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Fair Value of Financial Instruments
 9 Months Ended
Jan. 26, 2014
Fair Value of Financial Instruments
10. Fair Value of Financial Instruments
 
ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company’s assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:
 
Level 1 – Quoted market prices in active markets for identical assets or liabilities;
 
Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and
 
Level 3 – Unobservable inputs developed using the company’s estimates and assumptions, which reflect those that market participants would use.
 
Recurring Basis
 
The following table presents information about assets and liabilities measured at fair value on a recurring basis:
 
Fair value measurements at January 26, 2014 using:
       
   
Quoted prices in
 active markets
 for identical
 assets
  
Significant other
 observable inputs
  
Significant
 unobservable
 inputs
      
                         
(amounts in thousands) 
  
Level 1
  
Level 2
  
Level 3
  
Total
                         
Assets:
                        
Low Duration Bond Fund
   $ 2,069       N/A       N/A     $ 2,069  
Limited Term Bond Fund
     2,570       N/A       N/A       2,570  
Intermediate Term Bond Fund
     1,612       N/A       N/A       1,612  
 
 
Fair value measurements at January 27, 2013 using:
       
   
Quoted prices in
 active markets
 for identical
 assets
  
Significant other
 observable inputs
  
Significant
 unobservable
 inputs
      
                         
(amounts in thousands) 
  
Level 1
  
Level 2
  
Level 3
  
Total
                         
Assets:
                        
Low Duration Bond Fund
   $ 2,066       N/A       N/A     $ 2,066  
Limited Term Bond Fund
     2,070       N/A       N/A       2,070  
Intermediate Term Bond Fund
     1,101       N/A       N/A       1,101  
 
 
Fair value measurements at April 28, 2013 using:
       
   
Quoted prices in
 active markets
 for identical
 assets
  
Significant other
 observable inputs
  
Significant
 unobservable
 inputs
      
                         
(amounts in thousands) 
  
Level 1
  
Level 2
  
Level 3
  
Total
                         
Assets:
                        
Low Duration Bond Fund
   $ 2,076       N/A       N/A     $ 2,076  
Limited Term Bond Fund
     2,092       N/A       N/A       2,092  
Intermediate Term Bond Fund
     1,118       N/A       N/A       1,118  
 
The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.
 
Our short-term investments include short-term bond funds, are classified as available-for-sale, and their unrealized gains or losses are included in other comprehensive income (loss). Our short-term bond funds were recorded at their fair value of $6.3 million, $5.2 million, and $5.3 million at January 26, 2014, January 27, 2013, and April 28, 2013, respectively. Our short-term bond funds had an accumulated unrealized loss totaling $74,000 at January 26, 2014, an accumulated unrealized gain totaling $26,000 at January 27, 2013, and an accumulated unrealized gain totaling $54,000 at April 28, 2013. At January 26, 2014, January 27, 2013, and April 28, 2013 the fair value of our short-term bond funds approximated its cost basis.
 
The carrying amount of cash and cash equivalents, a deposit account included in short-term investments, accounts receivable, other current assets, accounts payable, accrued expenses, and a line of credit approximates fair value because of the short maturity of these financial instruments.
 
Nonrecurring Basis
 
As of January 26, 2014, we had no assets that are required to be measured at fair value on a nonrecurring basis other than the assets acquired from Bodet & Horst (see note 3) that were acquired at fair value.

Fair value measurements at January 26, 2014 using:
       
   
Quoted prices in
 active markets
 for identical
 assets
  
Significant other
 observable inputs
  
Significant
 unobservable
 inputs
      
                         
(amounts in thousands) 
  
Level 1
  
Level 2
  
Level 3
  
Total
                         
Assets:
                        
Equipment
   $ -     $ 890     $ -     $ 890  
Non-compete Agreement
     -       -       882       882  
Customer Relationships
     -       -       868       868  

The equipment was classified as level 2 as the fair value was determined using quoted market prices from a third party. The non-compete was recorded at its fair value using a discounted cash flow valuation model that used significant unobservable inputs and was classified as level 3. The customer relationships were recorded at fair value using a multi-period excess earnings valuation model that used significant unobservable inputs and was classified as level 3.