Marketable Securities

9 Months Ended

Sep. 25, 2021

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

(3) 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 1Observable inputs such as quoted prices in active markets for identical assets or liabilities;

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

Level 3Unobservable 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 highly liquid equity securities, for which quoted market prices are available. The Company’s municipal bond portfolio is valued using Level 2 inputs. The Company’s 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 which includes 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. Interest, dividends and unrealized gains and losses on equity securities are recognized in “Investment income (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $215 thousand in the thirteen weeks ended September 25, 2021, which included an unrealized loss in equity securities of $381 thousand. In the thirteen weeks ended September 26, 2020, the Company recognized investment income of $680 thousand, which included an unrealized gain in equity securities of $120 thousand. In the thirty-nine weeks ended September 25, 2021, the Company recognized investment income of $1.4 million, which included unrealized loss in equity securities of $463 thousand. In the thirty-nine weeks ended September 26, 2020, the Company recognized investment losses of $196 thousand, which included unrealized losses in equity securities of $1.9 million.

Marketable securities, as of September 25, 2021 and December 26, 2020, consisted of:

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
September 25, 2021	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	6,947
Level 2
Corporate and municipal bonds	$	106,904	$	4,923	$	(1,290)		110,537
	$	106,904	$	4,923	$	(1,290)	$	117,484

			Gross		Gross
(amounts 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

Maturities of marketable securities classified as available-for-sale at September 25, 2021, were as follows:

	Amortized		Fair
(amounts in thousands)	Cost		Value
Available-for-sale:
Due within one year	$	7,948	$	8,021
Due after one year through five years		52,149		54,463
Due after five years through ten years		46,807		48,053
	$	106,904	$	110,537

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 (loss) and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $401 thousand in the thirteen weeks ended September 25, 2021, and investment income of $1.2 million in the same period in 2020. The Company recognized investment income of $3.0 million and investment income of $1.2 million in the thirty-nine weeks ended September 25, 2021, and September 26, 2020, respectively. The changes in the underlying liability to the associates are recorded in “Other income (expense).”