Fair Value Measurements

6 Months Ended

Jun. 27, 2025

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 reporting period.

Contingent Considerations

On April 8, 2025, the Company completed the acquisition of Keonn. Pursuant to the purchase and sale agreement, the former shareholders of Keonn (the “Sellers”) are eligible to receive contingent consideration based on the achievement of specified revenue targets by Keonn during fiscal years 2025 through 2027. Payment of this contingent consideration is also subject to Keonn maintaining certain minimum gross margin percentage during the applicable periods. The undiscounted range of potential contingent consideration is between €0 and €20.0 million (approximately $21.9 million). If the performance conditions are met, the contingent consideration will be payable annually, with the first payment due in the second quarter of 2026. As of the acquisition date, the estimated fair value of the contingent consideration was €4.1 million (approximately $4.5 million), determined using the Monte Carlo valuation method. This amount was recorded as part of the purchase price. Subsequent changes in the estimated fair value are recognized in the consolidated statement of operations in restructuring, acquisition, and related costs until the liability is fully settled. There have been no changes in the fair value of the contingent consideration since the acquisition date.

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 27, 2025 (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
Prepaid expenses and other current assets:
Foreign currency forward contracts	$	200	$	—	$	200	$	—
	$	200	$	—	$	200	$	—
Liabilities
Accrued expenses and other current liabilities:
Contingent considerations - Current	$	4,461	$	—	$	—	$	4,461
Contingent considerations - Long term		458		—		—		458
Foreign currency forward contracts		302		—		302		—
	$	5,221	$	—	$	302	$	4,919

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, 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
Prepaid expenses and other current assets:
Foreign currency forward contracts	$	1,226	$	—	$	1,226	$	—
	$	1,226	$	—	$	1,226	$	—
Liabilities
Accrued expenses and other current liabilities:
Contingent considerations - Current	$	57	$	—	$	—	$	57
Foreign currency forward contracts		1,401		—		1,401		—
	$	1,458	$	—	$	1,401	$	57

Changes in the fair value of Level 3 contingent considerations during the six months ended June 27, 2025 were as follows (in thousands):

	Amount
Balance at December 31, 2024	$	57
Acquisition of Keonn		4,537
Payments		—
Fair value adjustments		—
Effect of foreign exchange rates		325
Balance at June 27, 2025	$	4,919

The following table provides qualitative information associated with the fair value measurement of the Company’s Level 3 liabilities:

Liability	June 27, 2025 Fair Value (in thousands)	Valuation Technique	Unobservable Inputs	Percentage Applied
Contingent consideration (Keonn)	$4,856	Monte Carlo method	Historical and projected revenue from fiscal year 2025 to 2027	N/A
			Gross Profit Premium	8.8%
			Revenue risk premium	8.0%
			Gross Profit Volatility	44.0%
			Revenue Volatility	40.0%
			Credit spread	3.6%

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