Fair Value Measurements

9 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurements

As of June 30, 2020 and September 30, 2019, the fair values of cash and cash equivalents, accounts receivable and accounts payable approximate carrying values due to the short maturity of these items.

The Company measures the fair value of pension plan assets and liabilities, deferred compensation plan assets and liabilities on a recurring basis pursuant to ASC Topic No. 820, Fair Value Measurement. ASC Topic No. 820 establishes a three‑tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1: Quoted prices for identical instruments in active markets.

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model‑derived valuations whose inputs are observable or whose significant value driver is observable.

Level 3: Unobservable inputs in which little or no market data is available, therefore requiring an entity to develop its own assumptions.

The following table presents the Company’s financial assets and liabilities at fair value. The fair values related to the pension plan assets are determined using net asset value (“NAV”) as a practical expedient, or by information categorized in the fair value hierarchy level based on the inputs used to determine fair value. The reported carrying amounts of deferred compensation plan assets and liabilities and debt approximate their fair values. The Company uses interest rates and other relevant information generated by market transactions involving similar instruments to fair value these assets and liabilities, therefore all are classified as Level 2 within the valuation hierarchy.

	Net Asset Value		Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
As of June 30, 2020
Assets:
Pension plan
Cash	$	—	$	14,207	$	—		$	—
Government Securities	2,846		—		—			—
Liability Driven Investment	5,603		—		—			—
Guernsey Unit Trust	1,000		—		—			—
Global Absolute Return	1,935		—		—			—
Deferred compensation plan assets
Trust Assets	—		6		—			—
Insurance	—		—		18,654			—
Foreign currency forward contracts	—		—		305			—
Liabilities:
Pension plan	—		—		(43,981		)	—
Deferred compensation plan liabilities	—		—		(19,960		)	—
Long‑term debt	—		—		(854,885		)	—
Interest rate swap	—		—		(3,258		)	—
Foreign currency forward contracts	—		—		(411		)	—
Earn-outs related to acquisitions	—		—		—			(91		)
Option and Purchase Right	—		—		—			(7,167		)
As of September 30, 2019
Assets:
Pension plan
Cash	$	—	$	14,607	$	—		$	—
Government Securities	4,703		—		—			—
Liability Driven Investment	3,261		—		—			—
Guernsey Unit Trust	997		—		—			—
Global Absolute Return	1,957		—		—			—
Deferred compensation plan assets
Trust Assets	—		16		—			—
Insurance	—		—		18,684			—
Interest rate cap	—		—		19			—
Foreign currency forward contracts	—		—		278			—
Liabilities:
Pension plan	—		—		(42,948		)	—
Deferred compensation plan liabilities	—		—		(21,318		)	—
Long‑term debt	—		—		(979,357		)	—
Foreign currency forward contracts	—		—		(154		)	—
Earn-outs related to acquisitions	—		—		—			(1,545		)

The pension plan assets and liabilities and deferred compensation plan assets and liabilities are included in Other non‑current assets and Other non‑current liabilities at June 30, 2020 and September 30, 2019.

The Company records contingent consideration arrangements at fair value on a recurring basis and the associated balances presented as of June 30, 2020 and September 30, 2019 are earn-outs related to acquisitions. The fair value of earn-outs related to acquisitions is based on significant unobservable inputs including the achievement of certain performance

metrics. Significant changes in these inputs would result in corresponding increases or decreases in the fair value of the earn-out each period until the related contingency has been resolved. Changes in the fair value of the contingent consideration obligations can result from adjustments in the probability of achieving future development steps, sales targets and profitability and are recorded in General and administrative expenses in the Unaudited Consolidated Statements of Operations.

A roll-forward of the activity in the Company’s fair value of earn-outs related to acquisitions is as follows:

	Current Portion (1)			Long-term Portion (2)			Total
Balance at September 30, 2019	$	611		$	934		$	1,545
Payments	(187		)	—			(187		)
Fair value adjustment	(333		)	(934		)	(1,267		)
Balance at June 30, 2020	$	91		$	—		$	91

(1) Included in Accrued expenses and other liabilities on the Consolidated Balance Sheets.

(2) Included in Other non‑current liabilities on the Consolidated Balance Sheets.

Pursuant to the acquisition of Frontier, the Company recorded a liability for the Option and Purchase Right
to purchase the remaining 40% interest. The fair value of the options is based upon significant unobservable inputs including future earnings and other market factors. Significant changes in these inputs would result in corresponding increases or decreases in the fair value of the options each period until the purchase of the remaining 40% interest has occurred. Changes in the fair value can result from earnings achieved over the passage of time and will be recorded in Interest expense in the Unaudited Consolidated Statements of Operations. As of June 30, 2020, $506 is included in Accrued expenses and other liabilities related to the Option and $6,661 is included in Other non‑current liabilities related to the Purchase Right on the Consolidated Balance Sheets.