Annual report [Section 13 and 15(d), not S-K Item 405]

Derivatives and Hedging Activities

v3.25.4
Derivatives and Hedging Activities
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities
Note 7 – Derivatives and Hedging Activities
Cash Flow Hedges of Interest Rate Risk
As of December 31, 2025 and 2024, the Company had outstanding derivative agreements with aggregate notional amounts of $75.0 million and $60.0 million, respectively, which were designated as cash flow hedges under U.S. GAAP. The interest rate derivative agreements comprise interest rate collar agreements entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Original Revolving Facility. Under the agreements, the benchmark rate for the Original Revolving Facility floated between no higher than 5.50% and no lower than 4.20% on $25.0 million, and no higher than 5.50% and no lower than 4.035% on $35.0 million, effective from November 13, 2023 until May 12, 2025. Upon the scheduled expiration of the interest rate collar agreements, the Company entered into a new interest rate collar agreement to hedge against interest rate volatility on the Original Revolving Facility and subsequently the New Revolving Facility. Under the agreement, the benchmark rate for the Original Revolving Facility or subsequently the New Revolving Facility will float between no higher than 4.29% and no lower than 3.28% on a total notional amount of $75.0 million, effective from May 12, 2025 to May 12, 2026.
The table below presents the fair value of the Company’s derivative financial instruments designated as a cash flow hedges as well as their classification in the accompanying consolidated balance sheets as of the dates indicated below (in thousands):
Derivatives Designated as Hedging Instruments Balance Sheet Location December 31, 2025 December 31, 2024
Interest rate collars Other liabilities, net $ (5) $ (15)
During the years ended December 31, 2025, 2024 and 2023, the Company recorded net unrealized gains of less than $0.1 million, $0.2 million and $0.1 million, respectively, for changes in the fair value of its cash flow hedges in accumulated other comprehensive loss.
During the years ended December 31, 2025 and 2023, the Company reclassified previous net gains of less than $0.1 million and $6.7 million from accumulated other comprehensive income (loss) into interest expense, net as a result of the hedged transactions impacting earnings. No such amounts were reclassified from accumulated other comprehensive loss into interest expense during the year ended December 31, 2024.
During the next twelve months, the Company estimates that there will be no amounts reclassified from accumulated other comprehensive loss as an increase to interest expense, net.
Derivatives Not Designated as Hedging Instruments
As of each of December 31, 2025 and 2024, the Company had no derivatives that were not designated as qualifying hedging relationships.
Tabular Disclosure of Offsetting Derivatives
The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of the dates indicated below (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.
Offsetting of Derivative Assets and Liabilities
Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
December 31, 2025 $ —  $ (5) $ —  $ —  $ (5) $ —  $ —  $ (5)
December 31, 2024 $ —  $ (15) $ —  $ —  $ (15) $ —  $ —  $ (15)