v3.26.1
Derivative Financial Instrument
6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instrument
NOTE 10 — Derivative Financial Instrument
We have a receive-variable (Receive Leg), pay-fixed (Pay Leg) interest rate swap with JPMorgan Chase Bank, N.A. As of June 30, 2026, the interest rate swap had a notional amount of approximately $55.1 million and hedges interest rate risk on the term loan under the 2025 Credit Facility. The interest rate swap matures on February 28, 2027, and has a fixed rate of 2.67% per annum for the Pay Leg. The variable rate on the Receive Leg of the interest rate swap is the one-month adjusted term SOFR plus an applicable margin. As of June 30, 2026, the one-month adjusted term SOFR was 3.64%.
Our interest rate swap has been designated as a cash flow hedge, and as such, we record the change in fair value for the effective portion of the interest rate swap in AOCI rather than in current period earnings until the underlying hedged transaction affects earnings. As of June 30, 2026, we expect to reclassify a gain of approximately $0.4 million from AOCI to earnings within the next twelve months.
Designated as a Level 2 instrument within the fair value hierarchy, the fair value and effect of the derivative instrument included in our condensed consolidated financial statements was as follows:
(in thousands)
Balance Sheets Classification
June 30, 2026December 31, 2025
Derivative instrument designated as cash flow hedge
Interest rate swap contractPrepaid expenses and other current assets$448 $466 
Interest rate swap contractOther long-term assets— 36 
Total derivative instrument designated as cash flow hedge$448 $502 
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)Financial Statements Classification2026202520262025
Derivative instrument designated as cash flow hedge
Income (loss) recognized in other comprehensive income before reclassifications
Statements of Comprehensive Income
$102 $(15)$300 $(175)
Reclassification from accumulated other comprehensive income to earnings for the effective portion
Statements of Operations - Interest expense, net
(158)(280)(323)(562)
Income tax benefit
Statements of Comprehensive Income
17 54 11 147