Commitments And Contingencies

9 Months Ended

Sep. 30, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

10.        Commitments and Contingencies

Litigation

See Item 3. "Legal Proceedings" in the Annual Report on Form 10-K for the year ended December 31, 2010. There were no material developments during the first nine months of 2011 in connection with the identified legal proceeding pending at December 31, 2010, except that in May 2011, plaintiffs filed an appeal brief with the Ninth Circuit Court of Appeals and defendant Kinro filed an answering brief. A decision is pending.

In addition, in the normal course of business, the Company is subject to proceedings, lawsuits and other claims. All such matters are subject to uncertainties and outcomes that are not predictable with assurance. While these matters could materially affect operating results when resolved in future periods, it is management's opinion that after final disposition, including anticipated insurance recoveries in certain cases, any monetary liability or financial impact to the Company beyond that provided in the Condensed Consolidated Balance Sheet as of September 30, 2011, would not be material to the Company's financial position or annual results of operations.

Contingent Consideration

            In connection with several acquisitions since 2009, if certain sales targets for the acquired products are achieved, the Company would pay additional cash consideration. The Company has recorded a liability for the fair value of these expected earn-out payments at September 30, 2011, based on the present value of the expected future cash flows using a market participant's weighted average cost of capital of 15.5 percent.

            The following table summarizes the expected earn-outs as of September 30, 2011 (in thousands):

			Fair Value
	Estimated		of Estimated
Acquisition	Payments		Payments
Schwintek products	$	14,728(a)	$	11,124
Level-UpTM six-point leveling system		2,209(b)		1,480
Other acquired products		1,700(c)		869
Total	$	18,637	$	13,473

(a)  

Earn-out payments for three of the four products expire in March 2014. Earn-out payments for the remaining product will cease five years after the product is first sold to customers. Two of the four products acquired have a combined remaining maximum earn-out payment of $12.7 million, of which the Company estimates $12.2 million will be paid. Other than expiration of the earn-out period, the remaining products have no maximum on earn-out payments.

(b)   Other than expiration of the earn-out period in February 2016, these products have no maximum on earn-out payments.

(c)    Earn-out payments expire at various dates through October 2025. One of these products has a maximum of $2.5 million, while the remaining products have no maximum on earn-out payments.           

            As required, the liability for these estimated earn-out payments is re-evaluated quarterly, considering actual sales of the acquired products, updated sales projections, and the updated market participant weighted average cost of capital. Depending upon the weighted average cost of capital and future sales of the products which are subject to earn-outs, the Company could record adjustments in future periods.

            In the first nine months of 2011, the net impact of the quarterly re-evaluation and accretion of the liability was an expense recorded in selling, general, and administrative expenses of $1.0 million, while a gain of $0.1 million was recorded in selling, general, and administrative expenses in the first nine months of 2010.

            The following table provides a reconciliation of the Company's contingent consideration liability, for the nine months ended September 30, 2011 (in thousands):

Balance at December 31, 2010	$	12,104
Acquisitions		640
Payments		(226)
Accretion		1,391
Fair value adjustments		(436)
Balance at September 30, 2011		13,473
Less current portion in accrued expenses and other current liabilities		3,188
Total long-term portion in other long-term liabilities	$	10,285

Environmental Liabilities

Accruals for environmental matters are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based upon current law and existing technologies. These amounts, which are not discounted and are exclusive of claims against potentially responsible third parties, are adjusted periodically as assessment and remediation efforts progress or additional technical or legal information becomes available. Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies and remedial activities, advances in technology, changes in environmental laws and regulations and their application, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible parties and the Company's ability to obtain contributions from other parties, and the lengthy time periods over which site remediation occurs. It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably against the Company.

Use of Estimates

            The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to product returns, accounts receivable, inventories, notes receivable, goodwill and other intangible assets, income taxes, warranty obligations, self-insurance obligations, lease terminations, asset retirement obligations, long-lived assets, post-retirement benefits, stock-based compensation, segment allocations, earn-out payments, environmental liabilities, contingencies and litigation. The Company bases its estimates on historical experience, other available information and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other resources. Actual results and events could differ significantly from management estimates.