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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Note 9—Fair Value Measurements The Company’s current assets and current liabilities are financial instruments and most of these items (other than marketable securities, inventories and the short-term portion of deferred compensation funding) are recorded at cost in the Consolidated Balance Sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. The carrying value of the Company’s line of credit represents the outstanding amount of the borrowings, which approximates fair value. The Company’s financial assets that are measured at fair value on a recurring basis are its marketable securities and deferred compensation funding. The recorded values of all of the financial instruments approximate their current fair values because of their nature, stated interest rates and respective maturity dates or durations. The Company’s marketable securities are held by the Company’s captive insurance company to satisfy capital requirements of the state regulator related to captive insurance companies. Such securities primarily consist of tax-exempt municipal bonds, which are classified as available-for-sale and are reported at fair value. Unrealized gains and losses associated with these investments are included in “Unrealized loss on available-for-sale marketable securities, net of taxes” within the Consolidated Statements of Comprehensive (Loss) Income. The fair value of these marketable securities is classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable. Such valuations are determined by a third-party pricing service. For the three and nine months ended September 30, 2023, the Company recorded unrealized losses, net of taxes of $1.6 million and unrealized losses, net of taxes of $1.3 million on marketable securities, respectively. For the three and nine months ended September 30, 2022, the Company recorded unrealized losses, net of taxes of $2.3 million and $9.5 million, respectively. As part of a prior year acquisition of a prepackaged meal manufacturer, the Company agreed to pay royalties to the seller on all future product sales. The Company recorded a liability for the expected future payments within “Other long-term liabilities” on the Consolidated Balance Sheets and any payments within 12 months within “Other accrued expenses and current liabilities”. The fair value of this liability is measured using forecasted sales models (Level 3). For the three months ended September 30, 2023 and 2022, the Company recorded realized gains of $0.7 million and $0.4 million, respectively, associated with changes in fair value of the liability. Gains and losses are recorded within “Costs of services provided” in the Consolidated Statements of Comprehensive (Loss) Income related to the subsequent measurement of the liability. For the nine months ended September 30, 2023 and 2022, the Company recorded realized gains of $1.0 million and $2.3 million, respectively, within “Costs of services provided” in the Consolidated Statements of Comprehensive (Loss) Income related to the subsequent measurement of the liability at each period end. For the three months ended September 30, 2023 and 2022, the Company received total proceeds, less the amount of interest received, of $0.6 million and $0.3 million, respectively, from sales of available-for-sale municipal bonds. For both the three months ended September 30, 2023 and 2022, these sales resulted in realized losses of less than $0.1 million. For the nine months ended September 30, 2023 and 2022, the Company received total proceeds, less the amount of interest received, of $1.9 million and $9.8 million, respectively, from sales of available-for-sale municipal bonds. For both the nine months ended September 30, 2023 and 2022, these sales resulted in realized losses of less than $0.1 million, which were recorded within “Investment and other income (loss), net” in the Consolidated Statements of Comprehensive (Loss) Income. The basis for the sale of these securities was the specific identification of each bond sold during the period. The investments under the funded deferred compensation plan are classified as trading securities and unrealized gains or losses are recorded in “Selling, general and administrative expense” in the Consolidated Statements of Comprehensive (Loss) Income. The fair value of these investments are determined based on quoted market prices (Level 1). For the three months ended September 30, 2023 and 2022, the Company recognized unrealized losses of $1.2 million and $0.8 million, respectively, related to equity securities still held at the respective reporting dates. For the nine months ended September 30, 2023 and 2022, the Company recognized unrealized gains of $2.6 million and unrealized losses of $11.4 million, respectively, related to equity securities still held at the respective reporting dates. The following tables provide fair value measurement information for the Company’s marketable securities and deferred compensation fund investments as of September 30, 2023 and December 31, 2022:
| As of September 30, 2023
|  |  |  |  | Fair Value Measurement Using:
| Carrying Amount |  | Total Fair Value |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets: |
Marketable securities |  |  |  |  |  |  |  |  |
Municipal bonds — available-for-sale | $ | 90,004 |  |  | $ | 90,004 |  |  | $ | — |  |  | $ | 90,004 |  |  | $ | — |
Deferred compensation fund |  |  |  |  |  |  |  |  |
Money Market 1 | $ | 1,993 |  |  | $ | 1,993 |  |  | $ | — |  |  | $ | 1,993 |  |  | $ | — |
Commodities | 272 |  |  | 272 |  |  | 272 |  |  | — |  |  | — |
Fixed Income | 3,887 |  |  | 3,887 |  |  | 3,887 |  |  | — |  |  | — |
International | 4,085 |  |  | 4,085 |  |  | 4,085 |  |  | — |  |  | — |
Large Cap Blend | 2,159 |  |  | 2,159 |  |  | 2,159 |  |  | — |  |  | — |
Large Cap Growth | 12,871 |  |  | 12,871 |  |  | 12,871 |  |  | — |  |  | — |
Large Cap Value | 5,817 |  |  | 5,817 |  |  | 5,817 |  |  | — |  |  | — |
Mid Cap Blend | 2,599 |  |  | 2,599 |  |  | 2,599 |  |  | — |  |  | — |
Real Estate | 312 |  |  | 312 |  |  | 312 |  |  | — |  |  | — |
Small Cap Blend | 3,782 |  |  | 3,782 |  |  | 3,782 |  |  | — |  |  | — |
Deferred compensation fund 2 | $ | 37,777 |  |  | $ | 37,777 |  |  | $ | 35,784 |  |  | $ | 1,993 |  |  | $ | — |
| As of December 31, 2022
|  |  |  |  | Fair Value Measurement Using:
| Carrying Amount |  | Total Fair Value |  | Quoted Prices in Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
Financial Assets: |
Marketable securities |  |  |  |  |  |  |  |  |
Municipal bonds — available-for-sale | $ | 95,200 |  |  | $ | 95,200 |  |  | $ | — |  |  | $ | 95,200 |  |  | $ | — |
Deferred compensation fund |  |  |  |  |  |  |  |  |
Money Market 1 | $ | 2,420 |  |  | $ | 2,420 |  |  | $ | — |  |  | $ | 2,420 |  |  | $ | — |
Commodities | 170 |  |  | 170 |  |  | 170 |  |  | — |  |  | — |
Fixed Income | 3,571 |  |  | 3,571 |  |  | 3,571 |  |  | — |  |  | — |
International | 4,093 |  |  | 4,093 |  |  | 4,093 |  |  | — |  |  | — |
Large Cap Blend | 1,210 |  |  | 1,210 |  |  | 1,210 |  |  | — |  |  | — |
Large Cap Growth | 11,064 |  |  | 11,064 |  |  | 11,064 |  |  | — |  |  | — |
Large Cap Value | 6,133 |  |  | 6,133 |  |  | 6,133 |  |  | — |  |  | — |
Mid Cap Blend | 2,667 |  |  | 2,667 |  |  | 2,667 |  |  | — |  |  | — |
Real Estate | 359 |  |  | 359 |  |  | 359 |  |  | — |  |  | — |
Small Cap Blend | 3,424 |  |  | 3,424 |  |  | 3,424 |  |  | — |  |  | — |
Deferred compensation fund 2 | $ | 35,111 |  |  | $ | 35,111 |  |  | $ | 32,691 |  |  | $ | 2,420 |  |  | $ | — |
1.The fair value of the money market fund is based on the net asset value (“NAV”) of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment. 2.As of September 30, 2023 and December 31, 2022, $1.4 million and $1.6 million of short-term deferred compensation funding is included in “Prepaid expenses and other assets” on the Company’s Consolidated Balance Sheets, respectively. Such amounts of short-term deferred compensation funding represent investments expected to be liquidated and paid within 12 months of September 30, 2023 and December 31, 2022, respectively.
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value |  | Credit Impairment Losses 1
| (in thousands)
September 30, 2023 |  |  |  |  |  |  |  |  |
Type of security: |  |  |  |  |  |  |  |  |
Municipal bonds — available-for-sale | $ | 96,051 |  |  | $ | — |  |  | $ | (6,047) |  |  | $ | 90,004 |  |  | $ | — |
Total debt securities | $ | 96,051 |  |  | $ | — |  |  | $ | (6,047) |  |  | $ | 90,004 |  |  | $ | — |
December 31, 2022 |  |  |  |  |  |  |  |  |
Type of security: |  |  |  |  |  |  |  |  |
Municipal bonds — available-for-sale | $ | 99,601 |  |  | $ | 229 |  |  | $ | (4,630) |  |  | $ | 95,200 |  |  | $ | — |
Total debt securities | $ | 99,601 |  |  | $ | 229 |  |  | $ | (4,630) |  |  | $ | 95,200 |  |  | $ | — |
1.The Company performs a credit impairment loss assessment quarterly on an individual security basis. As of September 30, 2023 and December 31, 2022, no allowance for credit loss impairment has been recognized as the issuers of these securities have not established a cause for default and various rating agencies have reaffirmed each security’s investment grade status. The fair value of these securities have fluctuated since the purchase date as market interest rates fluctuate. The Company does not intend to sell these securities and it is more likely than not that the Company will not be required to sell before the recovery of the securities’ amortized cost basis. The following table summarizes the contractual maturities of debt securities held at September 30, 2023 and December 31, 2022, which are classified as “Marketable securities, at fair value” in the Consolidated Balance Sheets:
|  | Municipal Bonds — Available-for-Sale
Contractual maturity: |  | September 30, 2023 |  | December 31, 2022
|  | (in thousands)
Maturing in one year or less |  | $ | 5,217 |  |  | $ | 2,798 |
Maturing in second year through fifth year |  | 35,005 |  |  | 35,068 |
Maturing in sixth year through tenth year |  | 34,760 |  |  | 38,575 |
Maturing after ten years |  | 15,022 |  |  | 18,759 |
Total debt securities |  | $ | 90,004 |  |  | $ | 95,200 |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//820/tableOfContent + Details
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