Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.20.4
Fair Value Measurements (Tables)
 3 Months Ended
Dec. 26, 2020
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 December 26, 2020: 
Level 1 Level 2 Level 3 Total
(in thousands)
Liabilities:
Liability for contingent consideration (a) $ —  $ —  $ 1,227  $ 1,227 
Total liabilities $ —  $ —  $ 1,227  $ 1,227 

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 December 28, 2019: 
Level 1 Level 2 Level 3 Total
(in thousands)
Liabilities:
Liability for contingent consideration (a) $ —  $ —  $ 1,323  $ 1,323 
Total liabilities $ —  $ —  $ 1,323  $ 1,323 
The following table presents our 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 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 December 26, 2020 and December 28, 2019:
  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 (110)
Balance December 26, 2020 $ 1,227 
 
  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 (6,077)
Balance December 28, 2019 $ 1,323