Debt And Lines Of Credit

9 Months Ended

Oct. 01, 2011

Debt And Lines Of Credit [Abstract]

Debt And Lines Of Credit

NOTE 10 DEBT AND LINES OF CREDIT

In February 2007, the Company issued $175 million in convertible subordinated notes. The notes are subordinated to all of the Company's existing and future senior indebtedness, mature on February 15, 2012 and bear interest at a rate of 2.5% per year, payable in cash semiannually in arrears on February 15 and August 15 of each year.

Holders may convert their notes into shares of the Company's common stock based on a conversion rate of 41.5861 shares per $1,000 principal amount of notes (equal to an initial conversion price of $24.05 per share) under certain circumstances. Upon conversion, in lieu of shares of the common stock, for each $1,000 principal amount of notes, a holder will receive an amount in cash equal to the lesser of (i) $1,000 or (ii) the conversion value, determined in the manner set forth in the indenture. If the conversion value exceeds $1,000, the Company will also deliver, at its election, cash or common stock or a combination of cash and common stock with respect to the remaining common stock deliverable upon conversion. As of October 1, 2011, the conversion value was less than the principal amount of the notes.

At October 1, 2011, the Company had $126.8 million in convertible subordinated notes outstanding with a carrying value of $125.2 million, net of $1.6 million in unamortized debt discount, which is included in short-term borrowings in the accompanying consolidated balance sheets. At January 1, 2011, the Company had $126.8 million in convertible subordinated notes outstanding with a carrying value of $122.0 million, net of $4.8 million in unamortized debt discount, which was included in long-term debt. At October 1, 2011 and January 1, 2011, the carrying value of the equity component was $26.2 million, net of $0.9 million of equity issuance costs. At October 1, 2011, debt issuance costs of $0.3 million, net of accumulated amortization, was included in prepaid expenses and other current assets. At January 1, 2011, debt issuance costs of $0.8 million, net of accumulated amortization, was included in other assets. The remaining debt issuance costs and unamortized debt discount are being amortized through February 15, 2012 using the effective interest method.

Interest cost on the convertible subordinated notes consisted of the following components:

	Three Months Ended				Nine Months Ended
(In thousands)	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Contractual interest	$	792	$	792	$	2,377	$	2,377
Amortization of debt discount		1,054		1,019		3,135		3,031
Interest cost on convertible subordinated notes	$	1,846	$	1,811	$	5,512	$	5,408

In June 2011, the Company retired 300 million yen in private placement bonds that matured on June 30, 2011 and issued 200 million yen ($2.6 million at October 1, 2011) in private placement bonds through a Japanese bank. These new bonds bear interest at a rate of 0.62% per year, payable in cash semiannually in arrears on June 30 and December 31 of each year, and mature on June 30, 2014. The bonds are included in long-term debt in the accompanying consolidated balance sheet as of October 1, 2011.

At October 1, 2011, the Company had a total of nine lines of credit, including one domestic revolving line of credit, three revolving lines of credit with Japanese banks, and five revolving lines of credit with an Austrian financial institution. Additionally, the Company has agreements with two Japanese banks under which it sells trade notes receivable with recourse, and the Company has three promissory notes payable to an Austrian financial institution.

The Company's domestic revolving line of credit has a total credit limit of $3.0 million. Certain certificates of deposit held at this lending institution collateralize this line of credit, which bears interest at either the prevailing London Interbank Offered Rate (LIBOR) (0.24% at October 1, 2011) plus 1.00% or the British Bankers Association LIBOR Daily Floating Rate (0.15% at October 1, 2011) plus 1.00%, at the Company's option, and carries an unused line fee of 0.25% per year. At October 1, 2011, there were no balances outstanding under this line of credit, with $0.7 million available, after considering outstanding letters of credit totaling $2.3 million. On October 4, 2011, the Company entered into a new credit agreement with certain lenders, as discussed in Note 18, and terminated this line of credit.

The three revolving lines of credit with Japanese banks totaled 1.0 billion yen ($13.0 million at October 1, 2011) and expire as follows: $7.8 million on November 30, 2011, $3.9 million on July 27, 2012, and $1.3 million on January 31, 2012. The $7.8 million and $1.3 million lines of credit bear interest at the prevailing bank rate at each institution, which was 2.475% and 2.20%, respectively, at October 1, 2011, and the $3.9 million line of credit bears interest at LIBOR plus 1.75%. Certain certificates of deposit held by the lending institution's U.S. affiliate collateralize the $3.9 million line of credit. At October 1, 2011, the Company had $8.2 million outstanding and $4.8 million available for borrowing under these lines of credit. Amounts outstanding are included in short-term borrowings in the accompanying consolidated balance sheets.

The Company has agreements with two Japanese banks under which it sells trade notes receivable with recourse. These agreements allow the Company to sell receivables totaling up to 550 million yen ($7.1 million at October 1, 2011), have no expiration dates and bear interest at the prevailing bank rate, which was 1.475% at October 1, 2011. At October 1, 2011, the Company had $0.6 million outstanding and $6.5 million available for the sale of notes receivable under these agreements. Amounts outstanding under these agreements are included in short-term borrowings in the accompanying consolidated balance sheets, as the sale of these receivables has not met the criteria for sale treatment in accordance with ASC 860-30, Transfers and Servicing - Secured Borrowing and Collateral.

As of October 1, 2011, the weighted-average effective interest rate on all of the Company's Japanese borrowings, including the private placement bonds, was 2.00%.

As part of the acquisition of High Q, the Company assumed certain loans with Austrian financial institutions, eight of which remain outstanding as of October 1, 2011. Three of the loans are promissory notes with remaining principal balances of €0.1 million ($0.1 million) each at October 1, 2011, which bear interest at rates per annum of 3.00%, 2.48% and 3.50%, and become due in full in December 2012, December 2018 and December 2020, respectively. Principal and interest on such notes are paid monthly. The Company also has five revolving lines of credit with an aggregate outstanding balance of €3.0 million ($4.0 million) as of October 1, 2011. These lines of credit are secured by certain cash deposits, accounts receivable and bank guarantees. These lines of credit do not require principal repayment as long as certain conditions are met. Interest accrues on these lines of credit at a rate of 2.45% and is payable bi-monthly. Amounts outstanding under all of these loans with Austrian financial institutions are included in long-term debt in the accompanying balance sheet as of October 1, 2011.

Total short-term debt, net of unamortized debt discount, was as follows:

(In thousands)	October 1, 2011		January 1, 2011
Lines of credit	$	8,759	$	8,788
Japanese private placement bonds due June 2011, interest at 1.55% payable semi-annually		—		3,680
Convertible notes due February 2012, interest at 2.5% payable semi-annually		125,178		—
Total short-term debt	$	133,937	$	12,468

Total long-term debt was as follows:

(In thousands)	October 1, 2011		January 1, 2011
Japanese private placement bonds due June 2014, interest at 0.62% payable semi-annually	$	2,597	$	—
Austrian amortizing loans due December 2012 through December 2020, interest rates from 2.45% to 3.50%		309		—
Austrian lines of credit, no due date, interest at 2.45% payable bi-monthly		4,017		—
Convertible notes due February 2012, interest at 2.5% payable semi-annually		—		122,042
Total long-term debt	$	6,923	$	122,042