Quarterly report [Sections 13 or 15(d)]

Derivatives and Hedging Activities

v3.26.3
Derivatives and Hedging Activities
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities
Note 7 – Derivatives and Hedging Activities
Derivatives Designated as Cash Flow Hedges
As of December 31, 2025, the Company had an outstanding derivative agreement with a notional amount of $75.0 million, which was designated as a cash flow hedge under U.S. GAAP. The interest rate derivative agreement was comprised of an interest rate collar agreement entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Original Revolving Facility and subsequently the New Revolving Facility. Under the agreement, the benchmark rate for the applicable borrowing facility floated 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 interest rate collar agreement expired in accordance with its terms on May 12, 2026.
The table below presents the fair value of the Company’s derivative financial instruments designated as 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 September 30, 2026 December 31, 2025
Interest rate collars Other liabilities, net —  (5)
During the nine months ended September 30, 2026, the Company recorded net unrealized gains of less than $0.1 million for changes in the fair value of its cash flow hedge in accumulated other comprehensive income (loss). During the three and nine months ended September 30, 2025, the Company recorded net unrealized gains of less than $0.1 million for changes in the fair value of its cash flow hedges in accumulated other comprehensive loss.
During the nine months ended September 30, 2026, the Company did not reclassify any previous net gains or losses from accumulated other comprehensive income (loss) into interest expense, net as a result of the hedged transactions impacting earnings. During the three and nine months ended September 30, 2025, the Company reclassified previous net gains of less than $0.1 million from accumulated other comprehensive loss into interest expense, net as a result of the hedged transactions impacting earnings.
Derivatives Not Designated as Hedging Instruments
As of September 30, 2026, the Company had one outstanding interest rate cap agreement that was not designated as a qualifying hedging relationship under U.S. GAAP. During August 2026, the Company entered into an interest rate cap agreement for the New Revolving Facility. Under the agreement, the Daily Simple SOFR is capped at 4.25% on a total notional amount of $50.0 million effective from August 7, 2026 to August 7, 2027. As of December 31, 2025, the Company had no derivatives that were not designated as qualifying hedging relationships.
The table below presents the fair value of the Company’s derivative financial instruments not designated as cash flow hedges as well as their classification in the accompanying consolidated balance sheets as of the dates indicated below (in thousands):
Derivatives Not Designated as Hedging Instruments Balance Sheet Location September 30, 2026 December 31, 2025
Interest rate cap Other assets, net $ 129  $ — 
During the three and nine months ended September 30, 2026, the Company recognized changes in fair value of its derivatives not designated as hedging instruments of $0.1 million in other income on the consolidated statements of operations. No such amounts were recognized during the three and nine months ended September 30, 2025.
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
September 30, 2026 $ 129  $ —  $ —  $ 129  $ —  $ —  $ —  $ 129 
December 31, 2025 $ —  $ (5) $ —  $ —  $ (5) $ —  $ —  $ (5)