v3.26.1
Financial Instruments and Contingent Consideration
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Financial Instruments and Contingent Consideration

NOTE 15. FINANCIAL INSTRUMENTS AND CONTINGENT CONSIDERATION

We do not hold or issue financial instruments for trading purposes. The estimated fair values of our financial instruments and contingent consideration are as follows:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

Carrying
Amount

 

 

Estimated
Fair Value

 

 

Carrying
Amount

 

 

Estimated
Fair Value

 

Liabilities, net:

 

 

 

 

 

 

 

 

 

 

 

 

Total long-term debt, including current portion

 

$

(492.0

)

 

$

(492.0

)

 

$

(406.7

)

 

$

(406.7

)

Interest rate swap contracts

 

 

(0.5

)

 

 

(0.5

)

 

 

(3.4

)

 

 

(3.4

)

Acquisition-related contingent consideration

 

 

(3.2

)

 

 

(3.2

)

 

 

(3.4

)

 

 

(3.4

)

The carrying amounts of cash and cash equivalents, receivables and accounts payable approximate fair value because of the short-term maturity of these instruments. The fair value estimates of long-term debt were based on data for our Term Loan A debt provided by a major financial institution. The fair value estimates for interest rate swap contracts were estimated with the assistance of an independent, third-party valuation expert and verified by obtaining quotes from major financial institutions. The fair value estimates for acquisition-related contingent consideration liabilities that are payable based on future performance were measured primarily through the use of a Monte Carlo simulation by an independent, third-party valuation specialist.

The classification of acquisition-related contingent consideration liabilities on our Condensed Consolidated Balance Sheets is summarized below:

 

Balance Sheet Location

 

June 30, 2026

 

 

December 31, 2025

 

Accounts payable and accrued expenses (1)

 

$

-

 

 

$

1.5

 

Other long-term liabilities (2)

 

 

3.2

 

 

 

1.9

 
(1)
Acquisition-related contingent consideration related to financial and performance milestones for the July 2023 acquisition of BOK Modern, LLC (“BOK”) as of December 31, 2025.
(2)
Acquisition-related contingent consideration related to future financial and performance milestones for the February 2026 acquisition of Eventscape, the September 2025 acquisition of Geometrik and the October 2023 acquisition of Insolcorp, LLC (“Insolcorp”) as of June 30, 2026, and future financial and performance milestones for the Geometrik and Insolcorp acquisitions as of December 31, 2025.

Fair value is defined 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. Three levels of inputs may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; or

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The fair value measurement of assets and liabilities measured at fair value on a recurring basis and reported on the Condensed Consolidated Balance Sheets is summarized below:

 

 

 

June 30, 2026

 

 

December 31, 2025

 

 

 

Fair value based on

 

 

Fair value based on

 

 

 

Other
observable
inputs

 

 

Other
unobservable
inputs

 

 

Other
observable
inputs

 

 

Other
unobservable
inputs

 

 

 

Level 2

 

 

Level 3

 

 

Level 2

 

 

Level 3

 

Liabilities, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap contracts

 

$

(0.5

)

 

$

-

 

 

$

(3.4

)

 

$

-

 

Acquisition-related contingent consideration

 

 

-

 

 

 

(3.2

)

 

 

-

 

 

 

(1.9

)

 

Acquisition-related contingent consideration of $3.2 million and $1.9 million as of June 30, 2026 and December 31, 2025, respectively, was measured with the use of significant unobservable inputs, which included financial projections over the earn-out period, the volatility of the underlying financial metrics and estimated risk-free rates of return. Acquisition-related contingent consideration liabilities of $1.5 million related to the BOK acquisition as of December 31, 2025 has been excluded from the table above because the liability was not measured based on Level 3 inputs as performance milestone achievements were known.

The following table summarizes the weighted-average of the significant unobservable inputs as of June 30, 2026:

 

 

 

Eventscape

 

 

Geometrik

 

 

Insolcorp

 

Unobservable input

 

 

 

 

 

 

 

 

 

Volatility

 

 

25.4

%

 

 

23.6

%

 

 

26.5

%

Risk-free rate

 

 

4.2

%

 

 

4.1

%

 

 

4.1

%

The changes in fair value of the acquisition-related contingent consideration liabilities for the three and six months ended June 30, 2026 and 2025 were as follows:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Fair value of contingent consideration as of beginning of period

 

$

2.3

 

 

$

2.0

 

 

$

3.4

 

 

$

3.2

 

Cash consideration paid

 

 

-

 

 

 

-

 

 

 

(1.5

)

 

 

(1.5

)

Acquisition date fair value of Eventscape contingent consideration

 

 

-

 

 

 

-

 

 

 

0.4

 

 

 

-

 

Loss related to change in fair value of contingent consideration, net

 

 

0.9

 

 

 

0.1

 

 

 

0.9

 

 

 

0.4

 

Fair value of contingent consideration as of end of period

 

$

3.2

 

 

$

2.1

 

 

$

3.2

 

 

$

2.1

 

During the six months ended June 30, 2026, we paid $1.5 million of additional cash consideration, which represented the achievement of certain financial and performance milestones through December 31, 2025 for the BOK acquisition, and was classified as cash flows from operating activities on our Condensed Consolidated Statements of Cash Flows. During the six months ended June 30, 2025, we paid $1.5 million of additional cash consideration, which represented the achievement of certain financial and performance milestones through December 31, 2024 for the BOK acquisition. The cash consideration paid during the six months ended June 30, 2025 was classified as cash flows from financing activities on our Condensed Consolidated Statements of Cash Flows, up to the acquisition date fair value. The portion of additional cash consideration paid in excess of the acquisition date fair value was classified as cash flows from operating activities on our Condensed Consolidated Statements of Cash Flows.

During the three and six months ended June 30, 2026 and 2025, the changes in fair value of acquisition-related contingent consideration were primarily due to changes in financial projections over each entity’s earn-out periods, changes in valuation inputs and the impact of foreign exchange movements. Changes in acquisition-related contingent consideration liabilities subsequent to the initial acquisition-date measurements, excluding foreign exchange movements, were recorded as a component of SG&A expenses on our Condensed Consolidated Statements of Earnings and Comprehensive Income.