FASB ASC 820, “Fair Value Measurements and Disclosures” (“Topic 820”) defines fair value based on the price that would be received to sell an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. Market participants are defined as buyers or sellers in the principal or most advantageous market for the asset or liability that are independent of the reporting entity, knowledgeable and able and willing to transact for the asset or liability.

Level 2 inputs are observable inputs other than 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 with observable market data.

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


			Fair Value Measurements at July 4, 2026 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at July 4, 2026		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance



Available-for-sale debt securities:
United States Government and agency securities	$	40,073	$	40,073	$	—	$	—

Total available-for-sale debt securities	40,073		40,073		—		—

Marketable equity securities:
Mutual funds	27,302		27,302		—		—


Exchange traded funds	24,266		24,266		—		—

Total marketable equity securities	51,568		51,568		—		—

Liabilities:
Deferred compensation	$	750	$	—	$	—	$	750
Contingent consideration	20,000		—		—		20,000


			Fair Value Measurements at December 31, 2025 Using:
Assets and Liabilities Recorded at Fair Value on a Recurring Basis	Total Carrying Value at December 31, 2025		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Assets invested for self-insurance


Available-for-sale debt securities:
United States Government and agency securities	$	34,910	$	34,910	$	—	$	—

Total available-for-sale debt securities	34,910		34,910		—		—

Marketable equity securities:
Mutual funds	20,383		20,383		—		—


Exchange traded funds	16,030		16,030		—		—

Total marketable equity securities	36,413		36,413		—		—

Liabilities:
Deferred compensation	$	863	$	—	$	—	$	863

The estimated fair value of the deferred compensation--classified as Level 3--is based on the value of the Company's common shares, determined by independent valuation. Management has evaluated the classification of the deferred compensation liability and determined that due to significant unobservable inputs used in the independent stock valuation, the liability is categorized as a Level 3 fair value measure.

The Company's common shares are not listed or traded on an established public trading market and market prices are, therefore, not available. Semiannually, for purposes of the Davey 401KSOP and ESOP, the fair market value of the common shares is determined by an independent stock valuation firm. The semiannual valuations utilize two approaches in determining the fair value of the common shares, a market approach and an income approach. Each approach utilizes Company performance and financial condition, using a peer group of comparable companies selected by the firm as well as significant unobservable inputs such as projected earnings and cash flow, EBITDA and cost of capital. The results of each valuation approach are utilized in a weighted average calculation to arrive at the fair market value.

The peer group at July 4, 2026 consisted of: ABM Industries Incorporated; Comfort Systems USA, Inc.; Dycom Industries, Inc.; FirstService Corporation; MYR Group, Inc.; Quanta Services, Inc.; Rollins, Inc.; and Scotts Miracle-Gro Company. The semiannual valuations are effective for a period of six months and the per-share price established by those valuations is the price at which the Board of Directors of the Company has determined that the common shares will be bought and sold during that six-month period in transactions involving the Company or one of its employee benefit or stock purchase plans. The Company provides a ready market for all shareholders through its direct purchase of their common shares, although the Company is under no obligation to do so (other than for repurchases pursuant to the put option, as described in Note Q).

Furthermore, the Company measures contingent consideration recognized in connection with acquisitions at fair value on a recurring basis using significant unobservable inputs classified as Level 3 inputs. The Company's contingent consideration obligations arose from the acquisition of Cal Engineering on January 30, 2026. The contingent consideration obligation involves potential future cash payments that are contingent upon the achievement of certain financial metrics. The Company recorded a contingent consideration liability at its estimated fair value at the date of acquisition. At each reporting date, the Company reviews and reassesses the estimated fair value of the contingent consideration obligation and records changes in the fair value in Other income (expense) in the Condensed Consolidated Statements of Operations. During the three months ended July 4, 2026, the Company recorded a measurement period adjustment to the contingent consideration liability accounted for as of the acquisition date January 30, 2026. See Note D - Business Combinations for further details. No contingent consideration fair value changes were recognized between January 30, 2026 and July 4, 2026.

The contingent consideration is classified on the Condensed Consolidated Balance Sheets based on expected payment dates. The current portion of contingent consideration, if any, is included in Other current liabilities in the Condensed Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in Other noncurrent liabilities. As of July 4, 2026, the entire estimated fair value of the contingent consideration liability was classified as noncurrent.

The fair value of the Company’s contingent consideration obligation is estimated using a Monte Carlo simulation option pricing framework. Key significant unobservable inputs used in the estimate include the contractual terms and assumptions regarding financial forecasts, discount rates and volatility of forecasted revenue and operating profit. Changes in the fair value of the contingent consideration obligation results from changes in discount periods and rates, and changes in probability assumptions with respect to the likelihood of achieving the financial targets.

Fair Value of Financial Instruments--The fair values of our current financial assets and current liabilities, including cash, accounts receivable, accounts payable, and accrued expenses, among others, approximate their reported carrying values because of their short-term nature. Financial instruments classified as noncurrent assets consist of available-for-sale debt securities and marketable equity securities, which are held at fair value. The carrying values of financial instruments classified as noncurrent liabilities approximate their fair values. The carrying value of our revolving credit facility approximates fair value--classified as Level 2--as the interest rates on the amounts outstanding are variable and are adjusted regularly to reflect current market rates. The fair value of our senior unsecured notes and term loans--classified as Level 2--is determined based on expected future weighted-average interest rates with the same remaining maturities.

Market Risk--In the normal course of business, we are exposed to market risk related to changes in foreign currency exchange rates, changes in interest rates and changes in fuel prices. We do not hold or issue derivative financial instruments for trading or speculative purposes. In prior years, we have used derivative financial instruments to manage risk, in part, associated with changes in interest rates and changes in fuel prices. Presently, we are not engaged in any hedging or derivative activities.