Fair Value Measurements and Disclosures

9 Months Ended

Oct. 01, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurements and Disclosures

Fair Value Measurements and Disclosures

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard assumes that the transaction to sell the asset or transfer the liability occurs in the principal or most advantageous market for the asset or liability and establishes that the fair value of an asset or liability shall be determined based on the assumptions that market participants would use in pricing the asset or liability.

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The classification of a financial asset or liability within the hierarchy is based upon the lowest level input that is significant to the fair value measurement. The fair value hierarchy prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 — Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Such unobservable inputs include an estimated discount rate used in our discounted present value analysis of future cash flows, which reflects our estimate of debt with similar terms in the current credit markets. As there is currently minimal activity in such markets, the actual rate could be materially different.

The following table presents the Company’s fair value measurements that are measured at the estimated fair value, on a recurring basis, categorized in accordance with the fair value hierarchy (in thousands):

As of October 1, 2011	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents:
Cash	$	18,294	$	—	$	—	$	18,294
Money market account	81,855		—		—		81,855
Total cash and cash equivalents	100,149		—		—		100,149
Total financial assets	$	100,149	$	—	$	—	$	100,149
Fair value of contingent payments to Zygo Corporation	$	—	$	—	$	2,785	$	2,785
Total financial liabilities	$	—	$	—	$	2,785	$	2,785

As of January 1, 2011	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Cash and cash equivalents:
Cash	$	14,750	$	—	$	—	$	14,750
Money market account	51,710		—		—		51,710
Total cash and cash equivalents	66,460		—		—		66,460
Total financial assets	$	66,460	$	—	$	—	$	66,460
Fair value of contingent payments to Zygo Corporation	$	—	$	—	$	2,652	$	2,652
Total financial liabilities	$	—	$	—	$	2,652	$	2,652

Changes in the Company’s Level 3 liabilities were as follows (in thousands):

	Level 3
Fair value of Level 3 liability at January 2, 2010	$	5,688
Payments made to Zygo Corporation	(3,503		)
Change in fair value included in earnings	467
Fair value of Level 3 liability at January 1, 2011	2,652
Payments made to Zygo Corporation	(301		)
Changes in fair value included in earnings	434
Fair value of Level 3 liability at October 1, 2011	$	2,785