Cash, Cash Equivalents and Investments

9 Months Ended

Sep. 30, 2015

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents and Investments

4. Cash, Cash Equivalents and Investments

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

	September 30, 2015		December 31, 2014
Cash	$	8,625	$	19,731
Cash equivalents		4,262		701
Short-term investments		21,428		39,577
	$	34,315	$	60,009

Cash and Cash equivalents

At September 30, 2015, cash and cash equivalents included bank balances and investments with original maturities less than 90 days. At September 30, 2015 and December 31, 2014, the Company’s cash equivalents were invested in highly liquid AAA 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 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.

At September 30, 2015, the Company had $8.6 million in cash and $4.3 million in cash equivalents and at December 31, 2014, the Company had $19.7 million in cash and $0.7 million in cash equivalents. The Company had $1.4 million and $0.5 million of cash and cash equivalents in foreign bank accounts at September 30, 2015 and December 31, 2014, respectively. As of September 30, 2015, 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. The Company may also be exposed to foreign currency fluctuations and taxes if it repatriates these funds. The Company’s cash in its foreign bank accounts is not insured.

Investments

At September 30, 2015 and December 31, 2014, the Company’s short-term investments consisted of pre-refunded municipal bonds, U.S. government agency bonds, AA or higher rated corporate bonds, and certificates of deposit classified as held-to-maturity. At September 30, 2015 the Company had invested $7.7 million in U.S. government agency bonds, $7.4 million in pre-refunded municipal bonds, $4.2 million in AA rated or higher corporate bonds, and $2.1 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 have original maturities greater than 90 days and mature in less than one year. The Company’s bonds are recorded at the purchase price and carried at amortized cost. The net unrealized gains were $6 at September 30, 2015. Approximately 9% and 5% of the Company’s bonds were protected by bond default insurance at September 30, 2015 and December 31, 2014, respectively.

At December 31, 2014, the Company had invested $13.5 million in U.S. government agency bonds, $11.8 million in certificates of deposit, $7.2 million in AA rated or higher corporate bond funds, $5.2 million in pre-refunded municipal bonds and taxable bond funds, and $2.0 million in mutual funds.

The Company categorizes its financial instruments within a fair value hierarchy according to accounting guidance for fair value. 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 and Level 1 and Level 2 investments measured at fair value were as follows at September 30, 2015 and December 31, 2014:

	September 30, 2015								December 31, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds and other cash equivalents	$	4,262	$	0	$	0	$	4,262	$	701	$	0	$	0	$	701
Investments:
US government agency bonds		0		7,671		0		7,671		0		13,502		0		13,502
Certificates of deposit		2,138		0		0		2,138		11,782		0		0		11,782
Pre-refunded municipal bonds		0		7,375		0		7,375		0		5,162		0		5,162
Corporate bonds		0		4,250		0		4,250		0		7,155		0		7,155
Mutual funds		0		0		0		0		1,971		0		0		1,971
Total	$	6,400	$	19,296	$	0	$	25,696	$	14,454	$	25,819	$	0	$	40,273