v3.26.1
Note J - Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

NOTE J: FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, marketable equity securities, accounts receivable, trade accounts payable, and borrowings.

 

The Company follows the guidance for financial assets and liabilities measured on a recurring basis. This guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

 

Level 1:

  

Quoted market prices in active markets for identical assets or liabilities.

  

    

Level 2:

  

Inputs other than Level 1 inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable; or other inputs not directly observable, but derived principally from, or corroborated by, observable market data.

 

    

Level 3:

  

Unobservable inputs that are supported by little or no market activity.

 

The Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

 

At March 31, 2026, the following items are measured at fair value on a recurring basis:

 

   

Total

    

Level 1

    

Level 2

    

Level 3

  
   

(in thousands)

  
                                 

Marketable equity securities

   $ 40,756     $ 40,756       -       -  

 

The Company’s investments in marketable securities are recorded at fair value based on quoted market prices. The carrying value of other financial instruments, including cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value due to their short maturities.

 

The carrying amount for the line of credit approximates fair value because the line of credit interest rate is adjusted frequently.

 

For long-term debt other than the lines of credit, the fair values are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The carrying value and estimated fair value of this other long-term debt at March 31, 2026 was as follows:

   

Carrying

Value

    

Estimated

Fair Value

  
   

(in thousands)

  
                 

Long-term debt

   $ 320,651     $ 317,724  

 

The Company has not elected the fair value option for any of its financial instruments.