Fair Value Measurements

3 Months Ended

Mar. 27, 2020

4. FAIR VALUE MEASUREMENTS

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following table summarizes, for assets or liabilities measured at fair value, the respective fair value and the classification by level of input within the fair value hierarchy:

			Fair Value Measurement at
			Reporting Date Using
Description	March 27, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions)
Other liabilities:
Contingent earn-out liability	$	12.3	$	—	$	—	$	12.3
Pension obligation	$	4.9	$	—	$	—	$	4.9
Common stock purchase obligation	$	7.0	$	—	$	—	$	7.0

			Fair Value Measurement at
			Reporting Date Using
Description	December 27, 2019		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(In millions)
Other liabilities:
Contingent earn-out liability	$	9.5	$	—	$	—	$	9.5
Common stock purchase obligation	$	6.8	$	—	$	—	$	6.8
Pension obligation	$	4.4	$	—	$	—	$	4.4

There were no transfers from Level 1 or Level 2 to Level 3. Fair value adjustments were noncash, and therefore did not impact the Company’s liquidity or capital resources. Qualitative information about Level 3 fair value measurements are primarily as follows:

	March 27,		Valuation	Unobservable
	2020		Techniques	Input	Range
(Dollars in millions, except rate/multiple)
Contingent earn-out liability	$	12.3	Monte Carlo simulation	Revenue discount rate	7.5%
				Revenue volatility rate	41.0%
Common stock purchase obligation	$	7.0	Discounted cash flow	Revenue multiple		1.3
				EBITDA Multiple		5.0
Pension obligation	$	4.9	Projected unit credit method	Discount rate	2.0%
				Rate on return	1.5%
				Salary increase rate	4.5%

Following is a summary of the Level 3 activity:

(In millions)	Contingent earn-out liability		Purchase obligation		Pension obligation
As of December 27, 2019	$	9.5	$	6.8	$	4.4
Fair value adjustments		2.8	0.2			0.5
As of March 27, 2020	$	12.3	$	7.0	$	4.9