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Fair Value of Financial Instruments | 9 Months Ended
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Feb. 02, 2020
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | 13. 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 measured at fair value on a recurring basis:
|  | Fair value measurements at February 2, 2020 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: |  |  |  |  |  |  |  |  |  |  |  |
Premier Money Market Fund |  | $ | 6,334 |  |  | N/A |  | N/A |  | $ | 6,334 |
Short Term Bond Funds |  |  | 4,743 |  |  | N/A |  | N/A |  |  | 4,743 |
Inflation Protected Bond Funds |  |  | 2,837 |  |  | N/A |  | N/A |  |  | 2,837 |
Strategic Income Fund |  |  | 1,001 |  |  | N/A |  | N/A |  |  | 1,001 |
Growth Allocation Fund |  |  | 239 |  |  | N/A |  | N/A |  |  | 239 |
Moderate Allocation Fund |  |  | 138 |  |  | N/A |  | N/A |  |  | 138 |
Other |  |  | 92 |  |  | N/A |  | N/A |  |  | 92 |
|  | Fair value measurements at January 27, 2019 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: |  |  |  |  |  |  |  |  |  |  |  |
Premier Money Market Fund |  | $ | 6,433 |  |  | N/A |  | N/A |  | $ | 6,433 |
Growth Allocation Fund |  |  | 184 |  |  | N/A |  | N/A |  |  | 184 |
Moderate Allocation Fund |  |  | 119 |  |  | N/A |  | N/A |  |  | 119 |
Other |  |  | 98 |  |  | N/A |  | N/A |  |  | 98 |
|  | Fair value measurements at April 28, 2019 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: |  |  |  |  |  |  |  |  |  |  |  |
Premier Money Market Fund |  | $ | 6,639 |  |  | N/A |  | N/A |  | $ | 6,639 |
Growth Allocation Fund |  |  | 203 |  |  | N/A |  | N/A |  |  | 203 |
Moderate Allocation Fund |  |  | 127 |  |  | N/A |  | N/A |  |  | 127 |
Other |  |  | 112 |  |  | N/A |  | N/A |  |  | 112 |
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. Short-Term and Long-Term Investments - Held-To-Maturity Currently, our investments classified as held-to-maturity consist of investment grade U.S. corporate bonds, foreign bonds, and government bonds with remaining maturities that ranged from 1 to 3 years. These investments were classified as held-to-maturity, as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments were recorded as either current or noncurrent in our Consolidated Balance Sheets, based on the contractual maturity date in relation to the respective reporting period, and were recorded at amortized cost. At February 2, 2020, January 27, 2019, and April 28, 2019, our held-to-maturity investments recorded at amortized cost totaled $5.4 million, $13.5 million, and $5.0 million, respectively. The fair value of our held-to-maturity investments at February 2, 2020, January 27, 2019, and April 28, 2019, totaled $5.4 million, $13.5 million and $5.0 million, respectively. Our bond investments were classified as level 2, as they were traded over the counter within a broker network and not on an active market. The fair value of our bonds was determined based on a published source that provided an average bid price. The average bid price was based on various broker prices that were determined based on market conditions, interest rates, and the rating of the bond. Short-Term Investments Available for Sale At February 2, 2020, our short-term investments classified as available for sale totaled $7.6 million and consisted of bond funds. Since these bond funds were classified as available for sale, these investments were recorded at their fair market value and their unrealized gains or losses are included in other comprehensive income (loss). Our bond funds had an accumulated unrealized gain totaling $48,000. At February 2, 2020, the fair value of our bond funds approximated its cost basis. There were no short-term investments classified as available for sale held at January 27, 2019 and April 28, 2019. Long-Term Investments - Rabbi Trust We have a Rabbi Trust to set aside funds for participants of our deferred compensation plan (the “Plan”), which enables the participants to credit their contributions to various investment options of the Plan. The investments associated with the Rabbi Trust consist of a money market fund and various mutual funds that are classified as available for sale. These long-term investments are recorded at their fair values of $7.8 million, $6.8 million, and $7.1 million at February 2, 2020, January 27, 2019, and April 28, 2019, respectively. Our long-term investments had an accumulated unrealized gain of $56,000, $9,000, and $40,000 at February 2, 2020, January 27, 2019, and April 28, 2019, respectively. The fair value of our long-term investments associated with our Rabbi Trust approximates their cost basis. Other The carrying amount of our cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments. Nonrecurring Basis As of February 2, 2020, we had certain assets and a contingent consideration – earn-out obligation that were required to be measured at fair value on a nonrecurring basis.
|  | Fair value measurements at February 2, 2020 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: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill (note 8) |  | N/A |  | N/A |  | $ | 2,442 |  |  | $ | 2,442 |
Tradename (note 7) |  | N/A |  | N/A |  |  | 4,121 |  |  |  | 4,121 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration – Earn-Out Obligation (note 3) |  | N/A |  | N/A |  | $ | — |  |  | $ | — |
The goodwill was recorded at fair market value using the discounted cash flow method that used significant unobservable inputs and was classified as level 3. The tradename was recorded at fair market value using the royalty from relief method that used significant unobservable inputs and was classified as level 3. As of January 27, 2019, we had no assets that were required to be measured at fair value on a nonrecurring basis other than certain assets acquired and liabilities assumed in connection with the eLuxury business combination on June 22, 2018 (see note 3).
|  | Fair value measurements at January 27, 2019 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: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  | N/A |  | N/A |  | $ | 13,653 |  |  | $ | 13,653 |
Tradename |  | N/A |  | N/A |  |  | 6,549 |  |  |  | 6,549 |
Equipment |  | N/A |  | N/A |  |  | 2,179 |  |  |  | 2,179 |
Inventory |  | N/A |  | N/A |  |  | 1,804 |  |  |  | 1,804 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration – Earn-Out Obligation |  | N/A |  | N/A |  | $ | 5,600 |  |  | $ | 5,600 |
The tradename was recorded at fair market value using the royalty from relief method that used significant unobservable inputs and was classified as level 3. The contingent consideration – earn-out obligation was recorded at fair market value using the Black Scholes pricing model. Additionally, we acquired certain current assets, such as accounts receivable and prepaid expenses, and assumed certain liabilities, such as accounts payable and accrued expenses. Based on the nature of these items and their short maturity, the carrying amount of these items approximated their fair values. See note 3 for the final allocation of the acquisition cost to the assets acquired and liabilities assumed based on their fair values.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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