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Note 7 - Employee Benefit Plans
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Retirement Benefits [Text Block]

7.

Employee Benefit Plans

 

Employee Retirement Savings Plans

 

The Company sponsors various qualified employee retirement savings plans and makes discretionary contributions to match a certain portion of employee contributions. The Company contributed $1.1 million to these plans for each of the years ended December 31, 2023 and 2022.

 

Employee Pension Plans

 

The Company’s subsidiary in the United Kingdom, Biochrom Ltd., maintains two defined benefit pension plans for its employees. In 2014, these defined benefit pension plans were closed to new employees, as well as closed to the future accrual of benefits for existing employees. The Company recognizes the funded status of the pension plans as an asset or liability in the consolidated balance sheets. The funded status equals the difference between the fair value of the plan’s assets and their benefit obligations and has historically measured each year as of December 31. The Company records net period benefit expense (credit) as a component of other expense in the Consolidated Statement of Operations.

 

The components of the Company’s net period benefit expense (credit) were as follows:

 

  

Year Ended December 31,

 

(in thousands)

 

2023

  

2022

 

Interest cost

 $670  $371 

Expected return on plan assets

  (788)  (818)

Net amortization loss

  328   27 

Net periodic benefit expense (credit)

 $210  $(420)

 

The following provides a reconciliation of the changes in the plans’ fair value of assets and benefit obligations for the years ended December 31, 2023 and 2022, and a summary of the funded status as of December 31, 2023 and 2022:

 

  

December 31,

 

(in thousands)

 

2023

  

2022

 

Change in fair value of plan assets:

        

Balance at beginning of year

 $15,576  $27,252 

Actual return on plan assets

  351   (9,098)

Employer contributions

  622   619 

Benefits paid

  (563)  (592)

Currency translation adjustment

  954   (2,605)

Balance at end of year

 $16,940  $15,576 

 

  

December 31,

 

(in thousands)

 

2023

  

2022

 

Change in benefit obligation:

        

Balance at beginning of year

 $13,263  $22,562 

Interest cost

  665   371 

Actuarial loss (gain)

  479   (6,912)

Benefits paid

  (563)  (592)

Currency translation adjustment

  819   (2,166)

Balance at end of year

 $14,663  $13,263 

 

  

December 31,

 

(in thousands)

 

2023

  

2022

 

Fair value of plan assets

 $16,940  $15,576 

Benefit obligation

  14,663   13,263 

Net funded status

 $2,277  $2,313 

 

Changes in the actuarial loss (gain) disclosed above are primarily the result of changes in the discount rate and inflation assumptions due to underlying market conditions.

 

The amounts recognized in the consolidated balance sheets consist of:

 

  

December 31,

 

(in thousands)

 

2023

  

2022

 

Other long-term assets

 $2,277  $2,313 

Accumulated other comprehensive loss

  5,909   5,326 

 

The weighted average assumptions used in determining the net pension cost for these plans follows:

 

  

December 31,

 

(in thousands)

 

2023

  

2022

 

Discount rate

  4.6%  5.0%

Expected return on assets

  5.3%  5.0%

 

The discount rate assumptions used for pension accounting reflect the prevailing rates available on high-quality, fixed-income debt instruments with terms that match the average expected duration of the Company’s defined benefit pension plan obligations.

 

The Company’s mix of pension plan investments among asset classes also affects the long-term expected rate of return on plan assets. As of December 31, 2023, the Company’s actual asset mix approximated its target mix. Differences between actual and expected returns are recognized in the calculation of net periodic pension cost over the average remaining expected future working lifetime, which is approximately 7 years for active plan participants.

 

The asset allocations and fair value of the Company’s pension benefits as of December 31, 2023 and 2022, were as follows:

 

(in thousands)

 

2023

  

2022

 

Asset category:

                

Debt securities

 $11,761   69% $11,714   75%

Equity securities

  3,567   21%  3,507   23%

Cash and cash equivalents

  304   2%  185   1%

Other

  1,308   8%  170   1%

Total

 $16,940   100% $15,576   100%

 

(in thousands)

 

2023

  

2022

 

Quoted Prices in Active Markets for Identical Assets (Level 1)

 $304  $185 

Significant Other Observable Inputs (Level 2)

  16,636   15,391 

Significant Other Unobservable Inputs (Level 3)

  -   - 

Total

 $16,940  $15,576 

 

Level 1 assets consist of cash and cash equivalents held in the pension plans. The Level 2 assets primarily consist of investments in private investment funds that are valued using the net asset values provided by the trust or fund, including an insurance contract. Although these funds are not traded in an active market with quoted prices, the investments underlying the net asset value are based on quoted prices.

 

The Company expects to contribute approximately $0.6 million to its pension plans during 2024. The benefits expected to be paid from the pension plans are $0.9 million in 2024, $0.7 million in 2025, $0.8 million in 2026, $1.0 million in 2027 and $0.8 million in 2028. The expected benefits to be paid in the five years from 2029 to 2033 are $5.0 million. The expected benefits are based on the same assumptions used to measure the Company’s benefit obligations at December 31, 2023.