Note 8 - Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value Disclosures [Text Block]

8. Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, outstanding borrowings under the lines of credit, current portion of long-term debt, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities.  In addition, the Company has long-term debt with financial institutions.  The fair value of long-term debt is measured by obtaining the current interest rate from the financial institutions and then comparing that to the actual interest rate owed on the debt.  At June 30, 2011, the fair value of the long-term debt is estimated at $172,000.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis at June 30, 2011 (in thousands):

			Fair Value Measurements Using
	Total Carrying Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Restricted investments available for sale	$	15,324	$	10,063	$	5,261	$	0
Investments available for sale		17,730		5,025		12,705		0
Forward exchange contracts – assets		253		0		253		0
Forward exchange contracts – liabilities		640		0		640		0
Contingent purchase price – Palladium (1)		4,148		0		0		4,148

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(1) See Note 12 for further discussion of valuation.

The Company purchases its investments available for sale and restricted investments available for sale through several major financial institutions.  These financial institutions have hired third parties to measure the fair value of these investments.

U.S. Treasury Notes are measured at fair value by obtaining information from a number of live data sources including active market makers and inter-dealer brokers.  These data sources are reviewed based on their historical accuracy for individual issues and maturity ranges.

U.S. Government Corporations and Agency securities and Corporate Notes and Bonds are measured at fair value by obtaining (a) a bullet (non-call) spread scale that is created for each issuer going out to forty years (these spreads represent credit risk and are obtained from the new issue market, secondary trading and dealer quotes), (b) an option adjusted spread model which is incorporated to adjust spreads of issues that have early redemption features and (c) final spreads are added to the U.S. Treasury curve and a special cash discounting yield/price routine calculates prices from final yields to accommodate odd coupon payment dates.  Evaluators maintain quality by surveying the dealer community, obtaining benchmark quotes, incorporating relevant trade data and updating spreads daily.

The Company’s counterparty (“Counterparty”) to a majority of its forward exchange contracts is a major financial institution.  These forward exchange contracts are measured at fair value by the Counterparty based on a variety of pricing factors, which include the market price of the derivative instrument available in the dealer-market.

During the six and three months ended June 30, 2011, there were no transfers between Level 1, Level 2 and Level 3 measurements.  In addition, there were no changes in the valuation technique of assets and liabilities measured on a recurring basis during the six and three months ended June 30, 2011.

The following table provides Form Athletics goodwill, intangible assets and contingent purchase price carried at fair value measured on a non-recurring basis (in thousands):

	June 30, 2011
			Fair Value Measurements Using						Six and
			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobser- vable Inputs (Level 3)		Three
									Months
	Total Carrying Value								Ended June 30, 2011
									Total Gains/ (Losses)
Form Athletics Goodwill (1)	$	0	$	0	$	0	$	0	$	(539	)
Form Athletics Trademarks (1)		0		0		0		0		(3,150	)
Form Contingent Purchase Price (2)		0		0		0		0		2,110

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(1) See Note 5 for further discussion of valuation.

(2) See Note 13 for further discussion of valuation.