Fair Value Measurement

9 Months Ended

Sep. 25, 2011

Fair Value Measurement [Abstract]

Fair Value Measurement

Note 9 — Fair value measurement

For a description of the fair value hierarchy, see Note 10 to the Company's 2010 consolidated financial statements included in its current report on Form 8-K for the year ended December 31, 2010.

The following tables provide information regarding the financial assets and liabilities carried at fair value measured on a recurring basis as of September 25, 2011 and December 31, 2010:

	Total carrying value at September 25, 2011		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Dollars in thousands)
Cash and cash equivalents	$	45,004	$	45,004	$	—	$	—
Investments in marketable securities		3,762		3,762		—		—
Bonds – foreign government		4,976		—		4,976		—
Derivative assets		66		—		66		—
Derivative liabilities		15,566		—		15,566		—
Contingent consideration liabilities		9,566		—		—		9,566
	Total carrying value at December 31, 2010		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Dollars in thousands)
Investments in marketable securities	$	4,108	$	4,108	$	—	$	—
Derivative assets		880		—		880		—
Derivative liabilities		25,200		—		25,200		—

Due to the continued volatility associated with market conditions in Greece and reduced trading activity in its sovereign debt, the Company classified its $5.0 million of Greek bonds as Level 2 in the third quarter.

The following table provides a reconciliation of changes in Level 3 financial liabilities measured at fair value on a recurring basis for the nine month period ending September 25, 2011:

	Contingent consideration
	(Dollars in thousands)
Balance at beginning of year	$	—
Initial estimate of contingent consideration		15,400
Payment		(6,000	)
Revaluations		166
Balance at end of period	$	9,566

See Note 7, "Borrowings," for a discussion of the fair value of the Company's long-term debt.

Valuation Techniques Used to Determine Fair Value

The Company's cash and cash equivalents valued based upon Level 1 inputs are comprised of overnight investments in money market funds. The funds invest in obligations of the U.S. Treasury, including Treasury bills, bonds and notes. The funds seek to maintain a net asset value of $1.00 per share.

The Company's financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to pay benefits under certain deferred compensation plans and other compensatory arrangements. The investment assets of the trust are valued using quoted market prices.

The Company's financial assets valued based upon Level 2 inputs are comprised of two groups, zero coupon Greece government bonds and foreign exchange contracts. The Company's financial liabilities valued based upon Level 2 inputs are comprised of an interest rate swap contract and foreign exchange contracts. The Greece government bonds were received in settlement of amounts due to the Company from sales to the public hospital system in Greece for 2007, 2008 and 2009. The bonds mature over three years. The fair value of the bonds is determined based on quoted prices for identical assets. The Company uses foreign exchange contracts to manage foreign currency transaction exposure and the interest rate swap is used to reduce exposure to interest rate changes. The fair value of the foreign exchange contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. The fair value of the interest rate swap contract is developed from market-based inputs under the income approach using cash flows discounted at relevant market interest rates. The Company has taken into account the creditworthiness of the counterparties in measuring fair value. See Note 8, "Financial instruments" for additional information.

The Company's financial liabilities valued based upon Level 3 inputs are comprised of contingent consideration pertaining to the VasoNova acquisition. The fair value of the contingent consideration is determined using a weighted probability of potential payment scenarios discounted at rates reflective of the Company's credit rating and expected return on the VasoNova business. The assumptions used to develop the estimated amount recognized for the contingent consideration arrangement are updated each reporting period. As of September 25, 2011, the Company has recorded approximately $4.0 million of contingent consideration in other current liabilities and the remaining $5.6 million in other liabilities.