Marketable Securities

12 Months Ended

Dec. 26, 2020

Marketable Securities [Abstract]

Marketable Securities

Note 2    Marketable Securities

The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Consolidated Balance Sheets. FASB has established three levels of inputs that may be used to measure fair value:

Level 1 Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2 Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and

Level 3 Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s marketable securities valued using Level 1 inputs include three public company equity securities, for which quoted market prices are available. The Company’s bond portfolio is valued using Level 2 inputs. The Company’s corporate and municipal bonds are valued using a combination of pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models utilizing observable inputs, which are considered Level 2 inputs.

For Level 2 investment valuation, the Company utilizes standard pricing procedures of its investment advisory firm(s), which include various third-party pricing services. These procedures also require specific price monitoring practices as well as pricing review reports, valuation oversight and pricing challenge procedures to maintain the most accurate representation of investment fair market value.

The Company accrues interest on its bond portfolio throughout the life of each bond held. Dividends from the equity securities are recognized as received. Both interest and dividends are recognized in “Investment income and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $536 thousand, $4.1 million and investment loss of $234 thousand which included an unrealized loss in equity securities of $1.8 million, an unrealized gain in equity securities of $2.0 million and an unrealized loss in equity securities of $1.6 million in the fiscal years ended December 26, 2020, December 28, 2019 and December 29, 2018, respectively.

Marketable securities, as of December 26, 2020 and December 28, 2019, consisted of:

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
December 26, 2020	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,410
Level 2
Corporate and municipal bonds	$	99,861	$	5,723	$	(1,139)		104,445
	$	99,861	$	5,723	$	(1,139)	$	111,855

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
December 28, 2019	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	9,201
Level 2
Corporate and municipal bonds	$	52,264	$	2,091	$	(18)		54,337
	$	52,264	$	2,091	$	(18)	$	63,538

Maturities of marketable securities classified as available-for-sale at December 26, 2020, were as follows:

		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	9,146	$	9,233
Due after one year through five years		44,030		45,788
Due after five years through ten years		46,685		49,424
	$	99,861	$	104,445

Note 2    Marketable Securities (continued)

SERP Investments

The Company also maintains a non-qualified supplemental executive retirement plan for certain of its associates which allows them to defer income to future periods. Participants in the plans earn a return on their deferrals based on mutual fund investments. The Company chooses to invest in the underlying mutual fund investments to offset the liability associated with the non-qualified deferred compensation plans. Such investments are reported on the Company’s Consolidated Balance Sheets as “SERP investment,” are classified as trading securities and are measured at fair value using Level 1 inputs with gains and losses included in “Investment income and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $3.3 million, $3.0 million, and investment loss of $931 thousand in fiscal years ended December, 26, 2020, December 28, 20219, and December 29, 2018 The changes in the underlying liability to the associates are recorded in “Other income (expense).”