Cash, Cash Equivalents and Short-Term Marketable Securities

3 Months Ended

Jul. 01, 2012

Cash, Cash Equivalents and Short-Term Marketable Securities [Abstract]

CASH, CASH EQUIVALENTS AND SHORT-TERM MARKETABLE SECURITIES

NOTE 4. CASH, CASH EQUIVALENTS AND SHORT-TERM MARKETABLE SECURITIES

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows:

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 or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

We have no assets or liabilities utilizing Level 3 inputs as of July 1, 2012 and April 1, 2012, respectively.

Our investment assets, measured at fair value on a recurring basis, as of the dates indicated below were as follows (in thousands, except for percentages):

	July 1, 2012
	Level 1		Level 2		Total
Assets:
Money market funds	$	6,222	$	—	$	6,222	3	%
U.S. government and agency securities		17,751		29,519		47,270	25	%
Corporate bonds and notes		—		67,009		67,009	35	%
Asset-backed securities		—		27,433		27,433	14	%
Mortgage-backed securities		—		43,176		43,176	23	%
Total investment assets	$	23,973	$	167,137	$	191,110	100	%

	April 1, 2012
	Level 1		Level 2		Total
Assets:
Money market funds	$	3,088	$	—	$	3,088	2	%
U.S. government and agency securities		16,282		28,544		44,826	23	%
Corporate bonds and notes		—		69,234		69,234	36	%
Asset-backed securities		—		26,364		26,364	14	%
Mortgage-backed securities		—		47,244		47,244	25	%
Total investment assets	$	19,370	$	171,386	$	190,756	100	%

Our cash, cash equivalents and short-term marketable securities as of the dates indicated below were as follows (in thousands):

	July 1, 2012		April 1, 2012
Cash and cash equivalents
Cash at financial institutions	$	4,003	$	5,626
Cash equivalents
Money market funds		6,222		3,088
Total cash and cash equivalents	$	10,225	$	8,714
Available-for-sale securities
U.S. government and agency securities	$	47,270	$	44,826
Corporate bonds and notes		67,009		69,234
Asset-backed securities		27,433		26,364
Mortgage-backed securities		43,176		47,244
Total short-term marketable securities	$	184,888	$	187,668

Our marketable securities include U.S. government and agency securities, corporate bonds and notes, and asset-backed and mortgage-backed securities. We classify investments as available-for-sale at the time of purchase and re-evaluate such designation as of each balance sheet date. We amortize premiums and accrete discounts to interest income over the life of the investment. Our available-for-sale securities, which we intend to sell as necessary to meet our liquidity requirements, are classified as cash equivalents if the maturity date is 90 days or less from the date of purchase and as short-term marketable securities if the maturity date is greater than 90 days from the date of purchase.

All marketable securities are reported at fair value based on the estimated or quoted market prices as of each balance sheet date, with unrealized gains or losses, net of tax effect, recorded in accumulated other comprehensive income (loss) within stockholders’ equity except those unrealized losses that are deemed to be other than temporary which are reflected in the impairment charges on investments line item on the consolidated statements of operations.

Realized gains or losses on the sale of marketable securities are determined by the specific identification method and are reflected in the interest income and other, net line item on the consolidated statements of operations.

Our net realized gains (losses) on marketable securities for the periods indicated below were as follows (in thousands):

	Three Months Ended
	July 1, 2012			July 3, 2011
Gross realized gains	$	240		$	170
Gross realized losses		(278	)		(214	)
Net realized losses	$	(38	)	$	(44	)

The following table summarizes our investments in marketable securities as of the dates indicated below, (in thousands):

	July 1, 2012
			Unrealized
	Amortized Cost		Gross Gains  (1)		Gross Losses  (1)			Net Gain (Loss)  (1)		Fair Value
Money market funds	$	6,222	$	—	$	—		$	—	$	6,222
U.S. government and agency securities		47,160		115		(5	)		110		47,270
Corporate bonds and notes		66,814		274		(79	)		195		67,009
Asset-backed securities		27,394		68		(29	)		39		27,433
Mortgage-backed securities		43,173		215		(212	)		3		43,176
Total investments	$	190,763	$	672	$	(325	)	$	347	$	191,110

	April 1, 2012
			Unrealized
	Amortized Cost		Gross Gains  (1)		Gross Losses  (1)			Net Gain (Loss)  (1)		Fair Value
Money market funds	$	3,088	$	—	$	—		$	—	$	3,088
U.S. government and agency securities		44,687		189		(50	)		139		44,826
Corporate bonds and notes		68,857		410		(33	)		377		69,234
Asset-backed securities		26,353		55		(44	)		11		26,364
Mortgage-backed securities		47,117		286		(159	)		127		47,244
Total investments	$	190,102	$	940	$	(286	)	$	654	$	190,756

(1) Gross of tax impact

Our asset-backed securities are comprised primarily of premium tranches of vehicle loans and credit card receivables, while our mortgage-backed securities are primarily from federal agencies. We do not own auction rate securities nor do we own securities that are classified as subprime. As of July 1, 2012, we have sufficient liquidity and do not intend to sell these securities to fund normal operations or realize any significant losses in the short term; however, these securities are available for use, if needed, for current operations.

We periodically review our investments in unrealized loss positions for other-than-temporary impairments. This evaluation includes, but is not limited to, quantitative and qualitative assessments and estimates regarding credit ratings, collateralized support, the length of time and significance of a security’s loss position, our intent not to sell the security, and whether it is more likely than not that we will not have to sell the security before recovery of its cost basis. For the three months ended July 1, 2012 and July 3, 2011, respectively, there were no investments identified with other-than-temporary declines in value.

The amortized cost and estimated fair value of cash equivalents and marketable securities classified as available-for-sale by expected maturity as of the dates indicated below were as follows (in thousands):

	July 1, 2012				April 1, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Less than 1 year	$	62,046	$	62,067	$	48,978	$	49,011
Due in 1 to 5 years		128,717		129,043		141,124		141,745
Total	$	190,763	$	191,110	$	190,102	$	190,756

The following table summarizes the gross unrealized losses and fair values of our investments in an unrealized loss position as of the dates indicated below, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

	July 1, 2012
	Less than 12 months					12 months or greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. government and agency securities	$	5,988	$	(5	)	$	—	$	—		$	5,988	$	(5	)
Corporate bonds and notes		16,374		(75	)		201		(4	)		16,575		(79	)
Asset-backed securities		2,384		(11	)		2,035		(18	)		4,419		(29	)
Mortgage-backed securities		18,143		(173	)		2,125		(39	)		20,268		(212	)
Total	$	42,889	$	(264	)	$	4,361	$	(61	)	$	47,250	$	(325	)

	April 1, 2012
	Less than 12 months					12 months or greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. government and agency securities	$	16,175	$	(50	)	$	—	$	—		$	16,175	$	(50	)
Corporate bonds and notes		11,685		(33	)		—		—			11,685		(33	)
Asset-backed securities		3,516		(5	)		3,786		(39	)		7,302		(44	)
Mortgage-backed securities		16,435		(108	)		2,417		(51	)		18,852		(159	)
Total	$	47,811	$	(196	)	$	6,203	$	(90	)	$	54,014	$	(286	)