v3.26.1
Fair Value
 3 Months Ended
May 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value
Note 10 - Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuation techniques under the accounting guidance related to fair value measurements are based on observable and unobservable inputs. These inputs are classified into the following hierarchy:

Level 1:Quoted prices for identical assets or liabilities in active markets;

Level 2:Observable inputs other than quoted prices that are directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets; quoted prices for similar or identical assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and

Level 3:Unobservable inputs that reflect the reporting entity’s own assumptions.
Recurring Fair Value Measurements

All of our financial assets and liabilities, except for our investments in U.S. Treasury Bills and our contingent consideration liability, are classified as Level 2 because their valuation is dependent on observable inputs and other quoted prices for similar assets or liabilities, or model-derived valuations whose significant value drivers are observable. Our investments in U.S. Treasury Bills are classified as Level 1 because their value is based on quoted prices in active markets for identical assets. Our contingent consideration liability is classified as Level 3 because its valuation is primarily based on a significant input unobservable in the market, specifically, projected adjusted EBITDA derived from internal forecasts.

The following table presents the fair value of our financial assets and liabilities:
 
Fair Value
(in thousands)May 31, 2026February 28, 2026
Assets: 
Cash equivalents (money market accounts)$6,655 $4,189 
U.S. Treasury Bills
11,138 11,175 
Interest rate swaps1,729 381 
Foreign currency derivatives1,202 375 
Total assets$20,724 $16,120 
  
Liabilities: 
Interest rate swaps$— $196 
Contingent consideration
400 5,400 
Foreign currency derivatives1,563 2,954 
Total liabilities$1,963 $8,550 

All of our financial assets and liabilities, except for our investments in U.S. Treasury Bills, are measured and recorded at fair value on a recurring basis. Our investments in U.S. Treasury Bills are recorded at amortized cost. As of May 31, 2026 and February 28, 2026, the current carrying amounts of our U.S. Treasury Bills were $2.5 million and $2.6 million, respectively, and were included within prepaid expenses and other current assets in our condensed consolidated balance sheets. As of May 31, 2026 and February 28, 2026, the non-current carrying amounts of our U.S. Treasury Bills were $8.6 million and $8.5 million, respectively, and were included within other assets in our condensed consolidated balance sheets.

The carrying amounts of cash and cash equivalents, accounts payable, accrued expenses and other current liabilities and income taxes receivable and payable approximate fair value because of the short maturity of these items. The carrying amounts of receivables approximate fair value due to the effect of the related allowance for credit losses. The carrying amount of our floating rate long-term debt approximates its fair value.

Our investments in U.S. Treasury Bills are classified as held-to-maturity because we have the positive intent and ability to hold the securities to maturity. We invest in U.S. Treasury Bills with maturities ranging from two to five years. As of May 31, 2026 and February 28, 2026, gross unrealized gains were immaterial and $0.1 million, respectively, and losses were not material for both periods. During both the three months ended May 31, 2026 and 2025, we recognized interest income on these investments of $0.1 million, which is included in “Non-operating income, net” in our condensed consolidated statements of income (loss).
We use foreign currency forward contracts to manage our exposure to changes in foreign currency exchange rates. In addition, we use interest rate swaps to manage our exposure to changes in interest rates. All of our derivative assets and liabilities are recorded at fair value. See Notes 11 and 12 for more information on our derivatives.

In connection with the acquisition of Olive & June in December 2024, we recognized contingent consideration, as a result of the total purchase consideration including contingent cash consideration of up to $15.0 million payable annually in three equal installments subject to Olive & June achieving certain adjusted EBITDA targets during calendar years 2025, 2026 and 2027. If the annual adjusted EBITDA target is not met, no payment is required. As of the acquisition date, we recorded a liability for the estimated fair value of the contingent consideration of $4.1 million. This contingent consideration liability is remeasured at fair value each reporting period until the contingency is resolved, with changes in fair value recognized in SG&A. The fair value of the contingent consideration liability was determined using a Monte Carlo simulation model, which utilizes projected adjusted EBITDA and corresponding volatility and discount rates to estimate the probability of the adjusted EBITDA targets being achieved. The projected adjusted EBITDA during the earn-out period was derived from internal forecasts and represents a Level 3 input, and was discounted using an estimated discount rate of 14% and 13% as of May 31, 2026 and February 28, 2026, respectively. Adjusted EBITDA volatility was calculated based upon peer companies, and the third quartile of 33% and 41% was selected as a key input into the Monte Carlo simulation model as of May 31, 2026 and February 28, 2026, respectively. In the simulated scenarios where a payment is earned, the projected contingent payments were discounted using an estimated credit risk discount rate of 6.9% and 6.6%, as of May 31, 2026 and February 28, 2026, respectively. Changes in these inputs may result in a significant increase or decrease in the fair value of the contingent consideration liability with a corresponding impact to SG&A.

Level 3 Fair Value Measurements

The following table presents the changes in our Level 3 contingent consideration liability:

Three Months Ended May 31,
(in thousands)20262025
Balance at beginning of period
$5,400 $4,100 
Changes in fair value— — 
Settlements (1)(5,000)— 
Balance at end of period (2)$400 $4,100 
(1)Represents a contingent consideration payment of $5.0 million in April 2026 based on Olive & June’s achievement of the adjusted EBITDA target for calendar year 2025.
(2)As of May 31, 2026 and May 31, 2025, the estimated fair value of the contingent consideration liability was $0.4 million and $4.1 million, respectively, of which $0.3 million and $1.8 million was included within accrued expenses and other current liabilities, respectively, and $0.1 million and $2.3 million was included within other liabilities, non-current, respectively, in our condensed consolidated balance sheet.