Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

11. Fair Value Measurements

Recurring

     The following table presents the Company's assets and liabilities that were measured at fair value on a recurring basis at (in thousands):

	March 31, 2013								December 31, 2012
	Total		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3
Assets
Deferred compensation	$	5,241	$	5,241	$	-	$	-	$	4,540	$	4,540	$	-	$	-
Derivative instruments		-		-		-		-		223		-		223		-
Total assets	$	5,241	$	5,241	$	-	$	-	$	4,763	$	4,540	$	223	$	-
Liabilities
Contingent consideration	$	10,888	$	-	$	-	$	10,888	$	11,519	$	- $		-	$	11,519
Deferred compensation		8,139		8,139		-		-		7,015		7,015		-		-
Derivative instruments		123		-		123		-		-		-		-		-
Total liabilities	$	19,150	$	8,139	$	123	$	10,888	$	18,534	$	7,015	$	-	$	11,519

Deferred Compensation

     The Company has an Executive Non-Qualified Deferred Compensation Plan (the "Plan"). The amounts deferred under this Plan are credited with earnings or losses based upon changes in values of the notional investments elected by the Plan participants. The Company invests 65 percent of the amounts deferred by the Plan participants in life insurance contracts, matching the investments elected by the Plan participants. Deferred compensation assets and liabilities were valued using a market approach based on the quoted market prices of identical instruments.

Contingent Consideration Related to Acquisitions

     Liabilities for contingent consideration related to acquisitions were valued using management's projections for long-term sales forecasts, including assumptions regarding market share gains and future industry-specific economic and market conditions, and a market participant's weighted average cost of capital. Over the next four years, the Company's long-term sales growth forecasts for these products average approximately 25 percent per year. For further information on the inputs used in determining the fair value, and a roll-forward of the contingent consideration liability, see Note 9 of the Notes to Condensed Consolidated Financial Statements.

     Changes in either of the inputs in isolation would result in a change in the fair value measurement. A change in the assumptions used for sales forecasts would result in a directionally similar change in the fair value liability, while a change in the weighted average cost of capital would result in a directionally opposite change in the fair value liability. If there is an increase in the fair value liability, the Company would record a charge to selling, general and administrative expenses, and if there is a decrease in the fair value liability, the Company would record a benefit in selling, general and administrative expenses.

Derivative Instruments

     At March 31, 2013, the Company had derivative instruments for 3.1 million pounds of aluminum, approximately 10 percent of the Company's anticipated annual aluminum purchases, in order to manage a portion of the exposure to movements associated with aluminum costs. These derivative instruments expire through September 2013, at an average mid-west aluminum price of $1.02 per pound. While these derivative instruments are considered to be economic hedges of the underlying movement in the price of aluminum, they are not designated or accounted for as a hedge. These derivative instruments were valued at fair value using a market approach based on the quoted market prices of similar instruments at the end of each reporting period, and the resulting net gain or loss was recorded in cost of sales in the Condensed Consolidated Statements of Income. At March 31, 2013, the $0.1 million corresponding liability was recorded in accrued expenses and other current liabilities, and at December 31, 2012, the $0.2 million corresponding asset was recorded in prepaid expenses and other current assets, both as reflected in the Condensed Consolidated Balance Sheets. During the first quarter of 2013, derivative instruments for 1.7 million pounds were settled at a loss of less than $0.1 million which was recorded in cost of sales in the Condensed Consolidated Statements of Income.

Non-recurring

     The following table presents the carrying value on the measurement date of any assets and liabilities which were measured at fair value and recorded at the lower of cost or fair value, on a non-recurring basis, using significant unobservable inputs (Level 3), and the corresponding non-recurring losses or (gains) recognized during the three months ended March 31, (in thousands):

	2013				2012
		Carrying		Non-Recurring		Carrying		Non-Recurring
		Value		Losses/(Gains)		Value		Losses/(Gains)
Assets
Vacant owned facilities	$	5,225	$	-	$	10,324	$	265
Other intangible assets		-		-		642		600
Net assets of acquired
businesses		-		-		1,095		-
Total assets	$	5,225	$	-	$	12,061	$	865
Liabilities
Vacant leased facilities	$	-	$	-	$	32	$	(156	)
Total liabilities	$	-	$	-	$	32	$	(156	)

Vacant Owned Facilities

     During the first quarter of 2013, the Company reviewed the recoverability of the carrying value of four vacant owned facilities with a combined carrying value of $5.2 million, classified in fixed assets in the Condensed Consolidated Balance Sheets. The determination of fair value was based on the best information available, including internal cash flow estimates, market prices for similar assets, broker quotes and independent appraisals, as appropriate. The fair value of these vacant owned facilities exceeded their carrying value, therefore no impairment charges were recorded.

     During the first quarter of 2012, the Company reviewed the recoverability of the carrying value of seven vacant owned facilities with a combined carrying value of $10.3 million. Six of these facilities were classified in fixed assets in the Condensed Consolidated Balance Sheets and the other facility, which was sold on April 4, 2012 for $2.0 million, was classified in other assets. The fair value of two of these vacant owned facilities did not exceed their carrying value, therefore impairment charges of $0.3 million were recorded in selling, general, and administrative expenses in the Condensed Consolidated Statements of Income.

Other Intangible Assets

     During the first quarter of 2012, the Company reviewed the recoverability of amortizable intangible assets associated with an acquired patent. Based on the analyses, the carrying value of these intangible assets exceeded the undiscounted cash flows expected to be generated. As a result, the Company was required to determine the fair value of these intangible assets. Fair value was determined based on the present value of internal cash flow estimates. The resulting fair value of these intangible assets was $0.6 million below the carrying value at March 31, 2012, therefore the Company recorded a non-cash impairment charge of $0.6 million in the first quarter of 2012, of which $0.5 million was recorded in cost of sales in the Condensed Consolidated Statements of Income.

Net Assets of Acquired Businesses

     The Company valued the assets and liabilities associated with the acquisitions of businesses on the respective acquisition dates. Depending upon the type of asset or liability acquired, the Company used different valuation techniques in determining the fair value. Those techniques included comparable market prices, long-term sales, profitability and cash flow forecasts, assumptions regarding future industry-specific economic and market conditions, a market participant's weighted average cost of capital, as well as other techniques as circumstances required. For further information on acquired assets and liabilities, see Note 3 of the Notes to Condensed Consolidated Financial Statements.

Vacant Leased Facilities

The Company recorded a gain of $0.2 million in selling, general and administrative expenses in the

Condensed Consolidated Statements of Income in the first quarter of 2012 due to the early termination of leases of vacant facilities by the lessor.