Note 4 - Fair Value Measurements

6 Months Ended

Jul. 31, 2018

Notes to Financial Statements

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

4 . FAIR VALUE MEASUREMENTS

When determining fair value, the Company uses a

three

-tier value hierarchy which prioritizes the inputs used in measuring fair value. Whenever possible, the Company uses observable market data. The Company relies on unobservable inputs only when observable market data is

not

available. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

The following table sets forth the financial assets, measured at fair value, as of

July 31, 2018

and

January 31, 2018:

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
			(in thousands)
Money market mutual funds as of July 31, 2018 (a)	$	107,131
Money market mutual funds as of January 31, 2018 (a)	$	115,416
Asset related to the interest rate swap as of July 31, 2018 (b)			$	339
Asset related to the interest rate swap as of January 31, 2018 (b)			$	187

___________________________

(a) Money market mutual funds are recorded at fair value based upon quoted market prices.

(b) The asset related to the interest rate swap is recorded at fair value based upon a valuation model that uses relevant observable market inputs at quoted intervals, such as forward yield curves.

Money market mutual funds are classified as part of “Cash and equivalents” in the accompanying Condensed Consolidated Balance Sheets. The amount of cash and equivalents deposited with commercial banks was unchanged at

$32

million as of

July 31, 2018

and

January 31, 2018.

The Company’s note payable bears a variable market interest rate commensurate with the Company’s credit standing. Therefore, the carrying amount outstanding under the note payable reasonably approximates fair value based on Level

2

inputs.

There have been

no

transfers between fair value measurement levels during the

six

months ended

July 31, 2018.

Derivative Instruments

The Company entered into an interest rate swap in

May 2012

to mitigate the exposure to the variability of

one

month LIBOR for its floating rate debt described in Note

6

“Debt” within these Notes to Condensed Consolidated Financial Statements. The fair value of the interest rate swap is reflected as a liability in the Condensed Consolidated Balance Sheets and the change in fair value is reported in “Other (income) expense” in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The fair value of the interest rate swap is estimated as the net present value of projected cash flows based upon forward interest rates at the balance sheet date.

The fair values of the derivative instrument at

July 31, 2018

and

January 31, 2018

were as follows (in thousands):

	Asset
		Fair Value
	Balance Sheet Location	July 31, 201 8		January 31, 201 8
Derivative instrument:
Interest rate swap	Other assets, net	$	339	$	187
Total		$	339	$	187

The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) was

$35,000

and

$152,000

for the

three

and

six

months ended

July 31, 2018

and $(

16,000

) and $(

3,000

) for the

three

and

six

months ended

July 31, 2017.