v3.26.1
Fair Value Measurements
 3 Months Ended
May 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements
11. Fair Value Measurements
Recurring Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. In accordance with ASC 820, Fair Value Measurement ("ASC 820"), certain of our assets and liabilities, which are carried at fair value, are classified in one of the following three categories:
•Level 1: Quoted market prices in active markets for identical assets or liabilities;
•Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs corroborated by market data; or,
•Level 3: Unobservable inputs that are not corroborated by market data and reflect the Company’s own assumptions.
The carrying amount of our financial instruments (cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities) approximates the fair value of these instruments based upon either their short-term nature or their variable market rate of interest. We have not made an option to elect fair value accounting for any of our financial instruments.
Interest Rate Swap Agreement
Our derivative instrument consists of the 2025 Swap, which is considered Level 2 of the fair value hierarchy. The 2025 Swap is included in "Other assets" and "Other long-term liabilities" as of May 31, 2026 and February 28, 2026, respectively, in the consolidated balance sheets. The valuation of the 2025 Swap is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivative. This analysis reflects the contractual terms of the derivative, including the period to maturity, and uses observable market-based inputs, including swap rates, spread, and/or index levels and interest rate curves. See Note 9 for more information about the 2025 Swap.
Our financial instruments that are measured at fair value on a recurring basis as of May 31, 2026 and February 28, 2026 are as follows (in thousands):
Carrying Value as of May 31, 2026Fair Value Measurements UsingCarrying Value as of February 28, 2026Fair Value Measurements Using
Level 1Level 2Level 3Level 1Level 2Level 3
Assets
Interest Rate Swap Agreement(1)
$25 $— $25 $— $— $— $— $— 
Total Assets $25 $— 
Liabilities
Interest Rate Swap Agreement(1)
$— $— $— $— $1,847 $— $1,847 $— 
Total Liabilities$— $1,847 
(1)
The interest rate swap agreement included in the table above represents the 2025 Swap at May 31, 2026 and February 28, 2026.
Non-recurring Fair Value Measurements
Investment in Joint Venture
The fair value of our investment in the unconsolidated AVAIL JV was determined using the income approach at the date on which we entered into the joint venture. The income approach uses discounted cash flow models that require various observable and non-observable inputs, such as operating margins, revenues, product costs, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates. These valuations resulted in Level 3 non-recurring fair value measurements.
We assess our investment in the unconsolidated AVAIL JV for recoverability when events and circumstances are present that suggest there has been a decline in value, and if it is determined that a loss in value of the investment is other-than-temporary, the investment is written down to its fair value.
Long-Term Debt
The fair values of our long-term debt instruments are estimated based on market values for debt issued with similar characteristics or rates currently available for debt with similar terms. These valuations are Level 2 non-recurring fair value measurements.
The principal amount of our outstanding debt under the 2022 Credit Agreement was $365.0 million and $385.0 million at May 31, 2026 and February 28, 2026, respectively. The estimated fair value of our outstanding debt was $365.8 million and $385.5 million at May 31, 2026 and February 28, 2026, excluding unamortized debt issuance costs. The estimated fair values of our outstanding debt were determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates and credit spreads. The carrying amount of the Receivables Securitization Facility approximates the fair value.