Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

9.  Fair Value of Financial Instruments

ASC 820 Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The levels of the fair value hierarchy established by ASC 820 are:

Level 1:  inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2:  inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.  A Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3:  inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

The Company considers the recorded value of certain of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at December 31, 2012 and December 31, 2011 based upon the short-term nature of the assets and liabilities.

The Company had $16.4 million  and $8.2 million deposited in an unrestricted money market account with Susquehanna Bank on December 31, 2012 and December 31, 2011, respectively.

As of December 31, 2012, the Company was contingently liable for fourteen standby letters of credit and five surety bonds totaling $6.0 million which represent bid and performance bonds on fifteen contracts.  The Company has deposited the full value of six standby letters of credit, $1.8 million, into money market escrow accounts and certificates of deposit which have been restricted in that the Company does not have access to these funds until the related letters of credit have expired. The cash has been recorded on the Company’s balance sheet at December 31, 2012 as restricted cash and long-term restricted cash depending on the expiration date of the underlying letters of credit.  An additional seven letters of credit for $3.1 million have been collateralized using the Company’s line of credit at December 31, 2012.

The following table presents assets and liabilities measured at fair value at December 31, 2012:

	Quoted Prices		Significant
	in Active		Other			Significant
	Markets for		Observable			Unobservable
	Identical Assets		Inputs			Inputs
(in thousands)	(Level 1)		(Level 2)			(Level 3)		Total
Money market fund	$	18,082	$	-		$	-		18,082
Certificates of deposit		890		-			-		890
Foreign exchange contracts		-		316			-		316
Total assets	$	18,972	$	316		$	-	$	19,288
Foreign exchange contracts	$	-	$	(339	)	$	-	$	(339	)
Total liabilities	$	-	$	(339	)	$	-	$	(339	)

The following table presents assets and liabilities measured at fair value at December 31, 2011:

	Quoted Prices		Significant
	in Active		Other			Significant
	Markets for		Observable			Unobservable
	Identical Assets		Inputs			Inputs
(in thousands)	(Level 1)		(Level 2)			(Level 3)		Total
Money market fund	$	8,163	$	-		$	-		8,163
Certificates of deposit		5,976		-			-		5,976
Foreign exchange contracts		-		483			-		483
Total assets	$	14,139	$	483		$	-	$	14,622
Foreign exchange contracts	$	-	$	(314	)	$	-	$	(314	)
Total liabilities	$	-	$	(314	)	$	-	$	(314	)

For the years ended December 31, 2012 and 2011, the Company did not have any transfers between fair value Level 1 and Level 2.