Note 6 - Fair Value Measurements

12 Months Ended

Sep. 29, 2012

Fair Value Disclosures [Text Block]

(6) Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-level fair value hierarchy that encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of September 29, 2012 and October 1, 2011, the Company held financial assets that are required to be measured at fair value on a recurring basis. The financial assets held by the Company and the fair value hierarchy used to determine their fair values are as follows:

(In thousands)	Total at September 29, 2012		Quoted Prices  in Active Markets (Level 1)		Observable  Inputs (Level 2)
Other assets:
Cash surrender value of life insurance policies	$	5,146	$	-	$	5,146
Total	$	5,146	$	-	$	5,146

(In thousands)	Total at  October 1, 2011		Quoted Prices in Active  Markets  (Level 1)		Observable Inputs  (Level 2)
Other assets:
Cash surrender value of life insurance policies	$	4,006	$	-	$	4,006
Total	$	4,006	$	-	$	4,006

Cash surrender value of life insurance policies are classified as Level 2. The fair value of the life insurance policies was determined by the underwriting insurance company’s valuation models and represents the guaranteed value the Company would receive upon surrender of these policies as of the reporting date.

As of September 29, 2012 and October 1, 2011, the Company had no nonfinancial assets that are required to be measured at fair value on a nonrecurring basis other than the assets and liabilities acquired from Ivy (see Note 4 to the consolidated financial statements) that were acquired at fair value in the prior year. The carrying amounts of accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term maturities of these financial instruments. As of September 29, 2012, the carrying amount of long-term debt outstanding under the Company’s revolving credit facility approximates its estimated fair value. The estimated fair value of long-term debt is primarily based upon quoted market prices as well as borrowing rates currently available to the Company for bank loans with similar terms and maturities. As of October 1, 2011, the carrying amount of the $13.5 million secured subordinated promissory note payable to Ivy approximated fair value based on comparable debt with similar terms, conditions and proximity to the issuance date, which would be considered a level 2 input.