SeaChange International, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Investments in Marketable Securities (Tables)

Investments in Marketable Securities (Tables)

12 Months Ended

Jan. 31, 2014

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of January 31, 2014 and January 31, 2013:


			Fair Value at January 31, 2014 Using
	January 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Amounts in thousands)
Financial assets:
Cash	$	112,271	$	112,271	$	—	$	—
Money market accounts (a)		3,463		3,463		—		—
Available for sale marketable securities:
Current marketable securities:
U.S. treasury notes and bonds—conventional		3,545		3,545		—		—
U.S. government agency issues		2,010		—		2,010		—
Non-current marketable securities:
U.S. government agency issues		6,814		—		6,814		—

Total	$	128,103	$	119,279	$	8,824	$	—


			Fair Value at January 31, 2013 Using
	January 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(Amounts in thousands)
Financial assets (b):
Cash	$	104,109	$	104,109	$	—	$	—
Money market accounts (a)		2,612		2,612		—		—
Available for sale marketable securities:
Current marketable securities:
U.S. treasury notes and bonds—conventional		2,016		2,016		—		—
U.S. government agency issues		4,034		—		4,034		—
Non-current marketable securities:
U.S. treasury notes and bonds—conventional		2,071		2,071		—		—
U.S. government agency issues		5,098		—		5,098		—

Total	$	119,940	$	110,808	$	9,132	$	—

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

a)	Money market funds and U.S. treasury bills are included in cash and cash equivalents on the accompanying consolidated balance sheet and are valued at quoted market prices for identical instruments in active markets.

b)	The above table reflects a revision to reclassify $9.1 million of investments in U.S. treasury notes and bonds held as of January 31, 2013 from Level 1 to Level 2. Management believes this revision is not significant to the financial statements.

c)	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 fiscal year ended January 31, 2014 (amounts in thousands):


	Level 3 Accrued Contingent Consideration
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 January 31, 2014	$	—

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 January 31, 2014 and 2013:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(Amounts in thousands)
January 31, 2014:
Cash	$	112,271	$	—	$	—	$	112,271
Cash equivalents		3,463		—		—		3,463

Cash and cash equivalents		115,734		—		—		115,734

U.S. treasury notes and bonds—short-term		3,540		5				3,545
U.S. government agency issues—short-term		2,005		5		—		2,010
U.S. government agency issues—long-term		6,806		8				6,814

Total cash, cash equivalents and marketable securities	$	128,085	$	18	$	—	$	128,103

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

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

U.S. treasury notes and bonds—short-term		2,015		1				2,016
U.S. treasury notes and bonds—long-term		2,064		7				2,071
U.S. government agency issues—short-term		4,027		7		—		4,034
U.S. government agency issues—long-term		5,083		15				5,098

Total cash, cash equivalents and marketable securities	$	119,910	$	30	$	—	$	119,940

Schedule of Contractual Maturities Available-for-Sale Debt Securities

Contractual maturities of available-for-sale debt securities at January 31, 2014 are as follows (amounts in thousands):


	Estimated Fair Value
Maturity of one year or less	$	5,555
Maturity between one and five years		6,814

Total	$	12,369

- 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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