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Note 4 - Fair Value Measurements
 3 Months Ended
Apr. 30, 2020
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.
 
•  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
April 30, 2020
and
January 31, 2020:
 
   
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 April 30, 2020
  
 
 
 
  
 
 
 
  
 
 
 
Money market mutual funds
   $
112,299
      
 
          
Certificates of deposit
   $
10,114
      
 
          
Liability related to the interest rate swap
    
 
     $
(483
 )        
                         
As of January 31, 2020
  
 
 
 
  
 
 
 
  
 
 
 
Money market mutual funds
   $
107,319
      
 
          
Certificates of deposit
   $
14,917
      
 
          
Liability related to the interest rate swap
    
 
     $
(232
 )        
 
Money market mutual funds and certificates of deposit 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
$17.7
million and
$14.5
million at
April 30, 2020
and
January 31, 2020,
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 measurement levels during the
three
months ended
April 30, 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
7
“Debt” within these Notes to Condensed Consolidated Financial Statements. The fair value of the interest rate swap is reflected as an asset or liability in the Condensed Consolidated Balance Sheets and the change in fair value is reported in “Other (income) expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive 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
April 30, 2020
and
January 31, 2020
were as follows (in thousands):
 
 
Liability
  
     
Fair Value
  
 
Balance Sheet
Location
  
April 30,
2020
    
January 31,
2020
  
Derivative instrument:
                  
Interest rate swap
Other liabilities
   $
(483
)
   $
(232
)
Total
 
   $
(483
)
   $
(232
)
 
The change in fair value of the interest rate swap recognized in the Condensed Consolidated Statement of Operations and Comprehensive Loss for the
three
months ended
April 30, 2020
and
2019
was $(
251,000
) and $(
91,000
), respectively.