XML 32 R19.htm IDEA: XBRL DOCUMENT

Note 10 - Derivatives

12 Months Ended

Dec. 31, 2023

10.

Derivatives

On February 28, 2023, the Company entered into an interest rate swap contract to improve the predictability of cash flows from interest payments related to its variable, SOFR-based debt. The swap contract has a notional amount of $27.4 million as of December 31, 2023, and matures on December 22, 2025. This swap contract effectively converts the SOFR-based variable portion of the interest payable under the Credit Agreement into fixed-rate debt at an annual rate of 4.75%. The swap contract does not impact the additional interest related to the applicable interest rate margin as discussed above in Note 9, Long-Term Debt. The swap contract is considered an effective cash flow hedge, and as a result, net gains or losses are reported as a component of OCI in the consolidated financial statements and are reclassified as net income when the underlying hedged interest impacts earnings. An assessment is performed quarterly to evaluate the ongoing hedge effectiveness.

The following table presents the notional amount and fair value of the Company’s derivative instrument as of December 31, 2023:

(in thousands)		December 31, 2023
Derivatives Instruments	Balance Sheet Classification	Notional Amount		Fair Value (a)
Interest rate swap	Other long-term liabilities	$	27,375	$	(199	)

(a) See Note 11 for the fair value measurements related to this financial instrument.

The following table summarizes the effect of derivatives designated as cash flow hedging instruments for the year ended December 31, 2023:

	Year Ended
Derivatives Qualifying as Hedges, net of tax (in thousands)	December 31, 2023
Amount of loss recognized in OCI on derivatives (effective portion)	$	199
Amounts reclassified from accumulated other comprehensive loss to interest expense		120