Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Financial Instruments

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Note 12 - Financial Instruments
3 Months Ended
Sep. 30, 2014
Disclosure Text Block Supplement [Abstract]  
Financial Instruments Disclosure [Text Block]

(12)  Fair Value Measurements


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 is calculated based on assumptions that market participants use in pricing the asset or liability, and 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 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 September 30, 2014 and June 30, 2014 (in thousands):


September 30, 2014

 
   

Level 1

   

Level 2

   

Level 3

   

Balance

 

Cash equivalents

  $ 122,315     $ -     $ -     $ 122,315  

Available-for-sale securities

    -       12,878       -       12,878  

Total

  $ 122,315     $ 12,878     $ -     $ 135,193  

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 the first three months of fiscal 2015 or fiscal 2014. At September 30, 2014 and June 30, 2014, $8.0 million and $8.5 million respectively, of the cash equivalents were restricted, and classified as long-term assets.


At September 30, 2014, available-for-sale securities consist of $12.9 million in U.S. municipal bonds, and at June 30, 2014, available-for-sale securities consisted of $18.2 million in U.S. municipal bonds, all with maturities of less than two years. The bonds are rated A/A2 or better by S&P and Moodys respectively. As of September 30, 2014 and June 30, 2014, there were no material gross unrealized gains or losses on available-for-sale securities.


As of September 30, 2014 and June 30, 2014, the contractual maturities of our available-for-sale securities were as follows:


September 30, 2014

 
   

Cost

   

Estimated Fair Value

 

Due in one year or less

  $ 13,119     $ 12,878  

Due after one year through five years

  $ -     $ -  

June 30, 2014

 
   

Cost

   

Estimated Fair Value

 

Due in one year or less

  $ 16,049     $ 15,863  

Due after one year through five years

  $ 2,296     $ 2,290  

No investments have been in a continuous loss position for more than one year, and no other-than-temporary impairments were recognized. See also Note 4, "Restricted Cash and Investments" and Note 5, "Marketable Securities".


Assets and Liabilities Measured at Fair Value on a Non-recurring Basis


We measure certain assets at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. During the three months ended September 30, 2014 and 2013, we did not record any impairments on those assets required to be measured at fair value on a non-recurring basis.