Note 4 - Fair Value Measurements

9 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

4

)      Fair Value

Measurements

The financial instruments shown below are presented at 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. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are

not

available, valuation models

may

be applied.

Assets and liabilities recorded at fair value in the consolidated balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities and the methodologies used in valuation are as follows:

Level

1

– Quoted prices in active markets for identical assets and liabilities. The Company’s deferred compensation plan assets consist of shares in various mutual funds (for the deferred compensation plan, investments are participant-directed) which invest in a broad portfolio of debt and equity securities. These assets are valued based on publicly quoted market prices for the funds’ shares as of the balance sheet dates.

Level

2

– Inputs, other than quoted prices in an active market, that are observable either directly or indirectly through correlation with market data. For foreign exchange forward contracts and interest rate swaps, the Company values the instruments based on the market price of instruments with similar terms, which are based on spot and forward rates as of the balance sheet dates. The Company has considered the creditworthiness of counterparties in valuing all assets and liabilities.

Level

3

– Unobservable inputs based upon the Company’s best estimate of what market participants would use in pricing the asset or liability.

There were

no

transfers of assets or liabilities between any levels of the fair value measurement hierarchy at

March 31, 2019

and

June 30, 2018.

The Company’s policy is to recognize transfers between levels as of the date they occur.

Cash and cash equivalents, accounts receivable, and accounts payable are carried at cost, which approximates fair value.

Items presented at fair value at

March 31, 2019

and

June 30, 2018

consisted of the following (in thousands):

	March 31, 2019
	Total		Level 1		Level 2		Level 3
Assets
Marketable securities - deferred compensation plan	$	2,485	$	2,485	$	-	$	-
Interest rate swaps		455		-		455		-
Net investment hedge		2,170		-		2,170		-
Liabilities
Foreign exchange contracts	$	3,732	$	-	$	3,732	$	-
Interest rate swaps		721		-		721		-
Contingent acquisition payments (a)		5,730		-		-		5,730
Net investment hedge		2,264		-		2,264		-

	June 30, 2018
	Total		Level 1		Level 2		Level 3
Assets
Marketable securities - deferred compensation plan	$	2,362	$	2,362	$	-	$	-
Foreign exchange contracts		1,357		-		1,357		-
Interest rate swaps		1,325		-		1,325		-
Liabilities
Foreign exchange contracts	$	4,204	$	-	$	4,204	$	-
Contingent acquisition payments (a)		7,535		-		-		7,535

(a)

The fair value of our contingent consideration arrangement is determined based on our evaluation as to the probability and amount of any deferred compensation that has been earned to date.

Our financial liabilities based upon Level

3

inputs consist of contingent consideration arrangements relating to our acquisitions of Horizon Scientific and Piazza Rosa. We are contractually obligated to pay contingent consideration payments in connection with the Horizon Scientific acquisition based on the criteria of continued employment of the seller on the

second

and

third

anniversary of the closing date of the acquisition. We are contractually obligated to pay contingent consideration payments in connection with the Piazza Rosa acquisition based on the achievement of certain revenue targets during each of the

first

three

years following acquisition. Piazza Rosa exceeded the defined revenue targets during the

first

year and a payment was made to the Piazza Rosa sellers during the

first

quarter of fiscal

2019.

The seller of Horizon remained employed on the

second

anniversary of the closing date and a payment was made to the seller in the

second

quarter of fiscal

2019.

We will update our assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions until the consideration is paid. As of

March 31, 2019,

neither the range of outcomes nor the assumptions used to develop the estimate had changed.