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Fair Value of Financial Assets and Liabilities
 3 Months Ended
Mar. 31, 2013
Fair Value of Financial Assets and Liabilities [Abstract]  
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

NOTE H – FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

The carrying value of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, notes payable, and short-term debt, approximates its fair value because of the short-term maturity of these instruments. At March 31, 2013, the fair value of the Company’s long-term debt was estimated using discounted cash flows analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements which are considered to be level two inputs. There have been no transfers in or out of level two for the three month period ended March 31, 2013. Based on the analysis performed, the fair value and the carrying value of the Company’s long-term debt approximates its carrying value as of March 31, 2013 and December 31, 2012.

 

                                 
    March 31, 2013     December 31, 2012  
    Fair Value     Carrying Value     Fair Value     Carrying Value  

Long-term debt and related current maturities

   $ 16,261     $ 16,261     $ 9,573     $ 9,573  
   

 

 

    

 

 

    

 

 

    

 

 

  

 

As a result of being a global company, the Company’s earnings, cash flows and financial position are exposed to foreign currency risk. The Company’s primary objective for holding derivative financial instruments is to manage foreign currency risks. The Company accounts for derivative instruments and hedging activities as either assets or liabilities in the Consolidated Balance Sheet and carries these instruments at fair value. Foreign currency derivative instruments outstanding are not designated as hedges for accounting purposes. The gains and losses related to mark-to-market adjustments are recognized as Other operating (income) expense on the Statement of Consolidated Income during the period in which the derivative instruments were outstanding. At March 31, 2013, the Company had no derivative instruments outstanding. The Company does not enter into any trading or speculative positions with regard to derivative instruments.

As part of the January 31, 2012 Purchase Agreement to acquire Australian Electricity Systems PTY Ltd (AES), the Company recorded an additional earn-out consideration payment of $1.2 million US dollars. This amount represented the fair value of the earn-out consideration based on AES achieving a financial performance target over the twelve months ended June 30, 2012. The Company finalized the AES contingent consideration arrangement to $.4 million in 2012 which was paid to the former owner in April 2013.

Also, the Company acquired all the assets of Forma Line Industries CC on March 1, 2012 located in South Africa. As part of the Purchase Agreement for this acquisition, the Company entered into a one-year earn-out contingent consideration arrangement that ended on March 1, 2013. The fair value of this contingent consideration arrangement was $.1 million and was paid in March 2013.