Company: MRCY
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001049521-25-000062
Chunk: 70

Company: MERCURY SYSTEMS INC
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 8
Chunk 70
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 26, 2025: Fair Value Measurements September 26, 2025Level 1Level 2Level 3Liabilities:Interest rate swap$4,778 $— $4,778 $— Total measured at fair value$4,778 $— $4,778 $— The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, contract assets and liabilities and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The Company determined the carrying value of long-term debt approximated fair value due to variable interest rates charged on the borrowings, which reprice frequently. During the first quarter ended September 29, 2023, the Company entered into an interest rate hedging agreement (the “September 2023 Swap”). The fair value of the September 2023 Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest rates. As of September 26, 2025, the fair value of the September 2023 Swap was a liability of $4,778 and is included within Other non-current liabilities in the Company's Consolidated Balance Sheets. The following table summarizes the Companies' financial instruments measured at fair value on a recurring basis as of June 27, 2025:Fair Value MeasurementsJune 27, 2025Level 1Level 2Level 3Liabilities:Interest rate swap$5,391 $— $5,391 $— Total measured at fair value$5,391 $— $5,391 $— The fair value of the September 2023 Swap is estimated using a discounted cash flow analysis based on the contractual terms of the derivative, leveraging observable inputs other than quoted prices, such as interest rates. As of June 27, 2025, the fair value of the September 2023 Swap was a liability of $5,391 and was included within Other non-current liabilities in the Company's Consolidated Balance Sheets.

Refer to Note N for further information regarding the September 2023 Swap.

D.Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value.