Contingencies

3 Months Ended

Jun. 30, 2011

Contingencies [Abstract]

Contingencies

NOTE 13. Contingencies

Environmental Matters

The Company is involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination and other environmental matters at several of its former facilities that were never required for its current operations. These facilities were part of the business disposed of by TransTechnology Corporation, the former parent of the Company. Environmental cleanup activities usually span multiple years, which make estimating liabilities a matter of judgment because of such factors as changing remediation technologies, assessments of the extent of contamination, and continually evolving regulatory environmental standards. The Company considers these and other factors in estimates of the timing and amount of any future costs that may be required for remediation actions. The Company records a liability for the amount that it determines to be the best estimate of the cost of remediation. The Company does not discount the recorded liabilities, as the amount and timing of future cash payments are not fixed or cannot be reliably determined.

The Company retains the services of a nationally-recognized environmental consulting firm to help monitor its environmental liabilities. Based upon the information and the consultant’s analysis and recommendations, the Company determined that its best estimate of its future environmental liabilities is $14,135 before offsetting cost-sharing of approximately $1,556 that is classified mostly as a non-current asset.

At June 30, 2011 and March 31, 2011, the aggregate amount of liabilities recorded relative to environmental matters was $14,135 and $14,293, respectively. In the first three months of Fiscal 2012 and Fiscal 2011, the Company spent $263 and $58, respectively, on environmental costs and for the entire Fiscal 2011, the Company spent $638. In Fiscal 2012, the Company anticipates spending $1,899. The increased spending is primarily related to the Glen Head, New York property. These costs will be charged against the Company’s environmental liability reserve and will not impact income. The Company performs quarterly reviews of the status of its environmental sites and the related liabilities. There are a number of former operating facilities that the Company is monitoring or investigating for potential future remediation. In some cases, although a loss may be probable, it is not possible at this time to reasonably estimate the amount of any obligation for remediation activities because of uncertainties with respect to assessing the extent of the contamination or the applicable regulatory standard. The Company is also pursuing claims for contribution to site investigation and cleanup costs against other potentially responsible parties (PRPs), including the U.S. Government.

Although the Company takes great care in the development of these risk assessments and future cost estimates, the actual amount of the remediation costs may be different from those estimated as a result of a number of factors including: changes to federal and state environmental regulations or laws; changes in local construction costs and the availability of personnel and materials; unforeseen remediation requirements that are not apparent until the work actually commences; and actual remediation expenses that differ from those estimated. The Company does not include any unasserted claims that it might have against others in determining its potential liability for such costs, and, except as noted with regard to specific cost sharing arrangements, has no such arrangements, nor has the Company taken into consideration any future claims against insurance carriers that it may have in determining its environmental liabilities. In those situations where the Company is considered a de minimis participant in a remediation claim, the failure of the larger participants to meet their obligations could result in an increase in the liability with regard to such a site.

The Company continues to participate in environmental assessments and remediation work at eleven locations, including certain former facilities. Due to the nature of environmental remediation and monitoring work, such activities can extend for up to 30 years, depending upon the nature of the work, the substances involved, and the regulatory requirements associated with each site. The Company does not discount the recorded liabilities.

In the first quarter of Fiscal 2003, the Company entered into a consent order for a former facility in Glen Head, New York, which is currently subject to a contract for sale, pursuant to which the Company developed a remediation plan for review and approval by the New York Department of Environmental Conservation. The Company was advised during Fiscal 2010 that the Department of Environmental Conservation was requiring additional offsite groundwater delineation studies as part of its review. At the former facility in Glen Head, New York based upon the characterization work performed to date and this latest request, the Company has accrued estimated costs of approximately $3,959. The amounts and timing of payments are subject to the approved remediation plan and additional discussions with the Department on the scope of the additional delineation study.

The Company sold the business previously operated at the property it owns in Saltzburg, Pennsylvania (“Federal Labs”). The Company presented an environmental cleanup plan during the fourth quarter of Fiscal 2000 for a portion of Federal Labs site, which was approved during the third quarter of Fiscal 2004. This plan was submitted pursuant to the Consent Order and Agreement with the Pennsylvania Department of Environmental Protection (“PaDEP”) concluded in Fiscal 1999 (the “1999 Consent Order”). Pursuant to the Consent Order, the Company paid $0.2 million for past costs, future oversight expenses and in full settlement of claims made by PaDEP related to the environmental remediation of the site with an additional $0.2 million paid in Fiscal 2001. The Company concluded a second Consent Order with PaDEP in the third quarter of Fiscal 2001 for a second portion of the Federal Labs site (the “2001 Consent Order”), and a third Consent Order for the remainder of the Federal Labs site was concluded in the third quarter of Fiscal 2003 (the “2003 Consent Order”). The Company submitted an environmental cleanup plan for the portion of the Federal Labs site covered by the 2003 Consent Order during the second quarter of Fiscal 2004. The Company is also administering an agreed settlement with the Federal Government, concluded in the first quarter of Fiscal 2000, under which the Federal Government pays 50% of the direct and indirect environmental response costs associated with a portion of the Fed Labs site subject to the 1999 Consent Order. The Company also concluded an agreement in the first quarter of Fiscal 2006, under which the Federal Government paid an amount equal to 45% of the estimated environmental response costs associated with a second portion of the Federal Labs site subject to the 2001 Consent Order. No future payments are due under this second agreement. The Company is currently under a tolling agreement with the Federal Government with respect to the remainder of the Federal Labs site while we negotiate a cost sharing arrangement with respect to the final portion of this site subject to the 2003 Consent Order. However, there can be no assurance the Company will be successful in these negotiations or any litigation seeking to enforce our rights to contribution and or indemnification from the Federal Government with respect to this final portion of the Federal Labs site. The reserves are shown without giving effect to any cost sharing payments due from the Federal Government. These amounts are shown as other assets on our balance sheet.

At June 30, 2011, the reserve for environmental liabilities at Federal Labs was $5,857. The Company expects that remediation at this site, which is subject to the oversight of the Pennsylvania authorities, will not be completed for several years, and that monitoring costs, although expected to be incurred over twenty years, could extend for up to thirty years.

There are other properties that have a combined environmental liability of $4,319. In addition, the Company has been named as a potentially responsible party in four environmental proceedings pending in several states in which it is alleged that the Company was a generator of waste that was sent to landfills and other treatment facilities. Such properties generally relate to businesses which have been sold or discontinued. The Company estimates that expected future costs, and the estimated proportional share of remedial work to be performed associated with these proceedings, will not exceed $100 and has provided for these estimated costs in the Company’s accrual for environmental liabilities.

The Company has entered into a sales contract for the Glen Head, New York property for $4,000, and it is classified as held for sale in the amount of $3,800 after allowing for certain costs. The contract does not include a price adjustment clause and although there are conditions precedent to the buyer’s obligations to close, the contract does not allow for contract termination. Thus, the buyer cannot unilaterally terminate the contract without liability, a buy-out, or some other settlement that must be negotiated with the Company. However, there is no outside date for closing to occur and we must provide the buyer with a funded remediation plan and environmental insurance prior to the buyer being obligated to close. The buyer has indicated its intent to build residential housing on the property and has been engaged in the lengthy process of securing the municipal approvals necessary to redevelop this former industrial site for residential purposes. The property is the subject of a consent order with the State of New York in which the Company has developed a remediation plan for review and approval by the New York Department of Environmental Conservation. The Company received a request from the Department in Fiscal 2010 to provide delineation and testing with respect to offsite groundwater contamination. Neither the consent order nor the remediation plan affect the buyer’s obligation to close under the sales contract. At the time the sales contract was entered into in July 2001, the property had an appraised value of $3,300 without adjusting for the Company’s estimated cost of remediation, which is separately reserved. In 2005, the property had an appraised value of $4,200 without adjusting for the Company’s estimated cost of remediation. The property has not been appraised since 2005.

Litigation

The Company is also engaged in various other legal proceedings incidental to its business. It is the opinion of management that, after taking into consideration information furnished by its counsel, these matters will have no material effect on the Company’s consolidated financial position or the results of operations or cash flows in future periods.