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Note 11 - Financial Instruments
9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

(11)             Financial Instruments


The FASB issued ASC Topic 815, Derivatives and Hedging, (“ASC 815”), which establishes accounting and reporting standards for derivative instruments. ASC 815 requires an entity to recognize all derivatives as either assets or liabilities and measure those instruments at fair value. Derivatives that do not qualify as a hedge must be adjusted to fair value in earnings. If the derivative does qualify as a hedge under ASC 815, changes in the fair value will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments or recognized in accumulated other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a hedge’s change in fair value will be immediately recognized in earnings.


In August 2008, in order to protect against interest rate exposure on its variable-rate debt, the Company entered into an interest rate swap to fix the interest rate applicable to certain of its variable-rate debt. The agreement swapped one-month LIBOR for a fixed interest rate of 4.36% with a notional amount of $4.8 million as of December 31, 2012. The interest rate swap agreement matured on July 15, 2013. The Company did not meet the criteria for hedge accounting under ASC 815, thus the difference between its amortized cost and its fair value resulted in an unrealized gain at September 30, 2012 and 2013 of $169,000 and $101,000 respectively, and such amount was reported in interest and other expenses, net on the accompanying Consolidated Statements of Comprehensive Income (Loss).


In September 2012, in order to protect against foreign currency exposure on its Australian operations, the Company borrowed in Australian dollars under the Senior Secured Revolving Credit Facility as a hedge of its net investment in Australia related to the MedHealth acquisition. The Company had outstanding debt of approximately AUD$50.0 million that was designated as a hedge of its net investment in Australia as of December 31, 2012. This non-derivative net investment hedge was classified as long-term debt in the Company’s Consolidated Balance Sheets. In accordance with ASC 815, the translation of this debt instrument designated as a net investment hedge is recorded in accumulated other comprehensive loss, offsetting the currency translation adjustment of the related net investment that is also recorded in accumulated other comprehensive loss. The AUD$ denominated debt was paid off in full in the second quarter of 2013 and as of September 30, 2013, all outstanding debt under the Senior Secured Revolving Credit Facility is denominated in U.S. dollars.


Beginning in the second quarter of 2013, in order to protect against foreign currency exposure in its Australian operations, the Company entered into forward foreign currency contracts as a hedge of AUD $60.0 million of its net investment in Australia. Beginning in the third quarter of 2013, the Company also entered into forward foreign currency contracts as a hedge of £40.0 million of its net investment in the U.K. The Company settled certain of its hedge positions in the second and third quarters of 2013 and received $500,000 in net proceeds. This amount was classified in other comprehensive income in the Company’s Consolidated Balance Sheet, offsetting the currency translation adjustment of the related net investment that is also recorded in accumulated other comprehensive loss, and is reported net of the effect of income taxes. As of September 30, 2013, the Company had a net liability of $272,000 recorded in other current liabilities with the offsetting unrealized loss being recorded in accumulated other comprehensive loss in its Consolidated Balance Sheets associated with open forward foreign currency contracts which matured on October 30, 2013.


The Company does not enter into derivative transactions for speculative purposes.