Quarterly report pursuant to Section 13 or 15(d)

Derivatives and Fair Value Measurements

Derivatives and Fair Value Measurements	6 Months Ended
Derivatives and Fair Value Measurements	Apr. 01, 2023
Derivatives and Fair Value Measurements [Abstract]
Derivatives and Fair Value Measurements	Note L—Derivatives and Fair Value Measurements From time to time, we may use interest rate swaps or other instruments to manage our interest rate exposure and reduce the impact of future interest rate changes. These financial instruments are not used for trading or speculative purposes. We have designated our interest rate swap contracts as cash flow hedges of our future interest payments. As a result, the gains and losses on the swap contracts are reported as a component of other comprehensive income and are reclassified into interest expense as the related interest payments are made. As of March 2023, all of our other comprehensive income was attributable to shareholders; none related to the non-controlling interest. Outstanding instruments as of March 2023 are as follows: The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheets for derivatives related to our interest swap agreements as of March 2023 and September 2022 (in thousands): From time to time, we may purchase cotton option contracts to economically hedge the risk related to market fluctuations in the cost of cotton used in our operations. We do not receive hedge accounting treatment for these derivatives. As such, the realized and unrealized gains and losses associated with them are recorded within cost of goods sold on the Condensed Consolidated Statement of Operations. No such cotton contracts were outstanding at March 2023 and September 2022. ASC 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Assets and liabilities measured at fair value are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 – Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are less active. Level 3 – Unobservable inputs that are supported by little or no market activity for assets or liabilities and includes certain pricing models, discounted cash flow methodologies and similar techniques. The following financial liabilities are measured at fair value on a recurring basis (in thousands): The fair value of the interest rate swap agreements was derived from a discounted cash flow analysis based on the terms of the contract and the forward interest rate curves adjusted for our credit risk, which fall in Level 2 of the fair value hierarchy. At March 2023 and September 2022, book value for fixed rate debt approximated fair value based on quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities (a Level 2 fair value measurement). March 2023 September 2022 Deferred tax assets $ (60) $ (48) Other non-current liabilities 240 189 Accumulated other comprehensive income $ 180 $ 141 Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant for Observable Unobservable Identical Assets Inputs Inputs Period Ended Total (Level 1) (Level 2) (Level 3) Interest Rate Swaps March 2023 $ 240 - $ 240 - September 2022 $ 189 - $ 189 - Effective Date Notional Amount Fixed LIBOR Rate Maturity Date Interest Rate Swap July 25, 2018 $ 20.0 million 3.18% July 25, 2023