Cash and Cash Equivalents and Investments

6 Months Ended

Oct. 01, 2011

Cash and Cash Equivalents and Investments [Abstract]

Cash and Cash Equivalents and Investments

Note 3 - Cash and Cash Equivalents and Investments

The Company's cash equivalents consist primarily of investments in money market funds as follows (in thousands):

	October 1, 2011		April 2, 2011
Cash	$	2,685	$	8,377
Cash equivalents:
Money market funds		3,093		10,681
Government agency Bonds		-		4,500
Corporate bonds		-		253
Municipal bonds		-		151
Total cash and cash equivalents	$	5,778	$	23,962

The Company's portfolio of short-term and long-term investments is as follows (in thousands):

	October 1, 2011
	Amortized		Unrealized		Unrealized			Carrying
	Cost		Gain		Loss			Value
Short-term investments:
Trading securities:
Equity mutual funds related to NQDCP	$	7,565	$	-	$	-		$	7,565
Available-for-sale securities:
Municipal bonds		33,966		18		-			33,984
Discount notes		1,249		1		-			1,250
Commercial paper		1,000		-		-			1,000
Corporate bonds		41,938		-		(275	)		41,663
Government agency bonds		21,733		31		(1	)		21,763
Certificates of deposits		12,907		-		(5	)		12,902
Total short-term investments	$	120,358	$	50	$	(281	)	$	120,127
Long-term investments:
Available-for sale securities	$	30,350	$	-	$	(2,150	)	$	28,200

	April 2, 2011
	Amortized		Unrealized		Unrealized			Carrying
	Cost		Gain		Loss			Value
Short-term investments:
Trading securities:
Equity mutual funds related to NQDCP	$	8,157	$	-	$	-		$	8,157
Available-for-sale securities:
Municipal bonds		62,617		2		(2	)		62,617
Discount notes		3,998		-		-			3,998
Corporate bonds		27,968		-		(44	)		27,924
Government agency bonds		6,317		-		(1	)		6,316
Certificates of deposits		749		-		(1	)		748
Total short-term investments	$	109,806	$	2	$	(48	)	$	109,760
Long-term investments:
Available-for sale securities	$	32,750	$	-	$	(2,550	)	$	30,200

The Company's short-term and long-term investments by contractual maturity are as follows (in thousands):

	October 1, 2011		April 2, 2011
Short-term investments:
Trading securities:
Due in one year or less	$	7,565	$	8,157
Available-for-sale securities:
Due in one year or less		65,903		62,919
Due in one to two years		46,659		38,684
Total short-term investments	$	120,127	$	109,760
Long-term investment:
Available-for-sale securities at amortized cost:
Due after ten years	$	28,200	$	30,200

Short-term investments classified as trading securities consisted entirely of investments in mutual funds held by the Company's Non-Qualified Deferred Compensation Plan ("NQDCP"). Unrealized gains (losses) on trading securities are recorded in the Condensed Consolidated Statement of Income. Unrealized losses on trading securities were $822,000 and $723,000 for the three and six months ended October 1, 2011, respectively, compared to a gain of $507,000 and $184,000 for the same periods of the prior fiscal year.

The Company's available-for-sale portfolio as of October 1, 2011 was comprised of municipal bonds, corporate bonds, government agency bonds, discount notes, certificates of deposits, commercial paper and remaining ARS. Unrealized gains (losses) on available-for-sale securities are recorded in other comprehensive income as declines in fair values are considered to be temporary.

During the three and six months ended October 1, 2011, the Company disposed of short-term available-for-sale securities totaling $40,944,000 and $108,291,000 at par, compared to $32,253,000 and $65,972,000, respectively, for the same periods of the prior fiscal year.  The realized gains and losses of these transactions were immaterial.

The Company's ARS have contractual maturities between 20 and 30 years. They are in the form of auction rate bonds whose interest rates had historically been reset every thirty-five days through an auction process. At the end of each reset period, investors could sell or continue to hold the securities at par. These ARS held by the Company are backed by pools of student loans and are primarily guaranteed by the U.S. Department of Education. In addition, all the ARS held by the Company are rated by the major independent rating agencies as either AAA or Aaa.

ARS with a par value of $30,350,000 were classified as non-current assets and were presented as long-term investments on the Company's balance sheet as of October 1, 2011.

The Company has concluded that the decline in fair value of the ARS investments, as of October 1, 2011, is considered to be temporary in part due to the following:

• these investments are of high credit quality and a significant portion of them is collateralized and is guaranteed by the US Department of Education;
• there have been no defaults on the ARS held by the Company as of October 1, 2011;
• their AAA or Aaa credit ratings have not been reduced as of October 1, 2011;
• the Company has no intention to sell the securities below par value and it is more likely than not that the Company will not be required to sell the securities until their value returns to par; an
• the Company received ARS redemptions at par value of $36,450,000, $19,250,000 and $12,150,000, respectively,in fiscal years 2011, 2010 and 2009. Additionally, during the six months ended October 1, 2011, the Company received redemptions at par value totaling $2,400,000.

If uncertainties in the credit and capital markets continue or these markets deteriorate further, the Company may incur additional impairment to its ARS holdings. The Company will continue to monitor its ARS holdings and may be required to record an impairment charge through the income statement if the decline in fair value is determined to be other-than-temporary or the credit quality of its ARS holdings declines.