Fair Value Measurements

3 Months Ended

May 31, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurements

10. Fair Value Measurements

Recurring Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. In accordance with ASC 820, Fair Value Measurement ("ASC 820"), certain of our assets and liabilities, which are carried at fair value, are classified in one of the following three categories:

•Level 1: Quoted market prices in active markets for identical assets or liabilities;

•Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs corroborated by market data; or,

•Level 3: Unobservable inputs that are not corroborated by market data and reflect the Company’s own assumptions.

The carrying amount of our financial instruments (cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities) approximates the fair value of these instruments based upon either their short-term nature or their variable market rate of interest. We have not made an option to elect fair value accounting for any of our financial instruments.

Interest Rate Swap Agreement

Our derivative instrument consists of the 2022 Swap, which is considered a Level 2 of the fair value hierarchy and included in "Other assets" as of May 31, 2025 and in "Other accrued liabilities" as of February 28, 2025 in the consolidated balance sheets. The valuation of the 2022 Swap is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including swap rates, spread and/or index levels and interest rate curves. See Note 8 for more information about the 2022 Swap.

Our financial instruments that are measured at fair value on a recurring basis as of May 31, 2025 and February 28, 2025 are as follows (dollars in thousands):

	Carrying Value		Fair Value Measurements Using						Carrying Value		Fair Value Measurements Using
	May 31, 2025		Level 1		Level 2		Level 3		February 28, 2025		Level 1		Level 2		Level 3
Assets:
Interest Rate Swap Agreement(1)	$	37	$	—	$	37	$	—	$	—	$	—	$	—	$	—
Total Assets	$	37							$	—
Liabilities:
Interest Rate Swap Agreement(1)	$	—	$	—	$	—	$	—	$	352	$	—	$	352	$	—
Total Liabilities	$	—							$	352

(1)  The fair value of the Company's interest rate swap agreement was an asset at May 31, 2025 and a liability at February 28, 2025.

Non-recurring Fair Value Measurements

Investment in Joint Venture

The fair value of our investment in the unconsolidated AVAIL JV was determined using the income approach at the date on which we entered into the joint venture. The income approach uses discounted cash flow models that require various observable and non-observable inputs, such as operating margins, revenues, product costs, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates. These valuations resulted in Level 3 non-recurring fair value measurements.

We assess our investment in the unconsolidated AVAIL JV for recoverability when events and circumstances are present that suggest there has been a decline in value, and if it is determined that a loss in value of the investment is other than temporary, the investment is written down to its fair value.

Long-Term Debt

The fair values of our long-term debt instruments are estimated based on market values for debt issued with similar characteristics or rates currently available for debt with similar terms. These valuations are Level 2 non-recurring fair value measurements.

The principal amount of our outstanding debt was $614.9 million and $900.3 million at May 31, 2025 and February 28, 2025, respectively. The estimated fair value of our outstanding debt was $616.4 million and $904.8 million at May 31, 2025 and February 28, 2025, excluding unamortized debt issuance costs. The estimated fair values of our outstanding debt were determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates and credit spreads.