Commitments and Contingent Liabilities

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Commitments and Contingent Liabilities

As of March 31, 2013, the Company had $6,794 of irrevocable letters of credit outstanding which primarily consisted of $4,000 for collateral associated with commodity hedges and $1,994 for compliance with the insurance reserve requirements of its workers’ compensation insurance carriers.

The Company is party to a variety of legal proceedings arising from the operation of its business. These proceedings are incidental and occur in the normal course of the Company’s business affairs. It is the opinion of management, based upon the information available at this time, that the currently expected outcome of these proceedings will not have a material effect on the consolidated results of operations, financial condition or cash flows of the Company.

During the quarter ended March 31, 2013, the Company received warranty and other claims from certain customers regarding alleged quality defects with certain alloy round bar products sold by the Company in 2012 and 2013.   The Company has evaluated the information provided by the customers and issued a notice of potential defect to other affected customers.  The Company continues to investigate the alleged quality defects.  Based on the limited information available at this time, as of March 31, 2013, the Company preliminarily estimates that it may incur costs associated with these claims ranging from $325 to $1,250.  At the present time, the Company cannot conclude that any amount within the range is a better estimate than any other.  The Company believes amounts paid to customers, if any, will be recoverable from the original supplier of the products.  There can be no assurance that the Company's losses related to these claims will not exceed the Company's estimated range of loss, or that the Company will be able to recover any amounts from the original supplier of the products.

In 2011, the Company determined that it inadvertently exported certain aluminum alloy bar that are listed on the U.S. Bureau of Industry and Security’s (BIS) Commerce Control List to countries where there is an export license requirement if an exception is not otherwise available. The exports, which occurred in 2011, had a total transaction value of approximately $13 and were made without export licenses. The exports involved five shipments to the Company’s wholly-owned subsidiary in China and to a customer in the Philippines. In response thereto, the Company submitted a voluntary self-disclosure describing the nature of these shipments to the Office of Export Enforcement of the Department of Commerce (OEE) in accordance with applicable Export Administration Regulations. In March 2013, the OEE notified the Company it had completed its review of this matter and decided not to refer the matter for criminal or administrative prosecution and closed the matter by issuing a warning letter to the Company. No monetary penalties were assessed against the Company by OEE.