Note 11 - Derivative Liability (Interest Rate Swap) |
3 Months Ended |
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Mar. 31, 2026 | |
| Notes to Financial Statements | |
| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
NOTE 11 – DERIVATIVE ASSET (INTEREST RATE SWAP)
On September 5, 2025, the Company entered into an interest rate swap agreement to hedge exposure to variability in cash flows associated with its variable-rate term loan (Note 6). The swap effectively converts approximately 50% of the Company’s term loan from variable to fixed.
The agreement had a notional amount of $20,000 at inception, amortizes in accordance with the underlying debt, and requires the Company to pay a fixed rate of 3.39% while receiving a variable rate based on SOFR. The agreement expires on August 8, 2030.
The Company designated the swap as a cash flow hedge under ASC 815, Derivatives and Hedging. The effective portion of changes in the fair value of the derivative is recorded in Other Comprehensive Income and reclassified into interest expense as payments occur under the hedged debt. Any ineffective portion is recognized in current period earnings.
The fair value of the swap was an asset of $72 at March 31, 2026 and is presented as a derivative asset on the Condensed Consolidated Balance Sheet. At December 31, 2025, the fair value of the swap was a liability of $26 and was presented as a derivative liability on the Company’s Consolidated Balance Sheet. For the three months ended March 31, 2026, the effective portion of changes in fair value of the interest-rate swap increased OCI by $98. For the year ended December 31, 2025, the effective portion of changes in fair value of the interest-rate swap decreased OCI by $26. The swap is measured under fair value guidance using Level 2 inputs. No hedge ineffectiveness was recognized during the three months ended March 31, 2026 or year ended December 31, 2025.
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