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FAIR VALUE | 9 Months Ended
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Sep. 28, 2024
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE Assets and liabilities measured at fair value on a recurring basis are summarized below:
| September 28, 2024 |  |  |  |
| Level 1 |  | Level 2 |  | Level 3 |  | Total |  |  |  |
Current assets measured at fair value: | (in thousands) |  |  |  |
Cash equivalents | $ | — |  |  | $ | 30 |  |  | $ | — |  |  | $ | 30 |  |  |  |  |
Interest rate swap | — |  |  | 278 |  |  | — |  |  | 278 |  |  |  |  |
Other assets: |  |  |  |  |  |  |  |  |  |  |
Life insurance policies | — |  |  | 47,734 |  |  | — |  |  | 47,734 |  |  |  |  |
Total assets measured at fair value | $ | — |  |  | $ | 48,042 |  |  | $ | — |  |  | $ | 48,042 |  |  |  |  |
Other long-term liabilities measured at fair value: |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 39,893 |  |  | $ | 39,893 |  |  |  |  |
Total liabilities measured at fair value | $ | — |  |  | $ | — |  |  | $ | 39,893 |  |  | $ | 39,893 |  |  |  |  |
The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the nine months ended September 28, 2024, there were no transfers between levels.
| December 30, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Current assets measured at fair value: | (in thousands)
Cash equivalents | $ | — |  |  | $ | 29 |  |  | $ | — |  |  | $ | 29 |
Other assets: |  |  |  |  |  |  |
Life insurance policies | — |  |  | 40,912 |  |  | — |  |  | 40,912 |
Interest rate swap | — |  |  | 966 |  |  | — |  |  | 966 |
Total assets measured at fair value | $ | — |  |  | $ | 41,907 |  |  | $ | — |  |  | $ | 41,907 |
Other long-term liabilities measured at fair value |  |  |  |  |  |  |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 33,265 |  |  | $ | 33,265 |
Total liabilities measured at fair value | $ | — |  |  | $ | — |  |  | $ | 33,265 |  |  | $ | 33,265 |
During the year ended December 30, 2023, there were no transfers between levels. Contingent Consideration The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions.
| Nine Months Ended
| September 28, 2024 |  | September 30, 2023
| (in thousands)
Beginning balance | $ | 33,265 |  |  | $ | 13,431 |
Payments | — |  |  | (15,130) |
Total gains or losses (realized/unrealized): |  |  |
Adjustment of previously recorded contingent liability | 6,628 |  |  | 1,810 |
Foreign currency translation | — |  |  | (111) |
Ending balance | $ | 39,893 |  |  | $ | — |
The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, which incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $55.0 million, of which the value accrued as of September 28, 2024 is $39.9 million as the probability of achieving the maximum target is estimated to be 73%. The volatility and weighted average cost of capital is approximately 5% and 8%, respectively. Increases or decreases in these assumptions may result in a higher or lower fair value measurement, respectively. Cash Flow Hedge The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. The Company had an interest rate swap with a notional amount of $500 million maturing November 2, 2024 to manage interest rate fluctuation related to floating rate borrowings under the Credit Facility, at a fixed rate of 4.65%. Debt Instruments The book value of the Company’s revolving loans, which are variable rate loans carried at amortized cost, approximates the fair value based on current market pricing of similar debt. As the fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy. The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other observable outputs, it is deemed to be Level 2 within the fair value hierarchy. The book value and fair value of the Company’s Senior Notes is summarized below:
| September 28, 2024 |  | December 30, 2023
| Book Value |  | Fair Value |  | Book Value |  | Fair Value
| (in thousands)
4.25% Senior Notes due 2028 | $ | 500,000 |  |  | $ | 484,350 |  |  | $ | 500,000 |  |  | $ | 478,100 |
3.75% Senior Notes due 2029 | 500,000 |  |  | 470,100 |  |  | 500,000 |  |  | 458,100 |
4.00% Senior Notes due 2031 | 500,000 |  |  | 459,350 |  |  | 500,000 |  |  | 449,350 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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