v2.4.0.6
Fair Value Measurements (Notes)
 3 Months Ended
Sep. 30, 2012
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:
 
September 30, 2012
 
Total
 
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
59,319

 
$
59,319

 
$
—

 
$
—

Total assets recorded at fair value
$
59,319

 
$
59,319

 
$
—

 
$
—

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Albumprinter contingent earn-out
$
291

 
$
—

 
$
—

 
$
291

Interest rate swap contracts
288

 
—

 
288

 
—

Total liabilities recorded at fair value
$
579

 
$
—

 
$
288

 
$
291

 
June 30, 2012
 
Total
 
Quoted Prices in
Active
Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Cash and cash equivalents
$
62,203

 
$
62,203

 
$
—

 
$
—

Total assets recorded at fair value
$
62,203

 
$
62,203

 
$
—

 
$
—

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Albumprinter contingent earn-out
$
570

 
$
—

 
$
—

 
$
570

Total liabilities recorded at fair value
$
570

 
$
—

 
$
—

 
$
570


During the three months ended September 30, 2012 and September 30, 2011 there have been no significant transfers in and out of Level 1, Level 2 and Level 3.
The following table represents the changes in fair value of Level 3 contingent consideration:
 
Albumprinter contingent earn-out
Balance at June 30, 2012
$
570

Fair value adjustment
(289
)
Effect of currency translation adjustments
10

Balance at September 30, 2012
$
291



The valuations of the derivatives intended to mitigate our interest rate risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves and interest rate volatility, and reflects the contractual terms of these instruments, including the period to maturity. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements.
    
Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to appropriately reflect both our own nonperformance risk and the respective counterparties' nonperformance risk in the fair value measurement. However, as of September 30, 2012, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined that the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are classified in Level 2 in the fair value hierarchy.

The share purchase agreement for our acquisition of Albumprinter Holding B.V. provides for an earn-out payment that is payable based on achieving certain operational results for calendar year 2012. This earn-out is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions and estimates to forecast a range of outcomes and probabilities for the contingent consideration. We assess these assumptions and estimates on a quarterly basis as additional data impacting the assumptions is obtained. Any changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within the consolidated statements of operations during the period in which the change occurs. During the three months ended September 30, 2012, the fair value of the liability was adjusted as a result of updated information decreasing our estimate of the probability of incurring the liability.
As of September 30, 2012 and June 30, 2012, the carrying amounts of cash and cash equivalents, receivables, accounts payable, and other current liabilities approximated their estimated fair values. We performed an evaluation of the estimated fair value of our long-term debt and as of September 30, 2012 the fair value approximates the carrying value of the liability. The estimated fair value of our long-term debt was determined using market sources that were derived from available market information and may not be representative of actual values that could have been or will be realized in the future.