v3.26.1
Financial Instruments and Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Financial Instruments and Fair Value Measurements Financial Instruments and Fair Value Measurements
Financial Instruments
A financial instrument is cash or a contract that imposes an obligation to deliver or conveys a right to receive cash or another financial instrument. The carrying values of cash and cash equivalents, accounts receivable and accounts payable are considered to be representative of fair value because of the short maturity of these instruments. The fair value of debt approximates the carrying value of debt, due to the variable interest rate on our Credit Facility and the maturity of outstanding debt.
Derivative Instruments and Hedging Activities
During 2025, the Company had open Mexican peso-denominated foreign currency forward contracts. The Company used foreign currency forward contracts solely for hedging and not for speculative purposes. Management believes that its use of these instruments to reduce risk was in the Company’s best interest. The counterparties to these financial instruments were financial institutions with investment grade credit ratings.
Foreign Currency Exchange Rate Risk
Foreign currency transactions are remeasured into the functional currency using translation rates in effect at the time of the transaction with the resulting adjustments included on the condensed consolidated statements of operations within other (income) expense, net. These foreign currency transaction (gains) losses, including the impact of hedging activities, were $(328) and $2,733 for the three months ended June 30, 2026 and 2025, and $(54) and $2,475 for the six months ended June 30, 2026 and 2025, respectively.
The Company conducts business internationally and, therefore, is exposed to foreign currency exchange rate risk. The Company has historically used derivative financial instruments as cash flow hedges to manage its exposure to fluctuations in foreign currency exchange rates by reducing the effect of such fluctuations on foreign currency denominated intercompany transactions, inventory purchases and other foreign currency exposures.
Cash Flow Hedges
The Company entered into foreign currency forward contracts to hedge the Mexican peso currency in 2025. These forward contracts were executed to hedge forecasted transactions and have been accounted for as cash flow hedges. As such, gains and losses on derivatives qualifying as cash flow hedges are recorded in accumulated other comprehensive loss, to the extent that hedges are effective, until the underlying transactions are recognized in earnings. Unrealized amounts in accumulated other comprehensive loss fluctuate based on changes in the fair value of hedge derivative contracts at each reporting period. The cash flow hedges were highly effective. The effectiveness of the transactions were measured using regression analysis and forecasted future purchases of the currency.
In certain instances, the foreign currency forward contracts may not qualify for hedge accounting or are not designated as hedges and, therefore, are marked-to-market with gains and losses recognized in the Company’s condensed consolidated statements of operations as a component of other expense (income), net.
The Company’s foreign currency forward contracts offset a portion of the gains and losses on the underlying foreign currency denominated transactions as follows:
Mexican peso-denominated Foreign Currency Forward Contracts – Cash Flow Hedges
The Company held Mexican peso-denominated foreign currency forward contracts which expired ratably on a monthly basis from January 2025 to December 2025.
The Company evaluated the effectiveness of the Mexican peso denominated forward contracts held during 2025 and concluded that the hedges were highly effective.
Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net loss for the three months ended June 30 were as follows:
Gain recorded in other
comprehensive (loss) income
Gain reclassified from
other comprehensive (loss) income into net loss (A)
2026202520262025
Derivatives designated as cash flow hedges:
Forward currency contracts$— $2,265 $— $29 
_____________________________

(A)
Losses reclassified from other comprehensive (loss) income recognized in selling, general and administrative expenses ("SG&A") in the Company's condensed consolidated statements of operations were $(126) for the three months ended June 30, 2025. Gains reclassified from other comprehensive income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $155 for the three months ended June 30, 2025.
Gross amounts recorded for the cash flow hedges in other comprehensive (loss) income and in net loss for the six months ended June 30 were as follows:
Gain recorded in other
comprehensive (loss) income
Loss reclassified from
other comprehensive (loss) income into net loss (A)
2026202520262025
Derivatives designated as cash flow hedges:
Forward currency contracts$—$3,367$—$(569)
(A)
Losses reclassified from other comprehensive (loss) income recognized in selling, general and administrative expenses ("SG&A") in the Company's condensed consolidated statements of operations were $(127) for the six months ended June 30, 2025. Losses reclassified from other comprehensive (loss) income into net loss recognized in cost of goods sold (“COGS”) in the Company’s condensed consolidated statements of operations were $(442) for the six months ended June 30, 2025.
Cash flows from derivatives used to manage foreign currency exchange risks are classified as operating activities within the condensed consolidated statements of cash flows.
Fair Value Measurements
Historically, certain assets and liabilities held by the Company were measured at fair value on a recurring basis and were categorized using the three levels of the fair value hierarchy based on the reliability of the inputs used. Fair values estimated using Level 1 inputs consisted of quoted prices in active markets for identical assets or liabilities that the Company had the ability to access at the measurement date. Fair values estimated using Level 2 inputs, other than quoted prices, were observable for the asset or liability, either directly or indirectly and included among other things, quoted prices for similar assets or liabilities in markets that were active or inactive as well as inputs other than quoted prices that were observable. For forward currency contracts, inputs included forward foreign currency exchange rates. Fair values estimated using Level 3 inputs consisted of significant unobservable inputs. There were no assets or liabilities measured at fair value at June 30, 2026 or December 31, 2025.