Note 3 - Fair Value Measurements

12 Months Ended

Jan. 31, 2020

Notes to Financial Statements

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

3

. 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.

•  Level

1

- The assets are recorded at fair value based upon quoted market prices.

•  Level

2

- The asset or liability 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.

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

January 31, 2020

and

January 31, 2019:

	Fair value measurement at reporting date using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	(in thousands)
As of January 31, 2020
Money market mutual funds	$	107,319
Certificates of deposit	$	14,917
Liability related to the interest rate swap			$	(232	)
As of January 31, 2019
Money market mutual funds	$	105,205
Certificates of deposit	$	11,578
Short-term investments	$	1,200
Asset related to the interest rate swap			$	136

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

$14.5

million and

$22.6

million at

January 31, 2020

and

January 31, 2019,

respectively.

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 measurements levels during the

twelve

months ended

January 31, 2020.

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

8

“Debt” within these Notes to Consolidated Financial Statements. The fair value of the interest rate swap is reflected as an asset or liability in the Consolidated Balance Sheets and the change in fair value is reported in “Other (income) expense, net” in the Consolidated Statements of Operations and Comprehensive (Loss) Income. 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

January 31, 2020

and

January 31, 2019

were as follows (in thousands):

	(Liability) Asset
			Fair Value
	Balance Sheet Location		January 31, 2020			January 31, 2019
Derivative instrument:
Interest rate swap		Other (liabilities) assets, net	$	(232	)	$	136
Total			$	(232	)		136

The change in fair value of the interest rate swap recognized in the Consolidated Statement of Operations and Comprehensive (Loss) Income for the

twelve

months ended

January 31, 2020,

2019

and

2018

was $(

368,000

), $(

51,000

) and

$377,000,

respectively.