Fair Value Measurements

3 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

8. Fair Value Measurements

     The Company has categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy. The levels of fair value hierarchy are as follows:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related asset or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets or liabilities.

     ASC 820 — Fair Value Measurements and Disclosures requires the use of observable market inputs (quoted market prices) when measuring fair value and requires Level 1 quoted price to be used to measure fair value whenever possible.

     Foreign currency forward exchange contracts are classified within Level 2, as the valuation inputs are based on quoted prices and market observable data of similar instruments.

     There were no transfers in or out of the Level 1 and 2 in the three months ended September 30, 2011.

     The fair value of indefinite-lived assets, which consists of goodwill, is measured on a non-recurring basis in connection with the Company’s annual goodwill impairment test. The fair value of the reporting unit to which goodwill has been assigned is determined using a projected discounted cash flow analysis based on unobservable inputs including gross profit, discount rate, working capital requirements, capital expenditures, depreciation and terminal value assumptions and are classified within Level 3 of the valuation hierarchy.

     The book value of the Company’s debt of $25,250,000 approximates fair value based upon its variable interest rate.

     The following table sets forth the changes in fair value measurements attributable to the earn-out accruals classified as Level 3 liabilities during the three months ended September 30, 2011 (in thousands):

Balance at June 30, 2011	$	16,574
Fair value adjustments		(6,474	)
Balance at September 30, 2011		10,100