Financial Instruments and Concentrations of Credit Risk

12 Months Ended

Dec. 31, 2011

Financial Instruments and Concentrations of Credit Risk [Abstract]

Financial Instruments and Concentrations of Credit Risk

Note 14.  Financial Instruments and Concentrations of Credit Risk

     The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

     Cash and cash equivalents, short-term investments, accounts receivable and payable: The carrying amounts approximate fair value because of the short maturities of these instruments.

     Short-term debt and other liabilities: The carrying amounts of short-term debt and other liabilities approximate fair value because of the short maturities of these instruments.

     Long-term debt: The fair value of the long-term debt of the Company is estimated based on the quoted market prices for that debt or similar debt and approximates the carrying amount.

     Forward exchange contracts: The fair value of forward exchange contracts (used for hedging purposes) is based on information derived from active markets. If appropriate, the Company would enter into forward exchange contracts to mitigate the impact of foreign exchange rate movements on the Company's operating results. It does not engage in speculation. Such foreign exchange contracts would offset losses and gains on the assets, liabilities and transactions being hedged. At December 31, 2011, the Company had an open foreign exchange contract with a financial institution to purchase approximately $0.2 million of foreign currencies. This contract matured in January 2012. The fair value of this instrument was a liability of less than $0.1 million at December 31,2011.  The fair value of open foreign exchange contracts at December 31,2010 was a liability of $0.2 million.

     Additionally, the Company has entered into forward contracts to sell 30 million Euros as a hedge of its net investment in Europe.  These contracts mature in October 2013.  The fair value of these instruments at December 31, 2011 and December 31, 2010 was an asset of $3.5 million and $2.7 million, respectively.

     Credit risk: Substantially all of the Company's accounts receivables are due from companies in the paper, construction and steel industries. Credit risk results from the possibility that a loss may occur from the failure of another party to perform according to the terms of the contracts. The Company regularly monitors its credit risk exposures and takes steps to mitigate the likelihood of these exposures resulting in actual loss. The Company's extension of credit is based on an evaluation of the customer's financial condition and collateral is generally not required.

     The Company's bad debt expense for the years ended December 31, 2011, 2010 and 2009 was $0.9 million, $0.1 million and $1.3 million, respectively.