Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

Note 3. Fair Value Measurements

We measure certain assets and liabilities at fair value on a recurring or nonrecurring basis. We categorize each of our fair value measurements into one of three levels as follows:

• Level 1: Quoted prices in active markets for identical assets;

• Level 2: Quoted prices in active markets for similar assets, which we use to value our certificates of deposit, or comparable sales, such as quoted market rates for similar contracts. Specifically, we obtain current pricing from the issuing bank for identical items purchased on the last business day of our reporting period; or

• Level 3: Unobservable inputs that are not corroborated by market data.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our financial assets and liabilities that are measured at fair value on a recurring basis comprised the following as of September 30, 2012 (in thousands):

	Level 1		Level 2		Level 3		Fair Value at September 30, 2012
Money Market Funds	$	38,591	$	—	$	—	$	38,591
Stock	186		—		—		186
Derivative instruments – assets	—		2,219		—		2,219
Total assets at fair value	$	38,777	$	2,219	$	—	$	40,996

	Level 1		Level 2			Level 3		Fair Value at September 30, 2012
Derivative instruments – liabilities	$	—	$	(469	)	$	—	$	(469	)
Total liabilities at fair value	$	—	$	(469	)	$	—	$	(469	)

Our financial assets and liabilities that are measured at fair value on a recurring basis comprised the following as of December 31, 2011 (in thousands):

	Level 1		Level 2		Level 3		Fair Value at December 31, 2011
Money market funds	$	15,275	$	—	$	—	$	15,275
Certificates of deposit	—		3,555		—		3,555
Stock	170		—		—		170
Derivative instruments – assets	—		985		—		985
Total assets at fair value	$	15,445	$	4,540	$	—	$	19,985

	Level 1		Level 2			Level 3		Fair Value at December 31, 2011
Derivative instruments – liabilities	$	—	$	(1,801	)	$	—	$	(1,801	)
Total liabilities at fair value	$	—	$	(1,801	)	$	—	$	(1,801	)

We had no transfers between Level 1 and Level 2 assets and liabilities in the three and nine months ended September 30, 2012 and October 2, 2011.

The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and payroll and related expenses at September 30, 2012 and December 31, 2011, approximate their carrying values due to their short-term nature. The fair value of long-term debt at September 30, 2012 approximates its carrying value.