Fair Value Measurement

9 Months Ended

May 31, 2012

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

FAIR VALUE MEASUREMENT

For a discussion of the Company’s fair value measurement policies under the fair value hierarchy, refer to Note 6 in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2011. The Company has not changed its valuation techniques for measuring the fair value of any financial assets or liabilities during fiscal 2012, and transfers between levels within the fair value hierarchy, if any, are recognized at the end of each quarter.

The following table presents information about the Company’s assets and liabilities measured at fair value as of May 31, 2012 and August 31, 2011:

	May 31, 2012								August 31, 2011
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(In thousands)
Assets recorded at fair value:
Foreign exchange forward contracts	$	209	$	—	$	209	$	—	$	82	$	—	$	82	$	—
Liabilities recorded at fair value:
Foreign exchange forward contracts	$	93	$	—	$	93	$	—	$	50	$	—	$	50	$	—
Liabilities not recorded at fair value:
Long-term debt	$	63,468	$	—	$	63,468	$	—	$	76,093	$	—	$	76,093	$	—

Cash and cash equivalents are recorded at cost, which approximates fair value. Additionally, the carrying value of the Company's variable-rate debt approximates fair value.

Long-term fixed-rate debt issued in Euros is not recorded at fair value on a recurring basis; however, is presented at fair value for disclosure purposes as shown in the table above. The fair value of the Company's long-term fixed-rate debt was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities. As of May 31, 2012 and August 31, 2011, the carrying value of the Company's long-term fixed-rate debt recorded on the consolidated balance sheets was approximately $62.4 million and $72.7 million, respectively.

The total contract value of foreign exchange forward contracts outstanding was approximately $16.1 million and $18.4 million as of May 31, 2012 and August 31, 2011, respectively. The amount of foreign exchange forward contracts outstanding as of the end of the period is indicative of the level of the activity during the period. Any gains or losses associated with these contracts as well as the offsetting gains or losses from the underlying assets or liabilities are included in the foreign currency transaction (gains) losses line in the Company’s consolidated statements of operations. The fair value of the Company’s foreign exchange forward contracts is recognized in other current assets or other accrued liabilities in the consolidated balance sheets based on the net settlement value. The foreign exchange forward contracts are entered into with creditworthy multinational banks, generally have a term of three months or less, and the Company does not hold or issue foreign exchange forward contracts for trading purposes. There were no foreign exchange forward contracts designated as hedging instruments as of May 31, 2012 and August 31, 2011.

As a result of the Italy restructuring initiative, further discussed in Note 12, the Company remeasured the carrying value of its facility in Verolanuova, Italy during the third quarter of fiscal 2012 at fair value of approximately $2.9 million using comparable prices for similar assets. As a result, the Company recorded a pre-tax impairment charge of approximately $2.4 million. There were no additional significant assets or liabilities that were remeasured at fair value on a non-recurring basis during the periods presented.