Marketable Securities

6 Months Ended

Jun. 29, 2024

Marketable Securities.

Marketable Securities

(3) Marketable Securities

The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Condensed Consolidated Balance Sheets. The 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 bond and commercial paper portfolio is 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 and commercial paper portfolio throughout the life of each bond and commercial paper held. Unrealized gains and losses on debt securities are recognized in “Accumulated other comprehensive income (loss)” on the Company’s Condensed Consolidated Balance Sheets. 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 Condensed Consolidated Statements of Income. The Company recognized investment gain of $3.7 million in the thirteen weeks ended June 29, 2024, which included an unrealized gain in equity securities of $151 thousand. In the thirteen weeks ended July 1, 2023, the Company recognized investment income of $1.6 million, which included an unrealized loss in equity securities of $703 thousand. In the twenty-six weeks ended June 29, 2024, the Company recognized investment income of $7.8 million, which included an unrealized gain in equity securities of $385 thousand. In the twenty-six weeks ended July 1, 2023, the Company recognized investment income of $4.2 million, which included unrealized losses in equity securities of $378 thousand.

Marketable securities, as of June 29, 2024 and December 30, 2023, consisted of:

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
June 29, 2024	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	5,296
Level 2
Corporate and municipal bonds	$	168,440	$	3,371	$	(6,943)		164,867
Commercial Paper		63,344		1,642		—		64,986
Total	$	231,784	$	5,013	$	(6,943)	$	235,149

			Gross		Gross
(amounts in thousands)	Amortized		Unrealized		Unrealized		Fair
December 30, 2023	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	4,910
Level 2
Corporate and municipal bonds	$	177,972	$	3,853	$	(6,553)		175,272
Commercial paper		44,732		1,076		—		45,808
Total	$	222,704	$	4,929	$	(6,553)	$	225,991

Maturities of marketable securities classified as available-for-sale at June 29, 2024, were as follows:

	Amortized		Fair
(amounts in thousands)	Cost		Value
Available-for-sale:
Due within one year	$	110,727	$	113,142
Due after one year through five years		63,813		60,815
Due after five years through ten years		15,030		13,988
Due after ten years		42,214		41,908
Total	$	231,784	$	229,853

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 Condensed 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 Condensed Consolidated Statements of Income. The Company recognized investment income of $407 thousand and $915 thousand in the thirteen weeks ended June 29, 2024 and July 1, 2023, respectively. The Company recognized investment income of $1.8 million and $2.2 million in the twenty-six weeks ended June 29, 2024 and July 1, 2023, respectively. The changes in the underlying liability to the associates are recorded in “Other income (expense).”