Derivative Financial Instruments |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| Derivative Financial Instruments | Derivative Financial Instruments We enter into derivative instruments to hedge a portion of forecasted cash flows denominated in Mexican pesos. The derivative instruments used to manage these exposures are designated and qualify as cash flow hedges. The derivative liability for foreign exchange contracts was $1.2 million as of March 31, 2026 and is included in the condensed consolidated balance sheet in accrued expenses. We did not have a derivative asset or liability for foreign exchange contracts as of December 31, 2025. The effective portion of the gain or loss on a derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same period that the hedged exposure affects earnings. The gain recognized in earnings was not material in the three months ended March 31, 2026. The loss recognized in earnings was not material in the three months ended March 31, 2025. As of March 31, 2026, the aggregate notional values of outstanding foreign currency swap contracts designated as cash flow hedges were $43.2 million. During the year ended December 31, 2025, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $65 million, intended to fix the one-month SOFR rate on that portion of our Term Loan Facility. The variable portion of the interest rate swap and the interest rate on our Term Loan Facility is tied to the one-month SOFR rate. Monthly, the interest rate swap agreement is settled with the counterparty in conjunction with the one-month SOFR reset on our Term Loan Facility. The gain recognized in earnings was not material in the three months ended March 31, 2026. The derivative asset for the interest rate swap was $0.2 million as of March 31, 2026 and is included in the condensed consolidated balance sheet in other assets.
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