FAIR VALUE MEASURESMENTS - Note 2

12 Months Ended

Mar. 31, 2017

Cash and Cash Equivalents [Abstract]

FAIR VALUE MEASURESMENTS - Note 2

2. FAIR VALUE MEASURESMENTS

Cash, cash equivalents, available-for-sale investments, and contingent consideration were (in thousands):

				Gross		Gross				Cash and
		Amortized		Unrealized		Unrealized		Estimated		Cash		Short-Term
As of March 31, 2017		Costs		Gain		Loss		Fair Value		Equivalents		Investments
Cash	$	29,122	$	-	$	-	$	29,122	$	29,122	$	-
Level 1:
Money market funds		11,908		-		-		11,908		11,908		-
Mutual funds		2,000		-		(194)		1,806		-		1,806
Subtotal		43,030		-		(194)		42,836		41,030		1,806
Level 2:
Commercial paper		19,144		8		-		19,152		-		19,152
Corporate debt		83,995		61		(58)		83,998		-		83,998
Asset backed securities		26,906		4		(22)		26,888		-		26,888
Mortgage backed securities		116		-		(1)		115		-		115
Agency bond		2,000		-		-		2,000		-		2,000
Subtotal		132,161		73		(81)		132,153		-		132,153
Total assets	$	175,191	$	73	$	(275)	$	174,989	$	41,030	$	133,959
Level 3:
Contingent consideration	$	-	$	-	$	-	$	148	$	-	$	-
Total liabilities	$	-	$	-	$	-	$	148	$	-	$	-

				Gross		Gross				Cash and
		Amortized		Unrealized		Unrealized		Estimated		Cash		Short-Term
As of March 31, 2016		Costs		Gain		Loss		Fair Value		Equivalents		Investments
Cash	$	18,596	$	-	$	-	$	18,596	$	18,596	$	-
Level 1:
Money market funds		14,980		-		-		14,980		14,980		-
Mutual funds		2,000		-		(187)		1,813		-		1,813
Subtotal		35,576		-		(187)		35,389		33,576		1,813
Level 2:
Commercial paper		6,794		2		-		6,796		-		6,796
Corporate debt		85,164		78		(28)		85,214		-		85,214
Municipal securities		1,007		-		(1)		1,006		-		1,006
Asset backed securities		24,614		7		(11)		24,610		-		24,610
Mortgage backed securities		2,045		-		(17)		2,028		-		2,028
Agency bond		6,805		1		-		6,806		-		6,806
International government securities		1,000		1		-		1,001		-		1,001
Subtotal		127,429		89		(57)		127,461		-		127,461
Total assets	$	163,005	$	89	$	(244)	$	162,850	$	33,576	$	129,274
Level 3:
Contingent consideration	$	-	$	-	$	-	$	341	$	-	$	-
Total liabilities	$	-	$	-	$	-	$	341	$	-	$	-

Contractual maturities of investments as of March 31, 2017 are set forth below (in thousands):

		Estimated
		Fair Value
Due within one year	$	78,039
Due after one year		55,920
Total	$	133,959

Contingent Consideration and Escrow Liability

The Company's contingent consideration liability and escrow liability, included in other accrued liabilities and noncurrent liabilities on the consolidated balance sheets, is associated with the Quality Software Corporation (QSC) acquisition made in the first quarter of fiscal 2016. Amounts held in escrow were measured at fair value using present value computations at the time of acquisition. The contingent consideration was measured at fair value using a probability weighted average of the potential payment outcomes that would occur should certain contract milestones be reached. As there was no market data available to use in valuing the contingent consideration; therefore, the Company developed its own assumptions related to the achievement of the milestones to evaluate the fair value of the liability. As such, the contingent consideration is classified within Level 3 as described below.

The items are classified as Level 3 within the valuation hierarchy, consisting of contingent consideration and escrow liability related to the QSC acquisition, were valued based on an estimate of the probability of success of the milestones being achieved and present value computations, respectively. The table below presents a roll-forward of the contingent consideration and escrow liability valued using a Level 3 input (in thousands):

		Years Ended March 31,
		2017		2016
Balance at beginning of period	$	341	$	-
Purchase price contingent consideration		-		541
Fair value adjustment		107		-
Contingent consideration payments		(300)		(200)
Balance at end of period	$	148	$	341