Fair Value Measurements

3 Months Ended

Jan. 31, 2020

Under the FASB ASC 820, Fair Value Measurement and Disclosures, a fair value measurement is determined based on the assumptions that a market participant would use in pricing an asset or liability. A three-tiered hierarchy draws distinctions between market participant assumptions based on (i) observable inputs such as quoted prices in active markets (Level 1), (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2) and (iii) unobservable inputs that require the Company to use present value and other valuation techniques in the determination of fair value (Level 3).

The following table sets forth the Company’s financial assets and liabilities as of January 31, 2020 and October 31, 2019, which are measured on a recurring basis during the period, segregated by level within the fair value hierarchy (in thousands):

4. Fair Value Measurements (continued)



January 31, 2020	Level 1		Level 2		Level 3		Total
Assets at fair value:
Equity securities	$	15,322	$	—	$	—	$	15,322



October 31, 2019	Level 1		Level 2		Level 3		Total
Assets at fair value:
Equity securities	$	17,346	$	—	$	—	$	17,346

Equity securities consist of marketable securities in Calavo common stock. At January 31, 2020 and October 31, 2019, the Company owned 200,000 shares, respectively, representing approximately 1.1% of Calavo’s outstanding common stock. These securities are measured at fair value by quoted market prices and changes in fair value are included in the statement of operations.

In fiscal year 2019, the Company sold 50,000 shares of Calavo common stock for a total of $4,786,000 recognizing a loss of $63,000. This loss is included in other (expense) income in the consolidated statement of operations.

The Company recorded an unrealized loss of $2,024,000 during the three months ended January 31, 2020, which is included in other expense in the consolidated statements of operations. The Company recorded an unrealized loss of $3,910,000 during the three months ended January 31, 2019, which is included in other expense in the consolidated statements of operations.

Calavo’s stock price at January 31, 2020 and October 31, 2019 was $76.61 and $86.73 per share, respectively.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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