Fair Value Measurements

12 Months Ended

Dec. 30, 2011

Fair Value Measurements [Abstract]

FAIR VALUE MEASUREMENTS

17. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis. A summary of the valuation methodologies for assets and liabilities measured on a recurring basis is as follows:

Foreign currency contracts - The fair value of foreign currency contracts outstanding at December 30, 2011 and December 31, 2010 were determined through the use of cash flow models that utilize observable market data inputs to estimate fair value. These observable market data inputs include spot and forward foreign currency exchange rates, interest rates and credit spread curves. In addition to the above, the Company received fair value estimates from the foreign currency contract counterparty to verify the reasonableness of the Company's estimates. These fair value calculations are categorized in Level 2 of the fair value hierarchy.

Interest rate swap - The fair value of the Company's interest rate swap outstanding at December 31, 2010 was determined through the use of a cash flow model that utilizes observable market data inputs. These observable market data inputs include LIBOR, swap rates, and credit spread curves. In addition to the above, the Company received a fair value estimate from the interest rate swap counterparty to verify the reasonableness of the Company's estimate. This fair value calculation was categorized in Level 2 of the fair value hierarchy.

	The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
		Fair Value Measurements Using
					Quoted
					Prices in		Significant
					Active Markets		Other		Significant
			At		for Identical		Observable		Unobservable
			December 30,		Assets		Inputs		Inputs
Description			2011		(Level 1)		(Level 2)		(Level 3)
Liabilities
Foreign currency contracts (Note 14)		$	538	$	-	$	538	$	-
		Fair Value Measurements Using
					Quoted
					Prices in		Significant
					Active Markets		Other		Significant
			At		for Identical		Observable		Unobservable
			December 31,		Assets		Inputs		Inputs
Description			2010		(Level 1)		(Level 2)		(Level 3)
Assets
Foreign currency contracts		$	315	$	-	$	315	$	-
Liabilities
Interest rate swap		$	436	$	-	$	436	$	-

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Fair value standards also apply to certain nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis. For example, certain long-lived assets such as goodwill, intangible assets, cost method investments and property, plant and equipment are measured at fair value when an impairment is recognized and the related assets are written down to fair value. A summary of the valuation methodologies for assets and liabilities measured on a nonrecurring basis is as follows:

Cost method investment - The Company holds investments in equity securities that are accounted for as cost method investments, which are classified as Other Long-Term Assets, and are measured at fair value only if certain events or circumstances occur that have a significant effect on the fair value of the investment. The aggregate recorded amount of cost method investments at December 30, 2011 and December 31, 2010was $5.7 million and $11.8 million, respectively. During 2011 and 2010, the Company recognized impairment charges related to its cost method investments of $0.3 million and $0.2 million, respectively. The fair value of these investments was determined by reference to recent sales data of similar shares to independent parties in an inactive market. This fair value calculation was categorized in Level 2 of the fair value hierarchy.

On January 5, 2011, the Company sold its cost method investment in IntElect Medical, Inc. (“IntElect”) in conjunction with Boston Scientific's acquisition of IntElect. This transaction resulted in a pre-tax gain of $4.5 million.

Property, plant and equipment, net - During 2010, one Greatbatch Medical facility, which was previously classified as an asset held for sale, was reclassified to Property, Plant and Equipment, Net as management decided to utilize this facility for future operations. This building was recorded at fair value at the date of reclassification and is now being amortized on a straight-line basis over its remaining estimated useful life. The fair value was determined by reference to recent sales data for comparable facilities. This fair value calculation was categorized in Level 2 of the fair value hierarchy.

	The following table provides information regarding assets and liabilities recorded at fair value on a nonrecurring basis. There were no such assets or liabilities as of December 30, 2011 (in thousands):
		Fair Value Measurements Using
					Quoted
					Prices in		Significant
					Active Markets		Other		Significant
			At		for Identical		Observable		Unobservable
			December 31,		Assets		Inputs		Inputs
Description			2010		(Level 1)		(Level 2)		(Level 3)
Assets
Property, plant and equipment, net (Note 12)		$	1,908	$	-	$	1,908	$	-
Cost method investment			317		-		317		-

Fair Value of Other Financial Instruments

Convertible subordinated notes - The fair value of the Company's convertible subordinated notes disclosed in Note 8 “Debt” was determined based upon recent third-party transactions for the Company's notes in an inactive market. The Company's convertible subordinated notes are valued for disclosure purposes utilizing Level 2 measurements of the fair value hierarchy.

Pension plan assets – The fair value of the Company's pension plan assets disclosed in Note 9 “Employee Benefit Plans” are determined based upon quoted market prices in active markets, quoted market prices in inactive markets or multidimensional relational models with observable market data inputs to estimate fair value. These observable market data inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data. The Company's pension plan assets are categorized in Level 1 or Level 2 of the fair value hierarchy.