Annual report pursuant to Section 13 and 15(d)

Note 17 - Financial Instruments

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Note 17 - Financial Instruments
12 Months Ended
Jun. 30, 2015
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
(17)     Financial Instruments
 
We determine fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the Company. In addition, the fair value of liabilities includes consideration of non-performance risk including our own credit risk. Each fair value measurement is reported in one of the three levels, determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
 
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.
 
Level 2 – inputs are based upon 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 or can be corroborated by observable market data for substantially the full term of the assets or liabilities
.
 
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques
.
 
The following section describes the valuation methodologies we use to measure different financial assets and liabilities at fair value.
 
Assets and Liabilities Measured at Fair Value on a Recurring Basis
 
The following table presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and June 30, 2014 (in thousands):
 
June 30, 2015
 
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 84,192     $ -     $ -     $ 84,192  
Available-for-sale securities
    -       2,198       -       2,198  
Total
  $ 84,192     $ 2,198     $ -     $ 86,390  
 
 
June 30, 2014
 
   
Level 1
   
Level 2
   
Level 3
   
Balance
 
Cash equivalents
  $ 117,683     $ -     $ -     $ 117,683  
Available-for-sale securities
    -       18,153       -       18,153  
Total
  $ 117,683     $ 18,153     $ -     $ 135,836  
 
 
Cash equivalents consist of money market accounts, and mutual funds in U.S. government and agency fixed income securities. We use quoted prices in active markets for identical assets or liabilities to determine fair value. There were no transfers between level 1 and level 2 during fiscal years 2015 or 2014. At June 30, 2015 and 2014, $8.0 million and $8.5 million, respectively, of cash equivalents were restricted and classified as a long-term asset.
 
At June 30, 2015 available-for-sale securities consist of $2.2 million of U.S. municipal bonds, and at June 30, 2014, available for sale securities consisted of $18.2 million in U.S. municipal bonds. All securities in both years have maturities of less than two years, and are rated A/A2 or better by S&P/Moody’s respectively. There were no material gross unrealized gains or losses on available-for-sale securities at June 30, 2015 or June 30, 2014.
 
Additional information on available-for-sale securities balances at June 30 are provided in the following table (in thousands).
 
   
Amortized
   
Fair
 
   
Cost Basis
   
Value
 
2015
  $ 2,155     $ 2,198  
2014
  $ 17,909     $ 18,153  
 
The contractual maturities of our available-for-sale investments as of June 30, 2015 and 2013 were as follows (in thousands):
 
 
June 30, 2015
 
           
Estimated
 
   
Cost
   
Fair Value
 
Due in one year or less
  $ 2,296     $ 2,198  
Due after one year through five years
  $ -     $ -  
 
 
June 30, 2014
 
           
Estimated
 
   
Cost
   
Fair Value
 
Due in one year or less
  $ 16,049     $ 15,863  
Due after one year through five years
  $ 2,296     $ 2,290  
 
Proceeds from sales of investments available for sale were $15.4 million in fiscal 2015 and $14.9 million during fiscal 2014, resulting in no material gain or loss in either period. There were no investments that have been in a continuous loss position for more than one year, and there have been no other-than-temporary impairments recognized.
 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended June 30, 2015, we determined that certain long-lived assets of our retail design centers in Belgium were impaired, and an impairment charge of $0.8 million was recorded. The Company’s decision during the third quarter of fiscal 2015 to exit the lease in Brussels led to our re-evaluation of the future cash flows of that asset group over a shorter useful life than previously expected.