Cash, Cash Equivalents and Investments

9 Months Ended

Sep. 30, 2013

Cash And Cash Equivalents [Abstract]

Cash, Cash Equivalents and Investments

4. Cash, Cash Equivalents and Investments

The Company’s cash and investments consist of the following:

	September 30, 2013		December 31 2012
Cash	$	16,789	$	13,043
Cash equivalents		631		4,500
Short-term investments		37,516		33,596
	$	54,936	$	51,139

Cash and Cash equivalents

At September 30, 2013, cash and cash equivalents included bank balances and investments with original maturities less than 90 days. At September 30, 2013 and December 31, 2012, the Company’s cash equivalents were invested in highly liquid AAA rated money market funds that are required to comply with Rule 2a-7 of the Investment Company Act of 1940. Such funds utilize the amortized cost method of accounting, seek to maintain a constant $1.00 per share price, and are redeemable upon demand. The Company restricts its investments in AAA rated money market funds to those invested 100% in either short-term U.S. Government Agency securities or bank repurchase agreements collateralized by these same securities. The fair values of these money market funds are established through quoted prices in active markets for identical assets (Level 1 inputs). The cash in the Company’s U.S. banks is insured by the Federal Deposit Insurance Corporation up to the insurable amount of $250,000.

At September 30, 2013, the Company had $16.8 million in cash and $0.6 million in cash equivalents and at December 31, 2012, the Company had $13.0 million in cash and $4.5 million in cash equivalents. The Company had $0.8 million of cash and cash equivalents in foreign bank accounts at September 30, 2013 and at December 31, 2012. As of September 30, 2013, the Company has no intentions of repatriating the cash in its foreign bank accounts. If the Company decides to repatriate the cash in the foreign bank accounts, it may experience difficulty in doing so in a timely manner and it may also be exposed to foreign currency fluctuations and taxes.

Investments

At September 30, 2013 and December 31, 2012, the Company’s short-term investments consisted of pre-refunded municipal bonds, U.S. government agency bonds, and AA or higher rated corporate bonds all classified as held-to-maturity.

At September 30, 2013 the Company had invested $14.7 million in pre-refunded municipal bonds, $8.5 million in U.S. government agency bonds, $7.8 million in AA rated or higher corporate bonds, and $6.5 million in certificates of deposit. The income and principal from the pre-refunded municipal bonds are secured by an irrevocable trust of U.S. Treasury securities. The bonds, classified as short-term investments, have original maturities greater than 90 days and mature in less than one year. At September 30, 2013, the Company had no investments classified as long-term investment securities. The Company’s bonds are recorded at the purchase price and carried at amortized cost. The net unrealized gains were $13 at September 30, 2013. Approximately 8% of the Company’s bonds were protected by bond default insurance at September 30, 2013.

At December 31, 2012, the Company had invested $10.1 million in pre-refunded municipal bonds and taxable bond funds, $9.9 million in AA rated or higher corporate bond funds, $8.5 million in U.S. government agency bonds, and $5.1 million in certificates of deposit.

The Company categorizes its financial instruments within a fair value hierarchy established in accounting and disclosures for fair value measurements. The fair value hierarchy is described under the Fair Value of Financial Instruments in Note 2. For the Level 2 investments, the Company uses quoted prices of similar assets in active markets.

Cash equivalents, Level 1 and Level 2 investments measured at fair value were as follows at September 30, 2013 and December 31, 2012:

	September 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds and other cash equivalents	$	631	$	0	$	0	$	631	$	4,500	$	0	$	0	$	4,500
Investments:
Certificates of deposit		6,493		0		0		6,493		5,062		0		0		5,062
US government agency bonds		0		8,576		0		8,576		0		8,498		0		8,498
Municipal bonds		0		14,678		0		14,678		0		10,162		0		10,162
Corporate debt securities		0		7,782		0		7,782		0		9,880		0		9,880
Total	$	7,124	$	31,036	$	0	$	38,160	$	9,562	$	28,540	$	0	$	38,102