Fair Value Measurements |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 26, 2024 | |||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Fair Value Measurements As of December 26, 2024 and December 28, 2023, 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 15, “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 26, 2024, the Company’s contingent earn-out liabilities had an aggregate estimated fair value of $4.5 million, of which $3.4 million is included in accrued expenses and other current liabilities and $1.1 million is included in other liabilities within the Consolidated Balance Sheets. The 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 26, 2024, $0.9 million was recognized as a benefit in general and administrative expense within the Consolidated Statements of Operations and Comprehensive Income due to a net decrease in the fair value of the contingent earn-out liabilities. The table below summarizes changes in contingent earn-out liabilities during the fiscal year ended December 26, 2024:
In fiscal 2024, the Company adjusted the fair value of the contingent earn-out liabilities based on actual performance relative to performance period targets for fiscal 2024. The earn-outs related to the fiscal 2024 performance period will be paid in the first quarter of fiscal 2025. The fair value of the remaining contingent earn-out liability related to Salesmaster was determined using an internal model which included significant unobservable inputs related to projected revenue and gross margin. Payout of the remaining contingent consideration is subject to the achievement of certain annual gross margin and gross profit targets in fiscal 2025.
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. For the fiscal years ended December 26, 2024 and December 28, 2023, the change in fair value of the Company’s interest rate cap contracts was approximately $1.5 million and $2.9 million, respectively, which is presented on the Consolidated Statements of Operations and Comprehensive Income net of tax of $0.4 million and $1.0 million, respectively.
Non-recurring Fair Value Measurements
Except for the acquisition-related fair value measurements described in Note 15, “Acquisitions,” there were no assets or liabilities as of December 26, 2024 or December 28, 2023 that resulted from fair value measurements made on a non-recurring basis.
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