Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.22.2.2
Fair Value Measurements
6 Months Ended
Jul. 30, 2022
Fair Value Measurements  
Fair Value Measurements

(7)    Fair Value Measurements

GAAP utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to observable quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The valuation for the 8.50% Senior Unsecured Notes due 2026 (the “2026 Notes”) is based on the quoted prices in active markets for identical assets, a Level 1 input. The 2026 Notes (Nasdaq: IMBIL) are listed on the Nasdaq stock exchange, which the Company considers to be an “active market,” as defined by GAAP. Therefore, the 2026 Notes are measured based on quoted prices in an active market and included as Level 1 fair value instruments in the table below.

The carrying amount of the Siena revolving loan (“as described in Note 7 – “Credit Agreements”) approximate its fair values as its variable interest rates are based on prevailing market rates, which are a Level 2 input. The carrying amounts of the GreenLake Note, GCP note, and seller notes (each as described in Note 7 – “Credit Agreements”) reasonably approximate their fair values because their interest rates are similar to market rates for similar instruments, which are Level 2 inputs.

The Company’s financial instruments are listed with their fair values below as of July 30, 2022 and January 29, 2022:

Fair Value Measurements at July 30, 2022

Total

Level 1

Level 2

Level 3

Liabilities:

Revolving loan

$

62,643

$

$

62,643

$

8.5% Senior unsecured notes (IMBIL)

41,600

41,600

GreenLake Note

28,500

28,500

Seller notes

25,627

25,627

GCP note

3,100

3,100

Contingent consideration

2,741

2,741

Fair Value Measurements at January 29, 2022

Total

Level 1

Level 2

Level 3

Liabilities:

Revolving loan

$

60,216

$

$

60,216

$

8.5% Senior unsecured notes (IMBIL)

70,176

70,176

GreenLake Note

28,500

28,500

Seller notes

29,354

29,354

Contingent consideration

3,097

3,097

The Company valued the contingent consideration based on a Monte Carlo valuation method. Significant inputs used in the model includes certain financial metric growth rates, volatility rates, projections associated with the applicable contingency, the interest rate, and the related probabilities and payment structure, which are not observable in the market and are therefore considered to be Level 3 inputs.

Balance, January 29, 2022

$

3,097

Foreign currency translation adjustment

(356)

Balance, July 30, 2022

$

2,741