Fair Value Measurement

3 Months Ended

Apr. 01, 2012

Fair Value Measurement [Abstract]

Fair Value Measurement

NOTE I – Fair Value Measurement

Goodwill represents the excess of the cost of businesses acquired over the fair value of the assets acquired and liabilities assumed. CTS does not amortize goodwill, but tests it for impairment annually using a fair value approach at the reporting unit level. A reporting unit is the operating segment, or a business one level below that operating segment or the component level if discrete financial information is prepared and regularly reviewed by senior management. However, components are aggregated as a single reporting unit if they have similar economic characteristics.

The table below summarizes the non-financial assets that were measured and recorded at fair value on a non-recurring basis as of April 1, 2012 and the loss recorded during the three-months ended April 1, 2012 on those assets:

($ in thousands)
Description	Carrying Value at April 1, 2012		Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Loss for Three- Months Ended April 1, 2012
Goodwill	$	7,872	$	—	$	—	$	7,872	$	—
Intangible assets, other than goodwill	$	34,005	$	—	$	—	$	34,005		—
Long-lived assets	$	89,680	$	—	$	—	$	89,680		39
									$	39

The fair value of these assets were measured and recorded using an income approach. Projected future cash flows related to these assets were used under this approach to determine their fair values.

The following table reconciles the beginning and ending balance of CTS’ goodwill for the period ended April 1, 2012:

($ in thousands)	Total
Balance at January 1, 2012		500
2012 first quarter activity – Note C, “Acquisitions”		7,372
Balance at April 1, 2012	$	7,872

See Note L, “Goodwill and Other Intangible Assets,” for further discussion.

The following table reconciles the beginning and ending balances of CTS’ intangible assets, other than goodwill for the period ended April 1, 2012:

($ in thousands)	Total
Balance at January 1, 2012		29,886
2012 addition – Note C, “Acquisitions”		4,915
2012 first quarter amortization expense		(796	)
Balance at April 1, 2012	$	34,005

See Note L, “Goodwill and Other Intangible Assets,” for further discussion.

The following table reconciles the beginning and ending balances of CTS’ long-lived assets for the period ended April 1, 2012:

($ in thousands)	Total
Balance at January 1, 2012		84,860
Capital expenditures		4,369
Capital expenditures to replace property, plant & equipment damaged in Thailand flood		1,766
Fixed assets acquired in Valpey-Fisher acquisition – Note C		2,790
Depreciation expense		(3,995	)
Transfer to asset held for sale		(350	)
Disposals and write-offs		(39	)
Foreign exchange impact and other		279
Balance at April 1, 2012	$	89,680

The table below summarizes the financial liability that was measured at fair value on a recurring basis as of April 1, 2012:

($ in thousands)	Carrying Value at April 1, 2012		Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Loss for Quarter Ended April 1, 2012
Long-term debt	$	108,700	$	—	$	108,700	$	—	$	—

CTS’ long-term debt consists of a revolving debt agreement. There is a readily determinable market for CTS’ revolving credit debt and it is classified within Level 2 of the fair value hierarchy as the market is not deemed to be active. The fair value of long-term debt was measured using a market approach which uses current industry information.