v3.25.2
Derivatives and Hedging Activities
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities
Note 7 – Derivatives and Hedging Activities
Cash Flow Hedges of Interest Rate Risk
As of June 30, 2025 and December 31, 2024, the Company had outstanding derivative agreements with aggregate notional amounts of $75.0 million and $60.0 million, respectively, which were designated as cash flow hedges under U.S. GAAP. The interest rate derivative agreements comprise interest rate collar agreements entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Revolving Facility. Under the agreements, the benchmark rate for the Revolving Facility floated between no higher than 5.50% per annum and no lower than 4.20% per annum on $25.0 million, and no higher than 5.50% per annum and no lower than 4.035% per annum on $35.0 million, effective from November 13, 2023 until May 12, 2025. Upon the scheduled expiration of the interest rate collar agreements, the Company entered into a new interest rate collar agreement to hedge against interest rate volatility on the Revolving Facility. Under the agreement, the benchmark rate for the Revolving Facility will float between no higher than 4.29% per annum and no lower than 3.28% per annum on a total notional amount of $75.0 million, effective from May 12, 2025 to May 12, 2026.
The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges as well as their classification in the accompanying consolidated balance sheets as of the periods indicated below (in thousands):
Derivatives Designated as Hedging InstrumentsBalance Sheet LocationJune 30, 2025December 31, 2024
Interest rate collarsOther liabilities, net$(25)$(15)
During the three and six months ended June 30, 2025, the Company recorded net unrealized losses of less than $0.1 million for changes in the fair value of its cash flow hedge in accumulated other comprehensive loss. During the three and six months ended June 30, 2024, the Company recorded unrealized gains of less than $0.1 million and $0.3 million, respectively, for changes in the fair value of its cash flow hedges in accumulated other comprehensive loss.
During the three and six months ended June 30, 2025, the Company reclassified previous net gains of less than $0.1 million from accumulated other comprehensive loss into interest expense as a result of the hedged transactions impacting earnings. During the three and six months ended June 30, 2024, the Company did not reclassify any previous net gains or losses from accumulated other comprehensive loss into interest expense as a result of the hedged transactions impacting earnings.
During the next twelve months, the Company estimates that less than $0.1 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense.
Derivatives Not Designated as Hedging Instruments
As of June 30, 2025 and December 31, 2024, the Company had no derivatives that were not designated as qualifying hedging relationships.
Tabular Disclosure of Offsetting Derivatives
The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of the periods indicated below (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.
Offsetting of Derivative Assets and Liabilities
Gross Amounts of Recognized AssetsGross Amounts of Recognized LiabilitiesGross Amounts Offset in the Consolidated Balance SheetsNet Amounts of Assets Presented in the Consolidated Balance SheetsNet Amounts of Liabilities Presented in the Consolidated Balance SheetsFinancial InstrumentsCash Collateral ReceivedNet Amount
June 30, 2025$— $(25)$— $— $(25)$— $— $(25)
December 31, 2024$— $(15)$— $— $(15)$— $— $(15)