SeaChange International, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

9 Months Ended

Oct. 31, 2013

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

Our financial assets and liabilities that are measured at fair value on a recurring basis as of October 31, 2013 and January 31, 2013 are as follows:


			Fair Value at October 31, 2013 Using
			Quoted
			Prices in		Significant
			Active		Other		Significant
			Markets for		Observable		Unobservable
	October 31,		Identical Assets		Inputs		Inputs
	2013		(Level 1)		(Level 2)		(Level 3)
	(Amounts in thousands)
Financial assets:
Cash	$	109,648	$	109,648	$	—	$	—
Money market accounts (a)		4,459		4,459		—		—
Available for sale marketable securities:
Current marketable securities:
U.S. government agency issues		3,021		3,021		—		—
Non-current marketable securities:
U.S. government agency issues		8,360		8,360		—		—

Total	$	125,488	$	125,488	$	—	$	—


			Fair Value at January 31, 2013 Using
			Quoted
			Prices in		Significant
			Active		Other		Significant
			Markets for		Observable		Unobservable
	January 31,		Identical Assets		Inputs		Inputs
	2013		(Level 1)		(Level 2)		(Level 3)
	(Amounts in thousands)
Financial assets:
Cash	$	104,109	$	104,109	$	—	$	—
Money market accounts (a)		2,612		2,612		—		—
Available for sale marketable securities:
Current marketable securities:
U.S. government agency issues		6,104		6,104		—		—
Non-current marketable securities:
U.S. government agency issues		7,169		7,169		—		—

Total	$	119,994	$	119,994	$	—	$	—

Other liabilities:
Acquisition-related consideration (b)	$	5,656	$	—	$	—	$	5,656

(a)	Money market funds and U.S. government agency securities, included in cash and cash equivalents on the accompanying consolidated balance sheets, are valued at quoted market prices for identical instruments in active markets.

(b)	The fair value of our contingent consideration arrangement is determined based on our evaluation as to the probability and amount of any earn-out that will be achieved based on expected future performance by the acquired entity, as well as the fair value of fixed purchase price.

Reconciliation of Liabilities Measured at Fair Value on Recurring Basis

The following table sets forth a reconciliation of liabilities measured at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) for the nine months ended October 31, 2013:


	Level 3
	Accrued Contingent
	Consideration
	(Amounts in thousands)
Ending balance January 31, 2013	$	5,656
Change in fair value of contingent consideration		(60	)
Contingency payment/Issuance of stock		(5,619	)
Translation adjustment		23

Ending balance October 31, 2013	$	—

Summary of Available-for-Sale Securities

The following is a summary of available-for-sale securities, including the cost basis, aggregate fair value and gross unrealized gains and losses, for cash equivalents, short- and long-term marketable securities portfolio as of October 31, 2013 and January 31, 2013:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(Amounts in thousands)
October 31, 2013:
Cash	$	109,648	$	—	$	—	$	109,648
Cash equivalents		4,459		—		—		4,459

Cash and cash equivalents		114,107		—		—		114,107

U.S. government agency issues - short-term		3,019		2		—		3,021
U.S. government agency issues - long-term		8,338		22		—		8,360

Total cash equivalents and marketable securities	$	125,464	$	24	$	—	$	125,488

January 31, 2013:
Cash	$	104,109	$	—	$	—	$	104,109
Cash equivalents		2,612		—		—		2,612

Cash and cash equivalents		106,721		—		—		106,721

U.S. government agency issues - short-term		6,043		61		—		6,104
U.S. government agency issues - long-term		7,147		22		—		7,169

Total cash equivalents and marketable securities	$	119,911	$	83	$	—	$	119,994

Schedule of Contractual Maturities Available-for-Sale Investments

The following is a schedule of the contractual maturities of available-for-sale investments as of October 31, 2013:


	Estimated
	Fair Value
Maturity of one year or less	$	3,021
Maturity between one and five years		8,360

Total	$	11,381

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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