Fair Value Measurement

6 Months Ended

Jul. 31, 2011

Fair Value Measurement

Fair Value Measurement

(9) Fair Value Measurement

Fair Value Hierarchy

FASB ASC Topic 820 "Fair Value Measurements and Disclosures" specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs) or reflect the Company's own assumptions of market participant valuation (unobservable inputs). In accordance with FASB ASC Topic 820, these two types of inputs have created the following fair value hierarchy:

• Level 1—Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2—Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

• Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

FASB ASC Topic 820 requires the use of observable market data if such data is available without undue cost and effort.

Items Measured at Fair Value on a Recurring Basis

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis at April 30, 2011 consistent with the fair value hierarchy provisions of FASB ASC Topic 820 (in thousands):

Description	Estimated Fair Value at July 31, 2011		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)
Assets:
Money market funds	$	98,340	$	98,340	$	—	$	—
Total Assets	$	98,340	$	98,340	$	—	$	—
Total Liabilities	$	—	$	—	$	—	$	—

At July 31, 2011, the Company did not have any assets or liabilities measured at fair value on a recurring basis using significant other observable inputs (Level 2) or significant unobservable inputs (Level 3).

Fair Value of Financial Instruments

The carrying amount of the Company's financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their respective fair values because of the relatively short period of time between origination of the instruments and their expected realization. The fair value of the Company's revolving credit facility approximates its respective carrying amount because this instrument includes LIBOR-based interest rates that are variable and fluctuate based on market conditions.

The estimated fair values of certain of the Company's long-term debt obligations, based on quoted market prices, as of July 31, 2011 and January 31, 2011 are as follows:

	Carrying Amount		Fair Value
	(In thousands)
As of July 31, 3011:
2.25175% Term Loan due 2013	$	117,399	$	115,345
4.25175% Term Loan due 2016	$	191,101	$	186,323
10.375% Senior Subordinated Notes due 2016	$	134,265	$	140,978
As of January 31, 2011:
2.30344% Term Loan due 2013	$	316,000	$	306,520
10.375% Senior Subordinated Notes due 2016	$	134,265	$	137,622

Financial instruments that potentially subject us to credit risk consist of cash and cash equivalents, and trade accounts receivable. The Company maintains the majority of its cash and cash equivalents balances with recognized financial institutions that follow the Company's investment policy. The Company has not experienced any significant losses on these investments to date. One of the most significant credit risks is the ultimate realization of accounts receivable. This risk is mitigated by (i) ongoing credit evaluation of our customers, and (ii) frequent contact with our customers, especially our most significant customers, thus enabling the Company to monitor current changes in business operations and to respond accordingly. The Company generally does not require collateral for sales on credit. The Company considers these concentrations of credit risks in establishing our allowance for doubtful accounts.