and $2,606 ($1,948 after tax) at June 30, 2025 and September 30, 2024, respectively, that is included in shareholders' equity as part of accumulated other comprehensive income (loss) ("AOCI"). Unrecognized gains of $1,914 ($1,431 after tax) and $3,848 ($2,874 after tax) related to previously terminated London Interbank Offered Rate ("LIBOR") based swaps were also included in AOCI as of June 30, 2025 and September 30, 2024, respectively. Assuming market rates remain constant with the rates at June 30, 2025, a gain (net of tax) of approximately $252 included in AOCI is expected to be recognized in earnings over the next twelve months.

The Company utilizes certain cross currency swaps as net investment hedges of foreign operations and assesses effectiveness for these contracts based on changes in fair value attributable to changes in spot prices. The following table presents information related to cross currency swaps entered into by the Company and designated as net investment hedges:
Notional AmountUnrealized Gains (Losses)
Recognized in AOCI
Swap CurrenciesMaturity DateJune 30, 2025September 30, 2024June 30, 2025September 30, 2024
USD/EURSeptember 2027$81,392 $81,392 $(5,786)$(5,440)
USD/SEKJune 202620,000 20,000 (2,683)(468)
USD/SGDAugust 2026— 20,000 — (441)
USD/EURAugust 202625,000 25,000 (4,878)(30)
USD/CADMay 2025— — — — 
$126,392 $146,392 $(13,347)
(1)
$(6,379)
(1)
(1) Total unrealized gains (losses) are presented net of tax of $4,506 and $2,156 as of June 30, 2025 and September 30, 2024, respectively.

In connection with certain of these cross currency swaps, the Company received cash from the counterparties, representing partial advance payments of amounts due under the U.S. dollar leg of the swaps. Outstanding advance payment amounts totaled $40,186 at June 30, 2025, of which $17,416 and $22,770 were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively. Outstanding advance payment amounts totaled $58,432 at September 30, 2024, of which $17,416 and $41,016 were included in other current liabilities and other non-current liabilities on the Consolidated Balance Sheet, respectively.

During the third quarter of fiscal 2025, certain cross currency swaps were terminated or modified following the sale of the Company's interest in the SGK Business. The Company made payments totaling $37,092 in connection with the settlement or modification of these cross currency swap contracts.

The Company previously used certain foreign currency debt instruments as net investment hedges of foreign operations with a notional amount of €30.0 million ($33,485) as of September 30, 2024. Currency losses of $3,820 (net of income taxes of $1,113), which represent effective hedges of net investments, were reported as a component of AOCI within currency translation adjustment at September 30, 2024.
Note 8.   Derivatives and Hedging Activities (continued)

Refer to Note 12, "Accumulated Other Comprehensive Income" for further details regarding amounts recorded in AOCI and the Consolidated Statements of Income (Loss) related to derivatives.