Quarterly report pursuant to Section 13 or 15(d)

Fair Value (Tables)

v3.20.1
Fair Value (Tables)
3 Months Ended
Mar. 31, 2020
Fair Value  
Schedule of financial assets and liabilities measured at fair value on a recurring basis and disclosure of the fair value of long-term debt

Fair Value at

Fair Value at

March 31,

December 31,

2020

2019

Assets:

Other long-term assets (a)

  

$

6,767

  

$

7,270

Total Assets

$

6,767

$

7,270

Liabilities:

Interest rate swaps (b)

$

13,876

$

6,736

Long-term debt (c)

218,543

247,630

Earnout - Dejana (d)

2,000

2,000

Total Liabilities

$

234,419

$

256,383

(a)  Included in other assets is the cash surrender value of insurance policies on various individuals that are associated with the Company. The carrying amount of these insurance policies approximates their fair value and is considered Level 2 inputs.

(b) Valuation models are calibrated to initial trade price. Subsequent valuations are based on observable inputs to the valuation model (e.g. interest rates and credit spreads). Model inputs are changed only when corroborated by market data. A credit risk adjustment is made on each swap using observable market credit spreads. Thus, inputs used to determine fair value of the interest rate swap are Level 2 inputs.  Interest rate swaps of $3,570 and $10,306 at March 31, 2020 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively.  Interest rate swaps of $1,522 and $5,214 at December 31, 2019 are included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively.

(c)  The fair value of the Company’s long-term debt, including current maturities, is estimated using discounted cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements, which is a Level 2 input for all periods presented. Meanwhile, long-term debt is recorded at carrying amount, net of discount and deferred debt issuance costs, as disclosed on the face of the balance sheet.

(d) Included in Other long-term liabilities in the amount of $2,000 at March 31, 2020 is the fair value of an obligation for a portion of the potential earnout incurred in conjunction with the acquisition of substantially all of the assets of Dejana Truck & Utility Equipment Company, Inc. and certain entities directly or indirectly owned by the Peter Paul Dejana Family Trust dated 12/31/98 (“Dejana”). Included in Other long-term liabilities in the amount of $2,200 at March 31, 2019 is the fair value of an obligation for a portion of the potential earnout incurred in conjunction with the acquisition of Dejana. Fair value is based upon Level 3 inputs of a real options approach where gross sales were simulated in a risk-neutral framework using Geometric Brownian Motion, a well-accepted model of stock price behavior that is used in option pricing models such as the Black-Scholes option pricing model, using key inputs of forecasted future sales and financial performance as well as a risk adjusted expected growth rate adjusted appropriately based on its correlation with the market.  There were no adjustments to fair value or payments to former owners in either the three months ended March 31, 2020 or March 31, 2019.