Note 3 - Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Measurements

Below is a summary of assets and liabilities measured at fair value (in thousands):

	As of September 30, 2016
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents	$	18,118	$	-	$	-	$	18,118
Government securities		20,296		-		-		20,296
Total	$	38,414	$	-	$	-	$	38,414

Liabilities
Forward foreign currency contracts	$	-	$	98	$	-	$	98
Total	$	-	$	98	$	-	$	98

	As of December 31, 2015
	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets
Cash equivalents	$	39,233	$	-	$	-	$	39,233
Government securities		25,232		-		-		25,232
Total	$	64,465	$	-	$	-	$	64,465

Liabilities
Forward foreign currency contracts	$	-	$	537	$	-	$	537
Total	$	-	$	537	$	-	$	537

As of September 30, 2016 and December 31, 2015, the Company’s cash equivalents consist principally of money market funds and government debt securities with original maturities of 90 days or less. Government securities consist principally of government debt securities and money market funds which are classified as available-for-sale. Forward foreign currency contracts consist of contracts with credit-worthy financial institutions to buy Swiss Francs with U.S. dollars in the future at agreed upon exchange rates.

Forward foreign currency contracts are stated at fair value and consist of Level 2 financial instruments in the fair value hierarchy. The Company determines the fair value of its forward foreign currency contracts based on pricing from a service provider. The service provider values the instruments based on market prices from a variety of industry-standard independent data providers. Such market prices are based on inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly (Level 2 inputs). Cash equivalents and government securities are stated at fair value and consist of Level 1 financial instruments in the fair value hierarchy. The Company determined the fair value of its debt security holdings based on pricing from a service provider. The service provider values the securities based on market prices from a variety of industry-standard independent data providers. These market prices are quoted prices in active markets for identical assets (Level 1 inputs).

Available-for-sale securities at September 30, 2016 and December 31, 2015 consist of the following (in thousands):

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2016
Government securities
(Due within 1 year)	$	20,288	$	8	$	-		$	20,296
	$	20,288	$	8	$	-		$	20,296

December 31, 2015
Government securities
(Due within 1 year)	$	25,243	$	1	$	(12	)	$	25,232
	$	25,243	$	1	$	(12	)	$	25,232

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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