XML 24 R13.htm IDEA: XBRL DOCUMENT

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 6. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents, trade receivables, notes receivable, accounts payable and other short-term liabilities. The carrying amounts of these financial instruments approximate their respective fair values. The Company entered into a new Credit Agreement with SunTrust Bank and Bank of America, N.A. for an unsecured Revolving Commitment of up to $175.0 million, which includes a $75.0 million letter of credit subfacility and a $25.0 million swingline subfacility and an unsecured variable rate $250.0 million Term Loan with SunTrust Bank and Bank of America, N.A. Both the Revolving Commitment and the Term Loan have five year durations commencing on April 29, 2019. In addition, the agreement has provisions to extend the duration beyond the Revolving Commitment Termination date as well optional prepayments rights to at any time and from time to time prepay any borrowing, in whole or in part, without premium or penalty. As of June 30, 2019, the Revolving Commitment had outstanding borrowings of $101.0 million and the Term Loan had outstanding borrowings of $246.9 million. As of December 31, 2018, there were no outstanding borrowings. In order to comply with applicable debt covenants, the Company will maintain at all times a Leverage Ratio of not greater than 3.00:1.00. The Leverage ratio is calculated as of the last day of the fiscal quarter most recently ended. The Company remained in compliance with applicable debt covenants through the date of this filing and expects to maintain compliance through 2019. The credit agreement is included as Exhibit 10.1.

At June 30, the Company had a $26.9 million of earnout liability with the former owners of acquired companies. The earnouts were discounted on the Company's books using the Monte-Carlo simulation valuation model at $26.9 million of level 3 liabilities.


		Recurring Fair Value Measurements
		Quoted Prices in Active
		Markets for Identical							Significant Other								Significant Unobservable
		Assets and Liabilities							Observable Inputs								Inputs
		at June 30,							at June 30,								at June 30,								Total Fair Value
		(Level 1)							(Level 2)								(Level 3)								at June 30,
		2019			2018				2019				2018				2019				2018				2019				2018
Liabilities
Acquisition earnouts		$	—		$	—			$	—			$	—			$	26,918			$	21,489			$	26,918			$	21,489

Level 3 Rollforward The table below presents a summary of the changes in fair value for level 3 assets and liabilities.

The table below disaggregates, by product type, the information for assets and liabilities included in the summary table above.

Six Months Ended

June 30, 2019

(in thousands) 2019 2018

Acquisition earnouts booked using the Monte-Carlo Simulation Model

Beginning balance $ 14,339 $ 17,959

New acquisition earnouts 12,700 3,025

Adjustments and Accrued Interest 1,355 701

Earnout payments (1,476 ) (196 )

Ending balance $ 26,918 $ 21,489

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.

+ References + Details