Fair value is defined as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. Entities are required to use a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1 – Observable inputs such as quoted market prices in active markets;

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3 – Unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of September 30, 2026 and December 31, 2025, our available-for-sale securities primarily consisted of investments held in a rabbi trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations. These securities are measured at fair value using quoted prices in active markets for identical assets (Level 1) inputs and amounted to $0.9 million at  September 30, 2026 and $0.6 million at December 31, 2025. 

Throughout 2026 and 2025, the Company entered into a series of foreign currency forward contracts, the fair values of which were $0.3 million at  September 30, 2026 and $1.8 million at  December 31, 2025. The estimated fair value of foreign currency forward contracts is based on quotes received from the applicable counterparty, and represents the estimated amount we would receive or pay to settle the contracts, taking into consideration current exchange rates which can be validated through readily observable data from external sources (Level 2).

The Company's interest rate swap agreements, which are further described in Note 9, "Derivative Instruments and Hedging Activities," were terminated effective August 31, 2026. Accordingly, no interest rate swap assets or liabilities were outstanding as of September 30, 2026. The fair value of the interest rate swap agreements was $0.9 million as of December 31, 2025 and was classified within Level 2 of the fair value hierarchy.

The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025 were as follows:

In connection with the acquisition of Enercon as further described in Note 2, “Acquisitions,” the Sellers are eligible to receive Earnout Payments based on the achievement of certain financial metrics for each of the fiscal 2025 and 2026 Earnout Periods. The fiscal 2025 earnout was paid during the first quarter of 2026. Pursuant to the Letter Agreement, the fiscal 2026 earnout amount was fixed at $5.0 million during the third quarter of 2026 and is classified as a liability.

The earnout liabilities were initially recorded at a fair value of $3.3 million on the acquisition date and, prior to execution of the Letter Agreement described below, were subsequently remeasured at fair value using significant unobservable inputs and classified within Level 3 of the fair value hierarchy.

In addition, as discussed in Note 2, “Acquisitions,” the Company has an obligation to acquire the remaining 20% ownership interest in Enercon. On September 15, 2026, Bel Power Solutions s.r.o., a subsidiary of the Company, entered into the Letter Agreement with FF3 Holdings, L.P., which amended certain provisions relating to the future acquisition of the remaining 20% ownership interest in Enercon.

Pursuant to the Letter Agreement, the fiscal 2026 earnout obligation became fixed at $5.0 million and was therefore reclassified from Level 3 to Level 2 during the third quarter of 2026.

The fair value of the Company's Level 3 contingent consideration liabilities consisted of the following:

The decrease in the Level 3 contingent consideration liabilities during the nine months ended September 30, 2026 primarily reflects the payment of the fiscal 2025 earnout of $5.0 million during the first quarter of 2026 and the reclassification of the fiscal 2026 earnout obligation from Level 3 to Level 2 during the third quarter of 2026.

Pursuant to the Letter Agreement, the fiscal 2026 earnout consideration was established at $5.0 million. Accordingly, as of September 30, 2026, the related liability is classified within Level 2 of the fair value hierarchy and is presented within other current liabilities in the accompanying condensed consolidated balance sheet.

As discussed in Note 2, "Acquisitions," the Company recorded a redeemable noncontrolling interest liability of $114.0 million as of September 30, 2026 related to its obligation to acquire the remaining 20% ownership interest in Enercon. As of September 30, 2026, the liability is classified within Level 2 of the fair value hierarchy and is presented within current liabilities in the accompanying condensed consolidated balance sheet. At December 31, 2025, the related redeemable noncontrolling interest was reported in mezzanine equity at its redemption value of $93.2 million.

Aside from the reclassification of the fiscal 2026 earnout liability and the redeemable noncontrolling interest liability from Level 3 to Level 2 as described above, the Company does not have any liabilities measured at fair value on a recurring basis categorized as Level 3. There were no other transfers in or out of Level 1, Level 2 or Level 3  during the nine months ended September 30, 2026 or September 30, 2025. There were no changes to the Company’s valuation techniques used to measure fair values on a recurring or nonrecurring basis during the nine months ended  September 30, 2026 or September 30, 2025.

During 2025, the Company performed its annual impairment test of indefinite-lived intangible assets and determined that no impairment charges were required. There were no financial assets or indefinite-lived intangible assets measured at fair value on a nonrecurring basis as of  September 30, 2026 or December 31, 2025.

The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which are not measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company’s long-term debt is estimated using a discounted cash flow method based on interest rates currently available for debt issuances with similar terms and maturities. At September 30, 2026, the Company had no outstanding long-term debt, accordingly, the estimated fair value and carrying amount of total debt were $0 million and $0 million, respectively. At December 31, 2025, the estimated fair value of total debt was $196.5 million, compared to a carrying amount of $197.5 million. The Company did not have any other financial liabilities within the scope of the fair value disclosure requirements as of September 30, 2026.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets and long-lived assets, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment upon the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. Based on the Company's assessment, it was concluded that no triggering events occurred during the nine months ended September 30, 2026 or September 30, 2025.