XML 24 R15.htm IDEA: XBRL DOCUMENT
v3.23.1

Fair Value Measurements | 3 Months Ended
--- | ---
Mar. 31, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements U.S. GAAP defines the fair value of a financial instrument as the amount that would be received from the sale of an asset in an orderly transaction between market participants at the measurement date. The Company is responsible for the determination of fair value and the supporting methodologies and assumptions. The Company uses various pricing sources and third parties to provide and validate the values utilized. The degree of judgment used in measuring the fair value of financial instruments is generally inversely correlated with the level of observable valuation inputs. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Financial instruments for which no quoted prices are available have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. Assets recorded at fair value are measured and classified in accordance with a fair value hierarchy consisting of the three “levels” based on the observability of inputs available in the marketplace used to measure the fair values as discussed below: •Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; •Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or •Level 3: Unobservable inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Management estimates include certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Recurring Fair Value Measurements The Company values its investments including commercial paper and floating net asset value money market funds recorded in cash, cash equivalents, and restricted cash, investments in marketable debt securities, available-for-sale, assets held in the rabbi trust, deferred compensation liability and contingent and deferred consideration at fair value on a recurring basis. Fair values for investments included in cash, cash equivalents, and restricted cash and marketable debt securities, available-for-sale were determined for each individual security in the investment portfolio and all securities are Level 1 or 2 measurements as appropriate. Fair values for assets held in the rabbi trust and related deferred compensation liability were determined based on the cash surrender value of the company owned variable life insurance policies and underlying investments in the trust, and are Level 2 and Level 1 measurements, respectively. Contingent consideration in connection with acquisitions, is carried at fair value and determined on a contract-by-contract basis, calculated using unobservable inputs based on a probability of achieving EBITDA and other performance requirements, and is a Level 3 measurement. Deferred consideration in connection with acquisitions is carried at fair value and calculated using a discounted cash flow estimate with the only remaining condition on such payments being the passage of time, and is a Level 2 measurement. Assets and liabilities carried at fair value on a recurring basis consisted of the following (in thousands):
| March 31, 2023 |  | December 31, 2022
| Fair Value |  | Level 1 |  | Level 2 |  | Level 3 |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets held in rabbi trust | $ | 9,953 |  |  | $ | — |  |  | $ | 9,953 |  |  | $ | — |  |  | $ | 9,553 |  |  | $ | — |  |  | $ | 9,553 |  |  | $ | — |
Cash equivalents (1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial paper | $ | 39,213 |  |  | $ | — |  |  | $ | 39,213 |  |  | $ | — |  |  | $ | 41,324 |  |  | $ | — |  |  | $ | 41,324 |  |  | $ | — |
Money market funds | 135,353 |  |  | 135,353 |  |  | — |  |  | — |  |  | 139,025 |  |  | 139,025 |  |  | — |  |  | — |
| $ | 174,566 |  |  | $ | 135,353 |  |  | $ | 39,213 |  |  | $ | — |  |  | $ | 180,349 |  |  | $ | 139,025 |  |  | $ | 41,324 |  |  | $ | — |
Marketable debt securities, available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | $ | 56,439 |  |  | $ | 56,439 |  |  | $ | — |  |  | $ | — |  |  | $ | 134,549 |  |  | $ | 134,549 |  |  | $ | — |  |  | $ | — |
Corporate debt | 75,843 |  |  | — |  |  | 75,843 |  |  | — |  |  | 118,041 |  |  | — |  |  | 118,041 |  |  | — |
ABS and other | 238 |  |  | — |  |  | 238 |  |  | — |  |  | 844 |  |  | — |  |  | 844 |  |  | — |
| $ | 132,520 |  |  | $ | 56,439 |  |  | $ | 76,081 |  |  | $ | — |  |  | $ | 253,434 |  |  | $ | 134,549 |  |  | $ | 118,885 |  |  | $ | — |
Long-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. treasuries | $ | 17,582 |  |  | $ | 17,582 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,715 |  |  | $ | 20,715 |  |  | $ | — |  |  | $ | — |
U.S. government sponsored entities | 530 |  |  | — |  |  | 530 |  |  | — |  |  | 536 |  |  | — |  |  | 536 |  |  | — |
Corporate debt | 43,573 |  |  | — |  |  | 43,573 |  |  | — |  |  | 41,358 |  |  | — |  |  | 41,358 |  |  | — |
ABS and other | 8,808 |  |  | — |  |  | 8,808 |  |  | — |  |  | 5,986 |  |  | — |  |  | 5,986 |  |  | — |
| $ | 70,493 |  |  | $ | 17,582 |  |  | $ | 52,911 |  |  | $ | — |  |  | $ | 68,595 |  |  | $ | 20,715 |  |  | $ | 47,880 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | $ | 7,043 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,043 |  |  | $ | 7,067 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,067 |
Deferred consideration | $ | 3,833 |  |  | $ | — |  |  | $ | 3,833 |  |  | $ | — |  |  | $ | 5,119 |  |  | $ | — |  |  | $ | 5,119 |  |  | $ | — |
Deferred compensation liability | $ | 7,718 |  |  | $ | 7,718 |  |  | $ | — |  |  | $ | — |  |  | $ | 6,661 |  |  | $ | 6,661 |  |  | $ | — |  |  | $ | — |
(1) | Included in cash, cash equivalents, and restricted cash on the accompanying condensed consolidated balance sheets.
There were no transfers in or out of Level 3 during the three months ended March 31, 2023 and 2022. During the three months ended March 31, 2023, the Company considered current and future interest rates and the probability of achieving EBITDA and other performance targets in its determination of fair value for the contingent consideration. The Company is uncertain as to the extent of the volatility in the unobservable inputs in the foreseeable future. Deferred consideration in connection with acquisitions is carried at fair value and calculated using a discounted cash flow estimate with the only remaining condition on such payments being the passage of time. As of March 31, 2023 and December 31, 2022, contingent and deferred consideration had a maximum undiscounted payment to be settled in cash or stock of $19.6 million and $21.3 million, respectively. Assuming the achievement of the applicable performance criteria and/or service and time requirements, the Company anticipates these payments will be made over the next one to five-year period. Changes in fair value are included in selling, general and administrative expense in the condensed consolidated statements of operations. A reconciliation of contingent consideration measured at fair value on a recurring basis consisted of the following (in thousands):
| Three Months Ended March 31,
| 2023 |  | 2022
Beginning balance | $ | 7,067 |  |  | $ | 9,312 |
Contingent consideration in connection with acquisitions | — |  |  | — |
Change in fair value of contingent consideration | 226 |  |  | 51 |
Payments of contingent consideration | (250) |  |  | — |
Ending balance | $ | 7,043 |  |  | $ | 9,363 |
Quantitative information about the valuation technique and significant unobservable inputs used in the valuation of the Company’s Level 3 financial liabilities measured at fair value on a recurring basis consisted of the following (dollars in thousands):
| Fair Value at March 31, 2023 |  | Valuation Technique |  | Unobservable inputs |  | Range (Weighted Average)(1)
Contingent consideration | $ | 7,043 |  |  | Discounted cash flow |  | Expected life of cash flows |  | 0.2-4.6 years |  | (2.4 years)
|  |  |  |  | Discount rate |  | 6.0%-6.7% |  | (6.3%)
|  |  |  |  | Probability of achievement |  | 0.0%-100.0% |  | (94.9%)
| Fair Value at December 31, 2022 |  | Valuation Technique |  | Unobservable inputs |  | Range (Weighted Average)(1)
Contingent consideration | $ | 7,067 |  |  | Discounted cash flow |  | Expected life of cash flows |  | 0.4-4.8 years |  | (2.7 years)
|  |  |  |  | Discount rate |  | 6.0%-7.0% |  | (6.5)%
|  |  |  |  | Probability of achievement |  | 0.0%-100.0% |  | (95.4)%
(1) | Unobservable inputs were weighted by the relative fair value of the instruments.
Nonrecurring Fair Value Measurements In accordance with U.S. GAAP, from time to time, the Company measures certain assets at fair value on a nonrecurring basis. The Company reviews the carrying value of intangibles, goodwill and other assets for indications of impairment at least annually. When indications of potential impairment are identified, the Company may be required to determine the fair value of those assets and record an adjustment for the carrying amount in excess of the fair value determined. Any fair value determination would be based on valuation approaches, which are appropriate under the circumstances and utilize Level 2 and Level 3 measurements as required.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration