Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.21.2
Fair Value Measurements (Tables)
 9 Months Ended
Jun. 26, 2021
Fair Value Disclosures [Abstract]  
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of June 26, 2021:
Level 1 Level 2 Level 3 Total
(in thousands)
Liabilities:
Liability for contingent consideration (a) $ —  $ —  $ 1,083  $ 1,083 
Total liabilities $ —  $ —  $ 1,083  $ 1,083 

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of June 27, 2020:
Level 1 Level 2 Level 3 Total
(in thousands)
Liabilities:
Liability for contingent consideration (a) $ —  $ —  $ 1,246  $ 1,246 
Total liabilities $ —  $ —  $ 1,246  $ 1,246 
The following table presents the Company's financial assets and liabilities at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of September 26, 2020:
Level 1 Level 2 Level 3 Total
(in thousands)
Liabilities:
Liability for contingent consideration (a) $ —  $ —  $ 1,369  $ 1,369 
Total liabilities $ —  $ —  $ 1,369  $ 1,369 
 
(a)The fair values of the Company's contingent consideration liabilities from previous business acquisitions are considered "Level 3" measurements because the Company uses various estimates in the valuation models to project timing and amount of future contingent payments. The liability for contingent consideration relates to an earn-out for B2E, acquired in December 2012, future performance-based contingent payments for Hydro-Organics Wholesale, Inc., acquired in October 2015 and future performance-based contingent payments for Segrest, Inc., acquired in October 2016. In December 2019, performance-based criteria associated with the $6 million contingent consideration liability related to Segrest, Inc. were met and accordingly, the entire amount was released out of an independent escrow account to the former owners as of December 28, 2019. The performance period related to B2E ended on December 31, 2020. The performance period related to Hydro-Organics Wholesale extends through fiscal year 2025. The fair value of the estimated contingent consideration arrangement is determined based on the Company’s evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity. This is presented as part of long-term liabilities in the Company's consolidated balance sheets.
Summary of Changes in Fair Value of Level 3 Financial Instruments The following table provides a summary of the changes in fair value of the Company's Level 3 financial instruments for the periods ended June 26, 2021 and June 27, 2020:
  Amount
(in thousands)
Balance September 26, 2020 $ 1,369 
Estimated contingent performance-based consideration established at the time of acquisition — 
Changes in the fair value of contingent performance-based payments established at the time of acquisition (32)
Performance-based payments (254)
Balance June 26, 2021 $ 1,083 
 
  Amount
(in thousands)
Balance September 28, 2019 $ 7,369 
Estimated contingent performance-based consideration established at the time of acquisition — 
Changes in the fair value of contingent performance-based payments established at the time of acquisition 31 
Performance-based payments (6,154)
Balance June 27, 2020 $ 1,246