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Fair Value Measurements

3 Months Ended

Apr. 02, 2021

Note 3: Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale fixed income securities, trading fixed income and equity securities held in its deferred compensation plan and the liability associated with its deferred compensation plan. There were no transfers between fair value measurement levels during the three months ended April 2, 2021 and April 3, 2020. Any transfers between fair value measurement levels would be recorded on the actual date of the event or change in circumstances that caused the transfer. The fair value of these certain financial assets and liabilities was determined using the following inputs at April 2, 2021 (in thousands):

	Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Money market securities ⁽¹⁾	$	71,569	$	71,569	$	-	$	-
Fixed income available-for-sale securities ⁽²⁾		29,999		-		29,999		-
Fixed income trading securities held in deferred compensation plan ⁽³⁾		30,559		30,559		-		-
Equity trading securities held in deferred compensation plan ⁽³⁾		71,135		71,135		-		-
Total	$	203,262	$	173,263	$	29,999	$	-
Liabilities
Deferred compensation plan ⁽⁴⁾		102,488		102,488		-		-
Total	$	102,488	$	102,488	$	-	$	-

⁽¹⁾	Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾	Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾	Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾	Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

The fair value of these certain financial assets and liabilities was determined using the following inputs at January 1, 2021 (in thousands):

	Fair Value Measurements at Reporting Date Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Money market securities⁽¹⁾	$	51,442	$	51,442	$	-	$	-
Fixed income available for sale securities ⁽²⁾		45,001		-		45,001		-
Fixed income trading securities held in deferred compensation plan ⁽³⁾		26,274		26,274		-		-
Equity trading securities held in deferred compensation plan ⁽³⁾		62,473		62,473		-		-
Total	$	185,190	$	140,189	$	45,001	$	-
Liabilities
Deferred compensation plan ⁽⁴⁾		88,977		88,977		-		-
Total	$	88,977	$	88,977	$	-	$	-

⁽¹⁾	Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

⁽²⁾	Included in short-term investments on the Company’s unaudited condensed consolidated balance sheet.

⁽³⁾	Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

⁽⁴⁾	Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

Fixed income available-for-sale securities as of April 2, 2021 and January 1, 2021 represent obligations of the United States Treasury. Fixed income and equity trading securities represent mutual funds held in the Company’s deferred compensation plan. See Note 6 for additional information about the Company’s deferred compensation plan.

Cash, cash equivalents and short-term investments consisted of the following as of April 2, 2021 (in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	112,952	$	-	$	-	$	112,952
Cash equivalents:
Money market securities		71,569		-		-		71,569
Total cash equivalents		71,569		-		-		71,569
Total cash and cash equivalents		184,521		-		-		184,521
Short-term investments:
U.S. Treasury and agency securities		29,997		2				29,999
Total short-term investments		29,997		2		-		29,999
Total cash, cash equivalents and short-term investments	$	214,518	$	2	$	-	$	214,520

Cash, cash equivalents and short-term investments consisted of the following as of January 1, 2021 (in thousands):

	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	146,083	$	-	$	-	$	146,083
Cash equivalents:
Money market securities		51,442		-		-		51,442
Total cash equivalents		51,442		-		-		51,442
Total cash and cash equivalents		197,525		-		-		197,525
Short-term investments:
U.S. Treasury and agency securities		44,993		8				45,001
Total short-term investments		44,993		8		-		45,001
Total cash, cash equivalents and short-term investments	$	242,518	$	8	$	-	$	242,526

At April 2, 2021 the stated effective maturities of all short-term fixed income securities classified as short-term investments were due within one year.

At April 2, 2021 and January 1, 2021, the Company did not have any assets or liabilities valued using significant unobservable inputs.

The following financial instruments are not measured at fair value on the Company's unaudited condensed consolidated balance sheet at April 2, 2021 and January 1, 2021 but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at April 2, 2021 and January 1, 2021 approximates their carrying value as reported on the Company’s unaudited condensed consolidated balance sheet.

There were no other-than-temporary impairments or credit losses related to available-for-sale securities during the three months ended April 2, 2021 and April 3, 2020.

- Definition

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.

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