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Financial Instruments | 3 Months Ended
--- | ---
Mar. 31, 2024
Fair Value Disclosures [Abstract] |
Financial Instruments | 4. FINANCIAL INSTRUMENTS Investments consist of the following as of March 31, 2024 and December 31, 2023 (dollars in thousands):
|  | March 31, 2024 |
|  |  |  |  | Gross Unrealized |  |  |  |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Short-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |
Non-governmental debt securities |  | $ | 240,241 |  |  | $ | 227 |  |  | $ | (887 | ) |  | $ | 239,581 |
Treasury and federal agencies |  |  | 276,887 |  |  |  | 79 |  |  |  | (945 | ) |  |  | 276,021 |
Total short-term investments (available for sale) |  | $ | 517,128 |  |  | $ | 306 |  |  | $ | (1,832 | ) |  | $ | 515,602 |
|  | December 31, 2023 |
|  |  |  |  | Gross Unrealized |  |  |  |
|  | Cost |  |  | Gain |  |  | (Loss) |  |  | Fair Value |
Short-term investments (available for sale): |  |  |  |  |  |  |  |  |  |  |  |
Non-governmental debt securities |  |  | 245,886 |  |  |  | 719 |  |  |  | (892 | ) |  |  | 245,713 |
Treasury and federal agencies |  |  | 239,859 |  |  |  | 393 |  |  |  | (830 | ) |  |  | 239,422 |
Total short-term investments (available for sale) |  | $ | 485,745 |  |  | $ | 1,112 |  |  | $ | (1,722 | ) |  | $ | 485,135 |
In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year. Our non-governmental debt securities primarily consist of corporate bonds, certificates of deposit and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. Realized gains or loss resulting from sales of investments were zero during the quarters ended March 31, 2024 and March 31, 2023. Fair Value Measurements FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of March 31, 2024, we held investments that are required to be measured at fair value on a recurring basis. These investments (available for sale) consist of non-governmental debt securities and treasury and federal agencies securities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. All of our available for sale investments were measured under Level 2 as of March 31, 2024 and December 31, 2023. Additionally, money market funds of $34.1 million and $30.3 million included within cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively, were measured under Level 1. Federal agency debt securities and commercial paper of $20.6 million and federal agency debt securities of $44.9 million included within cash and cash equivalents on our unaudited condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively, were measured under Level 2. Equity Method Investment Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of March 31, 2024, our investment in an equity affiliate equated to 30.7%, or $1.3 million. During the quarters e nded March 31, 2024 and 2023, we recorded approximately $0.1 million of gain and less than $0.1 million of loss, respectively, related to our equity affiliate within miscellaneous income (expense) on our unaudited condensed consolidated statements of income. We make periodic operating maintenance payments to our equity affiliate. The total fees recorded during the quarters ended March 31, 2024 and 2023 were as follows (dollars in thousands):
| Maintenance Fee Payments |
For the quarter ended March 31, 2024 | $ | 444 |
For the quarter ended March 31, 2023 | $ | 431 |
Credit Agreement On January 23, 2024, the Company and the subsidiary guarantors thereunder entered into a Second Amendment (the “Second Amendment”) to their credit agreement, dated as of September 8, 2021 and as amended on April 1, 2022 (the “Existing Credit Agreement”), with the lenders from time to time parties thereto and Wintrust Bank N.A. (“Wintrust”), in its capacities as the sole lead arranger, sole bookrunner, administrative agent and letter of credit issuer thereunder (the Existing Credit Agreement, as further amended by the Second Amendment, the “Credit Agreement”). The Second Amendment, among other things: (i) extends the maturity date of the revolving credit facility to January 31, 2027; (ii) lowers the “Prime Rate” floor from 4% to 3%; (iii) replaces BMO Bank N.A. (formerly known as BMO Harris Bank N.A.) with Valley National Bancorp as one of the lenders that is party to the revolving credit facility; and (iv) modifies the relative commitments of the lenders that are parties to the revolving credit facility. The credit agreement provides the Company with the benefit of a $125.0 million senior secured revolving credit facility. The $125.0 million revolving credit facility under the credit agreement is scheduled to mature on January 31, 2027. So long as no default has occurred and other conditions have been met, the Company may request an increase in the aggregate commitment in an amount not to exceed $50.0 million. The loans and letter of credit obligations under the credit agreement are secured by substantially all assets of the Company and the subsidiary guarantors. The credit agreement and the ancillary documents executed in connection therewith contain customary affirmative, negative and financial maintenance covenants, including a requirement for the borrowers to maintain cash and cash equivalents in domestic accounts of at least $156,250,000 at all times. Acquisitions to be undertaken by the Company must meet certain criteria, and the Company’s ability to make restricted payments, including payments in connection with a repurchase of shares of our common stock and quarterly dividend payments, is subject to an aggregate maximum of $100.0 million per fiscal year. Upon the occurrence of certain regulatory events or if the Company’s unrestricted cash, cash equivalents and short term investments are less than 125% of the aggregate amount of the loan commitments then in effect, the Company is required to maintain cash in a segregated, restricted account in an amount not less than the aggregate loan commitments then in effect. The credit agreement also contains customary representations and warranties, events of default, and rights and remedies upon the occurrence of any event of default thereunder, including rights to accelerate the loans, terminate the commitments and realize upon the collateral securing the obligations under the credit agreement. Under the credit agreement, outstanding principal amounts bear annual interest at a fluctuating rate equal to 1.0% less than the administrative agent’s prime commercial rate, subject to a 3.0% minimum rate. A higher rate may apply to late payments or if any event of default exists. As of March 31, 2024 and December 31, 2023, there were no outstanding borrowings under the revolving credit facility.

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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