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Fair Value of Financial Assets and Liabilities | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Value of Financial Assets and Liabilities | Note 12 – Fair Value of Financial Assets and Liabilities The Company measures and records certain assets and liabilities at fair value. A fair value hierarchy is used for those assets and liabilities measured at fair value that distinguishes between assumptions based on market data (observable inputs), and the Company’s assumptions (unobservable inputs). The hierarchy consists of the following three levels: Level 1 Inputs – Quoted market prices in active markets for identical assets or liabilities. Level 2 Inputs – Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 Inputs – Unobservable inputs that are not corroborated by market data. The following table summarizes the Company’s assets and liabilities, recorded and measured at fair value, in the Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022:
Description |  | Balance as of September 30, 2023 |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 230 |  |  | $ | — |  |  | $ | 230 |  |  | $ | — |
Total assets |  | $ | 230 |  |  | $ | — |  |  | $ | 230 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 69 |  |  | $ | — |  |  | $ | 69 |  |  | $ | — |
Supplemental profit sharing plan |  |  | 7,494 |  |  |  | — |  |  |  | 7,494 |  |  |  | — |
Total liabilities |  | $ | 7,563 |  |  | $ | — |  |  | $ | 7,563 |  |  | $ | — |
Description |  | Balance as of December 31, 2022 |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 534 |  |  | $ | — |  |  | $ | 534 |  |  | $ | — |
Total assets |  | $ | 534 |  |  | $ | — |  |  | $ | 534 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 81 |  |  | $ | — |  |  | $ | 81 |  |  | $ | — |
Supplemental profit sharing plan |  |  | 7,299 |  |  |  | — |  |  |  | 7,299 |  |  |  | — |
Total liabilities |  | $ | 7,380 |  |  | $ | — |  |  | $ | 7,380 |  |  | $ | — |
The Company operates internationally and enters into intercompany transactions denominated in foreign currencies. Consequently, the Company is subject to market risk arising from exchange rate movements between the dates foreign currency transactions occur and the dates they are settled. The Company currently uses foreign currency forward contracts to reduce the risk related to some of these transactions. These contracts usually have maturities of 90 days or less and generally require an exchange of foreign currencies for U.S. dollars at maturity at rates stated in the contracts. These contracts are not designated as hedging instruments under U.S. GAAP. Accordingly, the changes in the fair value of the foreign currency forward contracts are recognized in each accounting period in Other operating (income) expense, net on the Consolidated Statements of Income together with the transaction gain or loss from the related balance sheet position. For the three and nine months ended September 30, 2023, the Company recognized net losses o f $0.5 million and $0.9 million, respectively, on foreign currency forward contracts. For the three and nine months ended September 30, 2022, the Company recognized net gains of $1.2 million and $0.2 million, respectively, on foreign currency forward contracts. The derivative financial instrument contracts are with major investment grade financial institutions, and we do not anticipate any material non-performance by any of the counterparties. The Company has a non-qualified Supplemental Profit Sharing Plan for its executives. The liability for this unfunded Supplemental Profit Sharing Plan was $7.5 million at September 30, 2023 and was $7.3 million at December 31, 2022. These amounts are recorded within Other noncurrent liabilities on the Company’s Consolidated Balance Sheets. The Supplemental Profit Sharing Plan allows participants the ability to hypothetically invest their proportionate award into various investment options, which primarily includes mutual funds. The Company credits earnings, gains and losses to the participants’ deferred compensation account balances based on the investments selected by the participants. The Company measures the fair value of the Supplemental Profit Sharing Plan liability using the market values of the participants’ underlying investment accounts. The carrying value of the Company’s current financial instruments, which include cash, cash equivalents and restricted cash, accounts receivable, accounts payable and short-term debt, approximates fair value because of the short-term maturity of these instruments. At September 30, 2023 and December 31, 2022, the fair value of the Company’s long-term debt was estimated using a discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements that are considered to be Level 2 inputs. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt are as follows:
|  | September 30, 2023 |  |  | December 31, 2022 |
|  | Fair Value |  |  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |
Long-term debt and related current maturities |  | $ | 46,075 |  |  | $ | 51,949 |  |  | $ | 68,054 |  |  | $ | 71,438 |

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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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