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Fair Value | 3 Months Ended
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May 24, 2024
Fair Value Disclosures [Abstract] |
Fair Value | FAIR VALUE The carrying amounts for many of our financial instruments, including cash and cash equivalents, accounts and notes receivable, accounts payable and certain other liabilities, approximate their fair value due to their relatively short maturities. Our short-term investments, foreign exchange forward contracts, long-term investments and contingent consideration are measured at fair value on the Condensed Consolidated Balance Sheets. Our total debt is carried at cost and was $446.5 and $446.3 as of May 24, 2024 and February 23, 2024, respectively. The fair value of our total debt is measured using a discounted cash flow analysis based on current market interest rates for similar types of instruments and was $419.5 and $423.0 as of May 24, 2024 and February 23, 2024, respectively. The estimation of the fair value of our total debt is based on Level 2 fair value measurements. In Q1 2025, we invested $35.7 in a managed investment portfolio which consists of corporate debt securities, asset-backed securities and U.S. government debt securities. These investments are considered available-for-sale and are classified as Short-term investments on the Condensed Consolidated Balance Sheets. Our investment manager operates under a mandate to keep the average duration of investments under two years. Fair values for these investments are based upon valuations for identical or similar instruments in active markets, with the resulting net unrealized holding gains or losses reflected net of tax as a component of Accumulated other comprehensive income (loss) on the Condensed Consolidated Balance Sheets. The cost basis for these investments, determined using the specific identification method, was $35.7 as of May 24, 2024. Of our total short-term investments, $6.5 mature within one year and $29.2 mature after one year through five years. We may use derivative financial instruments to manage exposures to movements in foreign exchange rates and interest rates. The use of these financial instruments modifies the exposure of these risks with the intention to reduce our risk of volatility. We do not use derivatives for speculative or trading purposes. In connection with the acquisition of Viccarbe Habitat, S.L in Q3 2022, up to an additional $14.1 (or €13.0) is payable to the sellers based upon the achievement of certain revenue and operating income targets over a three-year period ending Q4 2025. This amount was considered to be contingent consideration and was treated for accounting purposes as part of the total purchase price of the acquisition. We used the Monte Carlo simulation model to calculate the fair value of the contingent consideration as of the acquisition date, which represents a Level 3 measurement. At each subsequent reporting date, changes in the fair value of the liability are recorded to Operating expenses until the liability is settled. As of May 24, 2024, the fair value of the contingent consideration was $0.0 based upon current projections for the Viccarbe business over the earnout period. The settlement of the contingent consideration could vary from this estimate based upon actual operating performance of the business during the earnout period compared to the underlying assumptions used in the estimation of fair value, including revenue and operating income projections, and changes to discount rates. Assets and liabilities measured at fair value within our Condensed Consolidated Balance Sheets as of May 24, 2024 and February 23, 2024 are summarized below:
Fair Value of Financial Instruments | May 24, 2024
Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 173.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 173.2 |  |
Restricted cash | 7.1 |  |  | — |  |  | — |  |  | 7.1 |  |
Managed investment portfolio and other investments |  |  |  |  |  |  |  |
Corporate debt securities - domestic | — |  |  | 13.8 |  |  | — |  |  | 13.8 |  |
Corporate debt securities - foreign | — |  |  | 4.8 |  |  | — |  |  | 4.8 |  |
Asset-backed securities | — |  |  | 9.9 |  |  | — |  |  | 9.9 |  |
U.S. government debt securities | 7.2 |  |  | — |  |  | — |  |  | 7.2 |  |
Foreign exchange forward contracts | — |  |  | 1.0 |  |  | — |  |  | 1.0 |  |
Auction rate security | — |  |  | — |  |  | 2.8 |  |  | 2.8 |  |
| $ | 187.5 |  |  | $ | 29.5 |  |  | $ | 2.8 |  |  | $ | 219.8 |  |
Liabilities: |  |  |  |  |  |  |  |
Foreign exchange forward contracts | $ | — |  |  | $ | (0.4) |  |  | $ | — |  |  | $ | (0.4) |  |
Contingent consideration | — |  |  | — |  |  | — |  |  | — |  |
| $ | — |  |  | $ | (0.4) |  |  | $ | — |  |  | $ | (0.4) |  |
Fair Value of Financial Instruments | February 23, 2024
Level 1 | Level 2 | Level 3 | Total
Assets: |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 318.6 |  |  | $ | — |  |  | $ | — |  |  | $ | 318.6 |  |
Restricted cash | 7.3 |  |  | — |  |  | — |  |  | 7.3 |  |
Foreign exchange forward contracts | — |  |  | 0.8 |  |  | — |  |  | 0.8 |  |
Auction rate security | — |  |  | — |  |  | 2.8 |  |  | 2.8 |  |
| $ | 325.9 |  |  | $ | 0.8 |  |  | $ | 2.8 |  |  | $ | 329.5 |  |
Liabilities: |  |  |  |  |  |  |  |
Foreign exchange forward contracts | $ | — |  |  | $ | (0.5) |  |  | $ | — |  |  | $ | (0.5) |  |
Contingent consideration | — |  |  | — |  |  | — |  |  | — |  |
| $ | — |  |  | $ | (0.5) |  |  | $ | — |  |  | $ | (0.5) |  |

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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/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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