DERIVATIVES AND HEDGING ACTIVITIES |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVES AND HEDGING ACTIVITIES | NOTE 5. DERIVATIVES AND HEDGING ACTIVITIES
The Company, through its wholly owned subsidiaries, may enter into derivative financial instruments to manage risks related to interest rates.
The following table summarizes the fair value of the interest rate swap agreement as recorded in the Company’s Consolidated Balance Sheets:
Derivatives Designated as Hedging Instruments
The Company, through its wholly owned subsidiaries, may periodically enter into interest rate swap agreements to reduce its exposure to fluctuations in interest rates on variable interest rate debt and their impact on earnings and cash flows. The Company designates its interest rate swaps as cash flow hedges at inception.
On June 17, 2026, the Company, through its wholly owned subsidiary Aggieland Wild Animal – Texas, entered into the Rate Conversion Agreement, interest rate swap, with ARC Fixed Rate Provider, with Cendera Bank acting as servicing agent, with a notional amount of $2.33 million to convert the Current 2025 Term Loan, with a principal amount of $2.33 million and variable rate CME 1-month SOFR debt, to a fixed interest rate of 6.99% that matures on June 1, 2033, the same maturity date as the Current 2025 Term Loan. As of June 28, 2026 the Rate Conversion Agreement had a notional amount of $2.33 million and declines over the term of the loan. The fair value of the interest rate swap was a liability of $66,358 and as of June 28, 2026 and September 28, 2025, respectively, and is included in Other liabilities in the Consolidated Balance Sheets. The interest rate swap was designated for hedge accounting treatment as a cash flow hedge. The Company records gains and losses due to changes in fair value of the derivatives in Other comprehensive income (loss) and Accumulated other comprehensive income (loss), with amounts reclassified to interest expense when the hedged interest payments affect earnings.
The following table summarizes the effects of derivatives designated as hedging instruments in the Company’s Consolidated Financial Statements:
As of June 28, 2026, the Company estimates that approximately $15,000 of expense will be reclassified from Accumulated other comprehensive loss to interest expense during the twelve months ending July 4, 2027.
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