Note 6 - Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. FAIR VALUE MEASUREMENTS

The following tables show the Company's cash, cash equivalents and other marketable and held to maturity securities by significant investment category as of December 31, 2024 and 2023:

	December 31, 2024
	Carrying value		Fair value		Cash and cash equivalents		Other Current Assets
Cash	$	66,917	$	66,917	$	66,917	$	-
Level 1:
Money market funds		1		1		1		-
Money market funds (Rabbi Trust)		566		566		-		566
Subtotal		567		567		1		566
Level 2:
Certificates of deposit and time deposits		2,938		3,348		1,335		1,602
Subtotal		2,938		3,348		1,335		1,602
Total	$	70,422	$	70,832	$	68,253	$	2,168

	December 31, 2023
	Carrying value		Fair value		Cash and cash equivalents		Other Current Assets
Cash	$	57,544	$	57,544	$	57,544	$	-
Level 1:
Money market funds		31,188		31,188		31,188		-
Money market funds (Rabbi Trust)		303		303		-		303
Subtotal		31,491		31,491		31,188		303
Level 2:
Certificates of deposit and time deposits		3,629		3,926		639		2,990
Subtotal		3,629		3,926		639		2,990
Total	$	92,664	$	92,961	$	89,371	$	3,293

As of December 31, 2024 and 2023, our available-for-sale securities primarily consisted of investments held in a rabbi trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations. These securities are measured at fair value using quoted prices in active markets for identical assets (Level 1) inputs and amounted to $0.6 million at December 31, 2024 and $0.3 million at December 31, 2023. 

Throughout 2024 and 2023, the Company entered into a series of foreign currency forward contracts, the fair value of which was ($1.0) million at  December 31, 2024 and $0.5 million at December 31, 2023. The estimated fair value of foreign currency forward contracts is based on quotes received from the applicable counterparty, and represents the estimated amount we would receive or pay to settle the contracts, taking into consideration current exchange rates which can be validated through readily observable data from external sources (Level 2).

The Company is a party to two interest rate swap agreements as further described in Note 13, "Derivative Instruments and Hedging Activities". The fair value of the interest rate swap agreements was $2.7 million and $4.0 million at December 31, 2024 and 2023, respectively, which was based on data received from the counterparty, and represents the estimated amount we would receive or pay to settle the agreements, taking into consideration current and projected future interest rates as well as the creditworthiness of the parties, all of which can be validated through readily observable data from external sources.

The fair values of our derivative financial instruments (which are measured using Level 2 fair value inputs) and their classifications in our consolidated balance sheets as of December 31, 2024 and 2023 were as follows:

	Balance Sheet Classification	December 31, 2024		December 31, 2023
Derivative assets:
Foreign currency forward contracts:
Designated as cash flow hedges	Other current assets	$	-	$	-
Non designated as hedging instruments	Other current assets		-		486
Interest rate swap agreements:
Designated as a cash flow hedge	Other assets		2,730		3,960
Total derivative assets		$	2,730	$	4,446
Derivative liabilities:
Foreign currency forward contracts:
Designated as cash flow hedges	Other current liabilities	$	116	$	5
Not designated as hedging instruments	Other current liabilities		919		-
Total derivative liabilities		$	1,035	$	5

In connection with the acquisition of Enercon as further described in Note 3, "Acquisition and Divestiture", the Sellers are eligible to receive an earnout payment based on the achievement of certain financial metrics in 2025 and 2026. As this contingent consideration will be settled in cash by Bel if the related metrics are achieved, this contingent consideration has been classified as a liability on the accompanying balance sheet at December 31, 2024. The earnout liabilities were initially recorded at a fair value of $3.3 million at the acquisition date, with subsequent remeasurement to fair value at December 31, 2024 calculated using Level 3 unobservable inputs. At December 31, 2024, inputs to the valuation approach for the contingent earnout liabilities include the Company's forecasted Enercon EBITDA (as defined under the terms of the Purchase Agreement) for each of 2025 and 2026, an estimated EBITDA volatility measure of 52.1%, an expected term of 2 years and a discount rate on the earnout payments of 6.66%. The fair value of the earnout liabilities as of December 31, 2024 and 2023 were as follows:

		Level 3
	Balance Sheet Classification	December 31, 2024		December 31, 2023
Contingent Liabilities:
Earnout payment liability - 2025	Other current liabilities	$	2,041	$	-
Earnout payment liability - 2026	Other long-term liabilities		1,446		-
		$	3,487	$	-

Aside from the earnout liability described above, the Company does not have any other financial assets measured at fair value on a recurring basis categorized as Level 3, and there were no transfers in or out of Level 1, Level 2 or Level 3 during 2024 or 2023. There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during 2024.

During 2024, in connection with the Company's annual impairment test of indefinite-lived intangible assets, the Company adjusted the carrying value associated with the CUI tradename to fair value. Aside from this item, there were no other financial assets accounted for at fair value on a nonrecurring basis as of  December 31, 2024 or  December 31, 2023.

The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company’s long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities. At December 31, 2024 and 2023, the estimated fair value of total debt was $286.6 million and $60.0 million, respectively, compared to a carrying amount of $287.5 million and $60.0 million, respectively. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of December 31, 2024.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment upon the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. See Note 5, "Goodwill and Other Intangible Assets," for further information about goodwill and other indefinite-lived intangible assets.