Note 5 - Fair Value Measurement
|6 Months Ended|
Apr. 30, 2019
|Notes to Financial Statements|
|Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]||
5.Fair Value Measurement
The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable and current accrued liabilities approximate their fair value as recorded due to the short-term maturity of these instruments, which approximates fair value. The Company’s outstanding obligations on its ABL credit facility are deemed to be at fair value as the interest rates on these debt obligations are variable and consistent with prevailing rates. The Company believes the carrying values of its capital lease obligations represent fair value.
The Company's long-term debt instruments are recorded at their carrying values in the consolidated balance sheets, which
maydiffer from their respective fair values. The fair values of the long-term debt instruments are derived from Level
2inputs. The fair value amount of the Long-term debt instruments at
April 30, 2019for the Successor and at
October 31, 2018for the Predecessor is presented in the table below based on the prevailing interest rates and trading activity of the Notes.
In connection with the acquisition of Camfaud in
November 2016,former Camfaud shareholders were eligible to receive earnout payments (“deferred consideration”) of up to
$3.1million if certain Earnings before interest, taxes, depreciation, and amortization ("EBITDA") targets were met. In accordance with ASC
805,the Company reviewed the deferred consideration on a quarterly basis in order to determine its fair value. Changes in the fair value of the liability are recorded within general and administrative expenses in the consolidated statements of income in the period in which the change was made. The Company estimated the fair value of the deferred consideration based on its probability assessment of Camfaud’s EBITDA achievements during the
3year earnout period. In developing these estimates, the Company considered its revenue and EBITDA projections, its historical results, and general macro-economic environment and industry trends. This fair value measurement was based on significant revenue and EBITDA inputs
notobserved in the market, which represents a Level
The fair value of the deferred consideration was
$1.5million at each of
April 30, 2019 (Successor) and
October 31, 2018 (Predecessor). The change in the fair value measurement of the deferred consideration was
notsignificant to either the Predecessor or Successor periods.
The Company's non-financial assets, which primarily consist of property and equipment, goodwill and other intangible assets, are
notrequired to be carried at fair value on a recurring basis and are reported at carrying value. However, on a periodic basis or whenever events or changes in circumstances indicate that their carrying value
notbe fully recoverable (and at least annually for goodwill and indefinite lived intangibles), non-financial instruments are assessed for impairment and, if applicable, written down to and recorded at fair value.
The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef