Fair Value Measurements

9 Months Ended

Jun. 30, 2021

Fair Value Measurements

As of June 30, 2021 and September 30, 2020, 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, 2021
Assets:
Pension plan
Cash	$	—	$	448	$	—	$	—
Global Multi-Asset Fund	15,303		—		—		—
Government Securities	2,557		—		—		—
Liability Driven Investment	5,930		—		—		—
Guernsey Unit Trust	2,381		—		—		—
Global Absolute Return	2,275		—		—		—
Deferred compensation plan assets
Cash	—		1,240		—		—
Mutual Funds	—		17,964		—		—
Interest rate swaps	—		—		2,443		—

Foreign currency forward contracts	—		—		59		—
Liabilities:
Pension plan	—		—		(48,524)		—
Deferred compensation plan liabilities	—		—		(23,980)		—
Long‑term debt	—		—		(799,922)		—
Interest rate swap	—		—		(376)		—
Foreign currency forward contracts	—		—		(120)		—
Commodity swaps					(16)
Earn-outs related to acquisitions	—		—		—		(1,056)
Purchase Right	—		—		—		(6,249)

As of September 30, 2020
Assets:
Pension plan
Cash	$	—	$	15,061	$	—	$	—
Government Securities	4,924		—		—		—
Liability Driven Investment	3,604		—		—		—
Guernsey Unit Trust	1,881		—		—		—
Global Absolute Return	2,060		—		—		—
Deferred compensation plan assets
Trust Assets	—		55		—		—
Insurance	—		—		19,804		—

Foreign currency forward contracts	—		—		140		—
Liabilities:
Pension plan	—		—		(47,389)		—
Deferred compensation plan liabilities	—		—		(21,439)		—
Long‑term debt	—		—		(872,441)		—
Interest rate swap	—		—		(4,669)		—
Foreign currency forward contracts	—		—		(47)		—
Earn-outs related to acquisitions	—		—		—		(295)
Option and Purchase Right	—		—		—		(7,739)

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, 2021 and September 30, 2020. The unrealized gain on mutual funds was $532 at June 30, 2021.

The Company records contingent consideration arrangements at fair value on a recurring basis, and the associated balances presented as of June 30, 2021 and September 30, 2020 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. During the three and nine months ended June 30, 2021, the Company recorded a liability of $761 associated with an earn-out related to the WCSI acquisition, which is included in Accrued expenses and other liabilities on the Consolidated Balance Sheets. There were no other changes in the fair value of earn-outs related to acquisitions. As of June 30, 2021 and September 30, 2020, earn-outs related to acquisitions totaled $1,056 and are included in Accrued expenses and other 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 these 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 these options each period until the purchase of the remaining 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. There were no changes in the fair value of the Option and Purchase Right recorded during the three and nine months ended June 30, 2021. The Minority Owners exercised the Option, and on April 8, 2021 the Company completed the purchase of an additional 8% of the outstanding equity in Frontier for approximately $1,490. As of June 30, 2021 and September 30, 2020, $6,249 and $7,739, respectively, is included in Other non‑current liabilities related to the Purchase Right on the Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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