Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Note 6 — Fair Value Measurements

The Company’s current assets and current liabilities are financial instruments and most of these items (other than marketable securities and inventories) are recorded at cost in the Company’s Consolidated Balance Sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. The carrying value of the Company’s line of credit represents the outstanding amount of the borrowings, which approximates fair value. The Company’s financial assets that are measured at fair value on a recurring basis are its marketable securities and deferred compensation funding. The recorded values of all of the financial instruments approximate their current fair values because of their nature, stated interest rates and respective maturity dates or durations. Inventories are measured at the lower of cost or net realizable value.

The Company’s marketable securities primarily consist of tax-exempt municipal bonds, which are classified as available-for-sale and are reported at fair value. Unrealized gains and losses associated with these investments are included in other comprehensive income (net of tax) within the Consolidated Statements of Comprehensive Income. The fair value of these marketable securities is classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable. Such valuations are determined by a third-party pricing service. For the year ended December 31, 2022, the Company recorded unrealized losses, net of taxes of $7.5 million on marketable securities. For the years ended December 31, 2021 and 2020, the Company recorded unrealized losses, net of taxes of $1.6 million and unrealized gains, net of taxes of $2.6 million on marketable securities, respectively.

For the years ended December 31, 2022, 2021 and 2020, the Company received total proceeds, less the amount of interest received, of $10.4 million, $26.7 million and $6.3 million, respectively, from sales of available-for-sale municipal bonds. For both years ended December 31, 2022 and 2020, these sales each resulted in realized losses of less than $0.1 million, and realized gains of $0.1 million for the year ended December 31, 2021. Such gains and losses were recorded in “Investment and other income, net” in the Consolidated Statements of Comprehensive Income. The basis for the sale of these securities was the specific identification of each bond sold during the period.

The investments under the funded deferred compensation plan are accounted for as trading securities and unrealized gains or losses are included in earnings. The fair value of these investments, excluding amounts held in money market accounts, is determined based on quoted market prices (Level 1). The fair value of money market accounts is measured using quoted prices for identical or similar instruments in markets that are not active (Level 2). For the years ended December 31, 2022, 2021 and 2020, the Company recognized unrealized losses of $9.3 million and gains of $6.5 million and $9.5 million, respectively, related to equity securities still held at the respective reporting dates.

As part of a 2021 acquisition of a prepackaged meal manufacturer, the Company agreed to pay royalties to the seller on all future product sales. The Company recorded a liability of $10.6 million as of the acquisition date in 2021 for the expected future payments within "Other long-term liabilities" on the Consolidated Balance Sheets. The fair value of this liability is measured using forecasted sales models (Level 3). For the years ended December 31, 2022 and 2021, the Company recorded realized gains of $2.4 million and $0.1 million, respectively, within "Cost of services provided" in the Consolidated Statements of Comprehensive Income related to the subsequent measurement of the liability at each period end.

The following tables provide fair value measurement information for the Company’s marketable securities and deferred compensation fund investments as of December 31, 2022 and December 31, 2021:


	As of December 31, 2022
					Fair Value Measurement Using:
	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial Assets:
Marketable securities
Municipal bonds — available-for-sale	$	95,200	$	95,200	$	—	$	95,200	$	—

Deferred compensation fund
Money Market 1	$	2,420	$	2,420	$	—	$	2,420	$	—
Commodities	170		170		170		—		—
Fixed Income	3,571		3,571		3,571		—		—
International	4,093		4,093		4,093		—		—
Large Cap Blend	1,210		1,210		1,210		—		—
Large Cap Growth	11,064		11,064		11,064		—		—
Large Cap Value	6,133		6,133		6,133		—		—
Mid Cap Blend	2,667		2,667		2,667		—		—
Real Estate	359		359		359		—		—
Small Cap Blend	3,424		3,424		3,424		—		—
Deferred compensation fund2	$	35,111	$	35,111	$	32,691	$	2,420	$	—


	As of December 31, 2021
					Fair Value Measurement Using:
	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Financial Assets:
Marketable securities
Municipal bonds — available-for-sale	$	114,396	$	114,396	$	—	$	114,396	$	—

Deferred compensation fund
Money Market 1	$	2,882	$	2,882	$	—	$	2,882	$	—
Balanced and Lifestyle	12,578		12,578		12,578		—		—
Large Cap Growth	20,358		20,358		20,358		—		—
Small Cap Growth	6,561		6,561		6,561		—		—
Fixed Income	4,826		4,826		4,826		—		—
International	2,299		2,299		2,299		—		—
Mid Cap Growth	4,179		4,179		4,179		—		—
Deferred compensation fund	$	53,683	$	53,683	$	50,801	$	2,882	$	—

1.The fair value of the money market fund is based on the net asset value (“NAV”) of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment.

2.The deferred compensation fund carrying amounts and total fair value amounts as of December 31, 2022 and 2021 are inclusive of $1.6 million and $7.0 million of holdings expected to be paid to former employees within the next twelve months and were recorded under “Prepaid expenses and other assets” in the Company’s Consolidated Balance Sheets.


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Other-than-temporary Impairments
	(in thousands)
December 31, 2022
Type of security:
Municipal bonds — available-for-sale	$	99,601	$	229	$	(4,630)	$	95,200	$	—
Total debt securities	$	99,601	$	229	$	(4,630)	$	95,200	$	—

December 31, 2021
Type of security:
Municipal bonds — available-for-sale	$	109,331	$	5,219	$	(154)	$	114,396	$	—
Total debt securities	$	109,331	$	5,219	$	(154)	$	114,396	$	—

December 31, 2020
Type of security:
Municipal bonds — available-for-sale	$	117,970	$	7,043	$	(1)	$	125,012	$	—
Total debt securities	$	117,970	$	7,043	$	(1)	$	125,012	$	—

The following table summarizes the contractual maturities of debt securities held at December 31, 2022 and December 31, 2021, which are classified as marketable securities in the Company’s Consolidated Balance Sheets:


	Municipal Bonds — Available-for-Sale
Contractual maturity:	December 31, 2022		December 31, 2021
	(in thousands)
Maturing in one year or less	$	2,798	$	5,606
Maturing in second year through fifth year	35,068		23,054
Maturing in sixth year through tenth year	38,575		52,180
Maturing after ten years	18,759		33,556
Total debt securities	$	95,200	$	114,396