Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 5.   Fair Value Measurements

The accounting standard for fair value measurements provides a framework for measuring fair value and expands disclosures about fair value measurements.  The framework requires the valuation of investments using a three-tiered approach.  The statement requires fair value measurement to be classified and disclosed in one of the following categories:

Level 1:  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets and liabilities;

Level 2:  Quoted prices in the markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3:  Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity).

As of December 31, 2011 and 2010, we did not have any financial instruments with significant Level 3 inputs and we did not have any financial instruments that are measured at fair value on a recurring basis.

On May 17, 2010, in accordance with the amended Wells Fargo Facility's (as defined in Note 7 – Current Liabilities and Debt Obligations) stated use of proceeds, $4.2 million was paid to the holders of the Company's senior subordinated notes (the “Subordinated Notes”) (see Note 7 – Current Liabilities and Debt Obligations).  Accordingly, as of December 31, 2011 and 2010, the carrying value of the Subordinated Notes was zero.

At December 31, 2011, as a result of the acquisition of IT Logistics, Inc. (“ITL”) (see Note 15 – Acquisition of IT Logistics, Inc.), there were two notes payable to the seller of ITL.  The $7 million note was recorded at a fair value of $6.9 million at the acquisition date.  The outstanding balance of the $7 million note was $3.5 million as of December 31, 2011.  Additionally, the $15 million subordinated promissory note was recorded at its fair value of $11.7 million and has been accreted to its current carrying value of $12.1 million as of December 31, 2011.  The $15 million subordinated promissory note will be accreted to its face value over 60 months.

On September 27, 2010, 4.9% of the senior redeemable preferred stock (the “Senior Redeemable Preferred Stock”) was redeemed for $430,000 and subsequently on April 8, 2011, 22.3% of the Senior Redeemable Preferred Stock was redeemed for $2.1 million (see Note 8 – Redeemable Preferred Stock). As of December 31, 2011 and 2010, the carrying value of the Senior Redeemable Preferred Stock was $8.2 million and $10.2 million, respectively.  Since there have been no material changes in the Company's financial condition and no material modifications to the financial instruments, other than the redemption of 22.3% of the Senior Redeemable Preferred Stock, the estimated fair value of the Senior Redeemable Preferred Stock remains consistent with those disclosed as of December 31, 2010, adjusted for the accrual of dividends and the redemption as mentioned above on the Senior Redeemable Preferred Stock.

As of December 31, 2011 and 2010, the carrying value of the Company's 12% Cumulative Exchangeable Redeemable Preferred Stock, par value $.01 per share (the “Public Preferred Stock”) was $108.6 million and $104.8 million, respectively, and the estimated fair market value was $65.3 million and $66.9 million, respectively, based on quoted market prices.