Note 6 - Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

6. Fair Value of Financial Instruments :

During the

three

months ended

March

31,

2017,

there were no transfers of financial assets between Levels

1,

2

or

3

fair value measurements. There have been no changes in the methodologies used at

March

31,

2017

since

December

 

31,

2016.

Following is a description of the valuation methodologies used for assets and liabilities measured at fair value as of

March

31,

2017

and

December

 

31,

2016:

Metals swaps and embedded customer derivatives

– Determined by using Level

2

inputs that include the price of nickel indexed to the LME. The fair value is determined based on quoted market prices and reflects the estimated amounts the Company would pay or receive to terminate the nickel swaps.

Interest rate swaps

– Based on the present value of the expected future cash flows, considering the risks involved, and using discount rates appropriate for the maturity date. Market observable Level

2

inputs are used to determine the present value of future cash flows.

The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company:

	Value of Items Recorded at Fair Value
	As of March 31, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Embedded customer derivative	$	-	$	46	$	-	$	46
Total assets at fair value	$	-	$	46	$	-	$	46
Liabilities:
Metals swaps	$	-	$	46	$	-	$	46
Interest rate swap (CTI)		-		23		-		23
Total liabilities recorded at fair value	$	-	$	69	$	-	$	69

	Value of Items Not Recorded at Fair Value
	As of March 31, 2017
(in thousands)	Level 1		Level 2		Level 3		Total
Liabilities:
IRB	$	1,825	$	-	$	-	$	1,825
Revolver		-		192,971		-		192,971
Total liabilities not recorded at fair value	$	1,825	$	192,971	$	-	$	194,796

The value of the items not recorded at fair value represent the carrying value of the liabilities.

	Value of Items Recorded at Fair Value
	As of December 31, 2016
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Embedded customer derivative	$	-	$	113	$	-	$	113
Total assets at fair value	$	-	$	113	$	-	$	113
Liabilities:
Metals swaps	$	-	$	113	$	-	$	113
Interest rate swap (CTI)		-		36		-		36
Total liabilities recorded at fair value	$	-	$	149	$	-	$	149

	Value of Items Not Recorded at Fair Value
	As of December 31, 2016
(in thousands)	Level 1		Level 2		Level 3		Total
Liabilities:
IRB	$	1,825	$	-	$	-	$	1,825
Revolver		-		164,599		-		164,599
Total liabilities not recorded at fair value	$	1,825	$	164,599	$	-	$	166,424

The value of the items not recorded at fair value represent the carrying value of the liabilities.

The fair value of the IRB is determined using Level

1

inputs. The carrying value and the fair value of the IRB that qualify as financial instruments were

$

1.8

million at both

March

31,

2017

and

December

31,

2016.

The fair value of the revolver is determined using Level

2

inputs. The Level

2

fair value of the Company's long-term debt was estimated using prevailing market interest rates on debt with similar credit worthiness, terms and maturities.