Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

Fair Value Measurements
12 Months Ended
Dec. 29, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
As of December 29, 2022 and December 30, 2021, the Company had certain financial assets and liabilities on its Consolidated Balance Sheets that were required to be measured at fair value on a recurring or non-recurring basis. The estimated fair values of financial assets and liabilities such as cash and cash equivalents, receivables, prepaid expenses and other current assets, other assets, accounts payable, and accrued expenses and other current liabilities approximate their respective carrying values as reported within the Consolidated Balance Sheets. Refer to Note 1, “Summary of Significant Accounting Policies” and Note 14, “Acquisitions” for a discussion of the valuation of goodwill and intangible assets, respectively. See Note 10, “Debt” for discussion of the fair value of the Company’s debt.
Recurring Fair Value Measurements
As of December 29, 2022, the contingent earn-out liabilities, primarily related to the Spartan acquisition as described in Note 14, “Acquisitions,” had an aggregate estimated fair value of $11.0 million, of which $5.8 million is included in other liabilities and $5.2 million is included in accrued expenses and other current liabilities within the Consolidated Balance Sheets. The Company’s contingent earn-out liabilities are classified as level 3 within the fair value hierarchy due to the use of unobservable inputs that are significant to their respective valuations. For the fiscal year ended December 29, 2022, $2.5 million was recognized in general and administrative expense within the Consolidated Statements of Operations and Comprehensive Income related to increases in the fair value of the contingent earn-out liabilities. The table below summarizes changes in contingent earn-out liabilities as of December 29, 2022.
in thousands Contingent Earn-out Liabilities
Balance at December 30, 2021
$ 10,231 
Acquisitions 830 
Fair value adjustments 2,529 
Payments (2,571)
Balance at December 29, 2022
$ 11,019 
The Company determined the fair value of the contingent earn-out liability with assistance from a third-party valuation specialist using a Monte Carlo valuation method with significant unobservable inputs, including the following weighted-average assumptions as of December 29, 2022, and December 30, 2021:
December 29,
December 30,
Discount rate 13.5% 11.5%
Revenue volatility 18.6% 29.0%
EBITDA volatility 35.0% 55.0%
Interest Rate Cap Contracts
The Company has outstanding interest rate cap contracts that were valued primarily using level 2 inputs based on data readily observable in public markets. The Company's interest rate cap contracts were negotiated with counterparties without going through a public exchange. Accordingly, the Company's fair value assessments for these derivative contracts gave consideration to the risk of counterparty default as well as the Company's own credit risk. As of December 29, 2022 and December 30, 2021, the total fair value of the Company's interest rate cap contracts was approximately $5.9 million and $0.5 million, respectively, which are presented as a component of accumulated other comprehensive income within stockholders’ equity on the Consolidated Balance Sheets net of tax of $1.4 million and less than $0.1 million, respectively.
Non-recurring Fair Value Measurements
Except for the acquisition-related fair value measurements described in Note 14, “Acquisitions,” there were no assets or liabilities as of December 29, 2022 or December 30, 2021 that resulted from fair value measurements made on a non-recurring basis.