Note 3 - Foreign Currency Translation |
9 Months Ended |
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Sep. 30, 2024 | |
| Notes to Financial Statements | |
| Foreign Currency Disclosure [Text Block] |
3. Foreign Currency Translation: Assets and liabilities of the Company’s foreign subsidiaries have been translated using the end of the reporting period exchange rates, and related revenues and expenses have been translated at average rates of exchange in effect during the period. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled. The net sales from our foreign operations for the three months ended September 30, 2024 and 2023 were $37.5 million and $14.0 million, respectively. The net sales from our foreign operations for the nine months ended September 30, 2024 and 2023 were $88.6 million and $55.0 million, respectively.
The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product. In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than three months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions. The Company recognized an unrealized loss of approximately $0.1 million on contracts outstanding as of September 30, 2024, which is included in foreign currency transaction loss in the Consolidated Statements of Earnings.
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