Fair Value Measurements

3 Months Ended

Apr. 30, 2014

Fair Value Measurements

6. Fair Value Measurements

We account for certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. These levels are:

— Level 1 – Observable inputs – quoted prices in active markets for identical assets and liabilities;

— Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities – includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and

— Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions.

At January 31, 2014, we had approximately $1.9 million in assets which were carried at fair value on a recurring basis, which consisted of available-for-sale investments related to our supplemental executive retirement plan (“SERP”). The fair value of these investments was determined using Level 1 inputs. During the first quarter of fiscal 2014, the remaining investments for the SERP were distributed by the Company.

Our long-term debt approximates fair value as of both April 30, 2014 and January 31, 2014, due to the instrument bearing interest at variable rates that are comparable to what is currently available to us. We entered into a second amendment to the Credit Agreement on January 4, 2013, at which time our current interest rates were determined. See Note 4 on Debt for a more detailed discussion of our Credit Agreement.