Fair Value Measurements

6 Months Ended

Jun. 28, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements

6. Fair Value Measurements

ASC 820, “Fair Value Measurements,” establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the third is considered unobservable:

•Level 1: Quoted prices for identical assets or liabilities in active markets which the Company can access

•Level 2: Observable inputs other than those described in Level 1

•Level 3: Unobservable inputs

Current Assets and Liabilities

The Company’s cash equivalents are highly liquid investments with original maturities of three months or less, which represent assets measured at fair value on a recurring basis. The Company determines the fair value of cash equivalents using a market approach based on quoted prices in active markets. The fair values of cash equivalents, accounts receivable, income taxes receivable, accounts payable, income taxes payable and accrued expenses and other current liabilities approximate their carrying values because of their short-term nature.

Foreign Currency Contracts

The Company addresses market risks from changes in foreign currency exchange rates through a risk management program that includes the use of derivative financial instruments to mitigate certain balance sheet foreign currency transaction exposures. The Company uses foreign currency forward contracts as a part of its strategy to manage exposures related to foreign currency denominated monetary assets and liabilities. The fair value of these foreign currency forward contracts is reported either in other current assets or in other current liabilities as of the end of the period.

Summary by Fair Value Hierarchy

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of June 28, 2024 (in thousands):

			Quoted Prices in				Significant Other
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	623	$	623	$	—	$	—
Prepaid expenses and other current assets:
Foreign currency forward contracts		1		—		1		—
	$	624	$	623	$	1	$	—
Liabilities
Accrued expenses and other current liabilities:
Contingent considerations - Current	$	46	$	—	$	—	$	46
Foreign currency forward contracts		406		—		406		—
Other liabilities:
Contingent considerations - Long-term		301		—		—		301
	$	753	$	—	$	406	$	347

The following table summarizes the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 (in thousands):

			Quoted Prices in				Significant Other
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	1,392	$	1,392	$	—	$	—
Prepaid expenses and other current assets:
Foreign currency forward contracts		379		—		379		—
	$	1,771	$	1,392	$	379	$	—
Liabilities
Accrued expenses and other current liabilities:
Contingent considerations - Current	$	48	$	—	$	—	$	48
Foreign currency forward contracts		312		—		312		—
Other liabilities:
Contingent considerations - Long-term		311		—		—		311
	$	671	$	—	$	312	$	359

Changes in the fair value of Level 3 contingent considerations during the six months ended June 28, 2024 were as follows (in thousands):

	Amount
Balance at December 31, 2023	$	359
Payments		—
Fair value adjustments		—
Effect of foreign exchange rates		(12	)
Balance at June 28, 2024	$	347

See Note 10 to Consolidated Financial Statements for a discussion of the estimated fair value of the Company’s outstanding debt.