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Note 4 - Fair Value Measurements
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

4.

Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date.

 

The authoritative guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. These levels are: Level 1 (inputs are quoted prices in active markets for identical assets or liabilities); Level 2 (inputs are other than quoted prices that are observable, either directly or indirectly through corroboration with observable market data); and Level 3 (inputs are unobservable, with little or no market data that exists, such as internal financial forecasts). The Company is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

 

The following table summarizes information regarding the Company’s financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

 

  

Total

  

Level 1

  

Level 2

  

Level 3

 

As of June 30, 2025

                

Financial assets:

                

Deferred compensation plan

 $3,655  $3,278  $377  $- 

Foreign currency forward contracts

  18   -   18   - 

Interest rate swaps

  83   -   83   - 

Total financial assets

 $3,756  $3,278  $478  $- 
                 

Financial liabilities:

                

Foreign currency forward contracts

 $(384) $-  $(384) $- 
                 

As of December 31, 2024

                

Financial assets:

                

Deferred compensation plan

 $3,784  $3,282  $502  $- 

Foreign currency forward contracts

  143   -   143   - 

Interest rate swaps

  187   -   187   - 

Total financial assets

 $4,114  $3,282  $832  $- 
                 

Financial liabilities:

                

Foreign currency forward contracts

 $(6) $-  $(6) $- 

Interest rate swaps

  (88)  -   (88)  - 

Total financial liabilities

 $(94) $-  $(94) $- 

 

The deferred compensation plan assets consist of cash and several publicly traded stock and bond mutual funds, valued using quoted market prices in active markets, classified as Level 1 within the fair value hierarchy, as well as guaranteed investment contracts, valued at principal plus interest credited at contract rates, classified as Level 2 within the fair value hierarchy. Deferred compensation plan assets are included within Other assets in the Condensed Consolidated Balance Sheets.

 

The foreign currency forward contracts and interest rate swaps are derivatives valued using various pricing models or discounted cash flow analyses that incorporate observable market parameters, such as interest rate yield curves and currency rates, and are classified as Level 2 within the fair value hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or the Company. The foreign currency forward contracts and interest rate swaps are presented at their gross fair values. The current portion of foreign currency forward contract and interest rate swap assets are included within Prepaid expenses and other and foreign currency forward contract liabilities are included within Accrued liabilities in the Condensed Consolidated Balance Sheets. The noncurrent portion of interest rate swap assets are included within Other assets in the Condensed Consolidated Balance Sheets.

 

The net carrying amounts of cash and cash equivalents, trade and other receivables, accounts payable, and accrued liabilities approximate fair value due to the short-term nature of these instruments. The net carrying amount of the borrowings on the line of credit approximates fair value due to its variable interest rate based on current market rates. The Company is obligated to repay the carrying value of its long-term debt. The fair value of the Company’s long-term debt is calculated using interest rates for its existing debt arrangements which are classified as Level 2 inputs within the fair value hierarchy. As of June 30, 2025, the fair value of the Company’s long-term debt approximates the carrying value due to its variable interest rate based on current market rates.