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Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

7. Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement, includes a single definition of fair value to be used for financial reporting purposes, provides a framework for applying this definition and for measuring fair value under GAAP, and establishes a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are summarized as follows:

Level 1 – Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2 – Fair value is determined using quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs other than quoted prices that are directly or indirectly observable.

Level 3 – Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique.

The carrying amounts reported in the Company’s condensed consolidated balance sheets for cash, accounts receivable, accounts payable and accrued expenses approximate fair value due to the immediate to short-term maturity of these financial instruments. The estimated fair value of the Company’s long-term debt, net was calculated based upon available market information. The carrying value and the estimated fair value of long-term debt, net are as follows:

 

Level in

March 31, 2025

 

December 31, 2024

 

Fair Value

Carrying

 

Estimated

 

Carrying

 

Estimated

 

($ in thousands)

Hierarchy

Amount

 

Fair Value

 

Amount

 

Fair Value

 

2021 Term Loan

 

2

$

 

685,667

 

$

 

695,914

 

$

 

687,203

 

$

 

699,916

 

Senior Notes

 

2

 

 

 

347,177

 

 

 

 

334,688

 

 

 

 

347,008

 

 

 

 

341,250

 

 

The Company has an equity investment measured at cost with a carrying value of $1.9 million as of both March 31, 2025 and December 31, 2024, and is only adjusted to fair value if there are identified events that would indicate a need for an upward or downward adjustment or changes in circumstances that may indicate impairment. The estimation of fair value requires the use of significant unobservable inputs, such as voting rights and obligations in the securities held, and is therefore classified within level 3 of the fair value hierarchy. There were no identified events that required a fair value adjustment during the three months ended March 31, 2025 and 2024.

The recurring fair value measurement of the interest rate swap was valued based on observable inputs for similar assets and liabilities including swaption values and other observable inputs for interest rates and yield curves and was classified within level 2 of the fair value hierarchy. The following presents the changes in the fair value of the interest rate swap in the gross balances within the below line items for the three months ended March 31, 2024:

 

 

 

Three Months Ended March 31,

 

($ in thousands)

 

2024

 

Prepaid expenses and other current assets

 

 

 

Beginning balance

 

$

689

 

Change in fair value of interest rate swap

 

 

152

 

Ending balance

 

$

841

 

 

 

 

 

Other non-current assets

 

 

 

Beginning balance

 

$

627

 

Change in fair value of interest rate swap

 

 

(50

)

Ending balance

 

$

577

 

 

The Company separately classified the current and non-current components based on the value of settlements due within 12 months (current) and greater than 12 months (non-current). The Company exercised its option to cancel the interest rate swap during the third quarter of fiscal year 2024.