Note 2 - Fair Value Measurements

12 Months Ended

Jan. 31, 2017

Notes to Financial Statements

Fair Value, Measurement Inputs, Disclosure [Text Block]

2.

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 - Money market mutual funds are recorded at fair value based upon quoted market prices.

• Level 2 - The 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, measured at fair value, as of

January

31,

2017

and

January

31,

2016:

	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)
Money market mutual funds as of January 31, 2017	$	116,043
Money market mutual funds as of January 31, 2016	$	113,984
Liability related to the interest rate swap as of January 31, 2017			$	(190	)
Liability related to the interest rate swap as of January 31, 2016			$	(675	)

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

$29

million and

$24

million as of

January

31,

2017

and

January

31,

2016,

respectively.

The Company’s line of credit and notes payable both bear a variable market interest rate commensurate with the Company’s credit standing. Therefore, the carrying amounts outstanding under the line of credit and note payable reasonably approximate fair value based on Level

2

inputs.

There have been no transfers between fair value measurements levels during the

12

months ended

January

31,

2017.

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 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 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,

2017

and

January

31,

2016

were as follows (in thousands):

	Liability
		Fair Value
	Balance Sheet Location	January 31, 2017			January 31, 2016
Derivative instrument:
Interest rate swap	Other liabilities net	$	(190	)	$	(675	)
Total		$	(190	)	$	(675	)

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

twelve

months ended

January

31,

2017,

2016

and

2015

was

$485,000,

$(48,000)

and

$(877,000),

respectively.