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Note 9 - Derivative Financial Instruments
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 01, 2012
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
During
the period ended January 1, 2012, the Company entered into
forward foreign exchange contracts to reduce its exposure to
foreign exchange currency rate fluctuations related to
forecasted Canadian dollar denominated payroll, rent and
utility cash flows in the fourth quarter of fiscal 2011 and
the first four months of fiscal 2012, and Mexican peso
denominated payroll, rent and utility cash flows in the first
seven months of 2012. These contracts were effective as
hedges from an economic perspective, but did not meet the
requirements for hedge accounting under ASC 815. Accordingly,
changes in the fair value of these contracts were recognized
into net income in the consolidated statement of operations
and comprehensive income. The Company does not enter into
forward foreign exchange contracts for trading or speculative
purposes.
The
following table presents a summary of the outstanding foreign
currency forward contracts as at January 1, 2012:
The
unrealized loss recognized in earnings as a result of
revaluing the instruments to fair value on January 1, 2012
was $43 which was included in loss on derivative financial
instruments in the statement of operations and comprehensive
income. Fair value was determined using the market approach
with valuation based on market observables (Level 2
quantitative inputs in the hierarchy set forth under ASC
820). The realized gain on these contracts was $109, and is
included as a component of cost of goods sold, in the
consolidated statement of operations.
The
following table presents the fair value of the
Company’s derivative instruments located on the
consolidated balance sheet as at January 1, 2012:
There
were no derivative instruments outstanding at January 2, 2011
or January 3, 2010.
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