Note L - Fair Value Measurement

12 Months Ended

Dec. 31, 2013

Disclosure Text Block [Abstract]

Fair Value, Measurement Inputs, Disclosure [Text Block]

NOTE L—FAIR VALUE MEASUREMENT

We perform fair value measurements in accordance with the guidance provided by ASC 820. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value into three levels as follows:

• Level 1 – Quoted prices for identical instruments in active markets

• Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

• Level 3 – Instruments whose significant value drivers are unobservable

The fair value standards require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. When a valuation includes inputs from multiple sources at various levels in the fair value hierarchy, the assets or liabilities are classified at the lowest level for which the input has a significant effect on the overall valuation.

Assets and liabilities measured at fair value on a recurring basis on the Company’s consolidated balance sheets at December 31, 2013 consisted primarily of contingent consideration in connection with business combinations.

Contingent consideration at December 31, 2013 related to the Company’s acquisition of ECA in July 2013 as discussed in “Note F —Business Combinations.” In accordance with the purchase agreement for ECA, the Company is required to pay consideration in the event that ECA achieves certain specified earnings results during the three-year period subsequent to acquisition. The Company determines the fair value of contingent consideration using a discounted cash flow model which includes a probability assessment of expected future cash flows related to ECA. The fair value measurement uses significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement. At December 31, 2013, the fair value of contingent consideration was $2.8 million. There were no amounts recorded for contingent consideration at December 31, 2012.

In addition, the Company accounts for forward contract agreements in the consolidated balance sheets as either an asset or liability measured at fair value. The fair value of the hedges at December 31, 2013 and 2012 and the changes in fair value for the years ended December 31, 2013, 2012, and 2011 were immaterial.