Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 4 – Fair Value Measurements

The FASB's guidance regarding fair value measurements establishes a common definition for fair value to be applied to guidance requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The guidance does not require any new fair value measurements, but rather applies to all other accounting guidance that requires or permits fair value measurements.

The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that not active.

• Level 3: Unobservable inputs that reflect the reporting entity's own assumptions.

The Company values its company-owned life insurance policies, various deferred compensation assets and liabilities, acquisition-related consideration and an obligation related to a non-competition agreement at fair value, and valued its interest rate swaps at fair value prior to their maturity in the third quarter of 2012. The Company's assets and liabilities subject to fair value measurement are as follows:

				Fair Value Measurements at September 30, 2012
		Fair Value		Using Fair Value Hierarchy
		as of
Assets		September 30, 2012		Level 1		Level 2		Level 3
Company-owned life insurance		$	1,650	$	0	$	1,650	$	0
Company-owned life insurance - Deferred compensation assets			444		0		444		0
Other deferred compensation assets
	Large capitalization registered investment companies		63		63		0		0
	Mid capitalization registered investment companies		5		5		0		0
	Small capitalization registered investment companies		9		9		0		0
	International developed and emerging markets registered investment
companies			34		34		0		0
	Fixed income registered investment companies		9		9		0		0
Total		$	2,214	$	120	$	2,094	$	0

				Fair Value Measurements at September 30, 2012
		Fair Value		Using Fair Value Hierarchy
		as of
Liabilities		September 30, 2012		Level 1		Level 2		Level 3
Deferred compensation liabilities
	Large capitalization registered investment companies	$	334	$	334	$	0	$	0
	Mid capitalization registered investment companies		85		85		0		0
	Small capitalization registered investment companies		71		71		0		0
	International developed and emerging markets registered investment
companies			174		174		0		0
	Fixed income registered investment companies		49		49		0		0
	Fixed general account		171		0		171		0
Acquisition-related consideration			8,471		0		0		8,471
Total		$	9,355	$	713	$	171	$	8,471

				Fair Value Measurements at December 31, 2011
		Fair Value		Using Fair Value Hierarchy
		as of
Assets		December 31, 2011		Level 1		Level 2		Level 3
Company-owned life insurance		$	1,508	$	0	$	1,508	$	0
Company-owned life insurance - Deferred compensation assets			487		0		487		0
Other deferred compensation assets
	Large capitalization registered investment companies		64		64		0		0
	Mid capitalization registered investment companies		4		4		0		0
	Small capitalization registered investment companies		7		7		0		0
	International developed and emerging markets registered investment
companies			32		32		0		0
	Fixed income registered investment companies		8		8		0		0
Total		$	2,110	$	115	$	1,995	$	0

				Fair Value Measurements at December 31, 2011
		Fair Value		Using Fair Value Hierarchy
		as of
Liabilities		December 31, 2011		Level 1		Level 2		Level 3
Deferred compensation liabilities
	Large capitalization registered investment companies	$	318	$	318	$	0	$	0
	Mid capitalization registered investment companies		83		83		0		0
	Small capitalization registered investment companies		68		68		0		0
	International developed and emerging markets registered investment
companies			168		168		0		0
	Fixed income registered investment companies		50		50		0		0
	Fixed general account		177		0		177		0
Interest rate derivatives			418		0		418		0
Acquisition-related consideration			8,898		0		0		8,898
Total		$	10,180	$	687	$	595	$	8,898

The fair values of Company-owned life insurance (“COLI”) and COLI deferred compensation assets are based on quotes for like instruments with similar credit ratings and terms. The fair values of other deferred compensation assets and liabilities are based on quoted prices in active markets. The fair values of interest rate derivatives were based on quoted market prices from various banks for similar instruments. The fair value of the earnout is based on unobservable inputs and is classified as Level 3. Significant inputs and assumptions are management's estimate of the probability of the earnout ultimately being met/paid and the discount rate used to present value the liability. The fair value of the holdbacks and the obligation related to a non-competition agreement are also based on unobservable inputs and are classified as Level 3. The significant inputor assumption for both the obligation related to the non-competition agreement and the holdbacks is management's estimate of the discount rate used to present value the liabilities. Significant changes in any Level 3 input or assumption in isolation would result in increases or decreases to the fair value measurements for the holdbacks, the earnout and the obligation related to the non-competition agreement.

Changes in the fair value of the Level 3 liabilities during the nine months ended September 30, 2012were as follows:

						Non-competition
		Earnout		Hold-back		Agreement		Hold-back		Hold-back
		Summit		Tecniquimia		Obligation		GW Smith		NP Coil Dexter		Total
Balance at December 31, 2011		$	5,444	$	1,877	$	675	$	902	$	0	$	8,898
	Acquisitions		0		0		0		0		927		927
	Interest accretion		592		123		33		98		35		881
	Payments		0		(2,000)		(250)		0		0		(2,250)
	Currency exchange adjustment		0		0		0		0		15		15
Balance at September 30, 2012		$	6,036	$	0	$	458	$	1,000	$	977	$	8,471

Quantitative information about the Company's Level 3 fair value measurements at September 30, 2012were as follows:

	Fair value at September 30, 2012	Valuation technique	Unobservable input	Input value
Summit earnout	6,036	Discounted cash flow	Discount rate	14.5%
NP Coil Dexter hold-back	977	Discounted cash flow	Discount rate	14.8%
Non-competition agreement obligation	458	Discounted cash flow	Discount rate	14.0%
G.W. Smith hold-back	1,000	Discounted cash flow	Discount rate	15.0%

The fair value of the Summit earnout is based on the weighted average probability of the outcome of different payout scenarios. As ofSeptember 30, 2012, the probabilities applied to the payout scenarios ranged from 15% to 50%, depending on the Company's estimate of the likelihood of each payout scenario.