Fair Value Measurements

12 Months Ended

Dec. 28, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

NOTE 4. FAIR VALUE MEASUREMENTS

ASC Topic 820 specifies a hierarchy of valuation techniques which requires an entity to maximize the use of observable inputs that may be used to measure fair value:

Level 1—Quoted prices in active markets are available for identical assets and liabilities. The Company’s Level 1 assets include cash equivalents, short-term investments, money market funds, and long-term investment securities, which are generally acquired or sold at par value and are actively traded.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company’s Level 2 assets and liabilities include corporate bonds and notes and forward currency contracts, respectively, whose value is determined using a pricing model with inputs that are observable in the market or corroborated with observable market data.

Level 3—Pricing inputs include significant inputs that are generally not observable in the marketplace. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At each balance sheet date, the Company performs an analysis of all applicable instruments and would include in Level 3 all of those whose fair value is based on significant unobservable inputs. Level 3 inputs are used on a non-recurring basis to measure the fair value of non-financial assets, including intangible assets, and property and equipment.

The Company’s valuation techniques used to measure the fair value of money market funds and other financial instruments were derived from quoted prices in active markets for identical assets. The valuation techniques used to measure the fair value of all other financial instruments were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.

Assets/Liabilities Measured and Recorded at Fair Value on a Recurring Basis

Financial assets measured on a recurring basis as of December 28, 2013 and December 29, 2012, are summarized below:

	Fair value,
	December 28, 2013
(in thousands)	Level 1		Level 2
Assets:
Corporate bonds and notes (1)	$	79,653	$	3,166
Money market funds (1)		14,629		-
United States (“US”) treasury and government agency notes (1)		28,985		-
Foreign government and agency notes (1)		2,048		-
US state and municipal securities (1)		433		-
Total assets	$	125,748	$	3,166

(1) Included in cash and cash equivalents, short-term investments, and long-term investment securities (see Note 7. Investment Securities).

	Fair value,
	December 29, 2012
(in thousands)	Level 1
Assets:
Corporate bonds and notes (1)	$	63,565
Money market funds (1)		50,528
US treasury and government agency notes (1)		33,854
Foreign government and agency notes (1)		4,044
US state and municipal securities (1)		1,746
		-
Total assets	$	153,737

Financial liabilities measured on a recurring basis are summarized below:

	Fair value,
	December 28, 2013
(in thousands)	Level 2
Current liabilities:
Forward currency contracts (1)	$	612

	Fair value,
	December 29, 2012
(in thousands)	Level 2
Current liabilities:
Forward currency contracts (1)	$	-

(1) Included in Accrued liabilities.

Assets/Liabilities Measured and Recorded at Fair Value on a Non-Recurring Basis

We measure the fair value of our indebtedness carried at amortized cost only for the purposes of disclosing such amount.  As of December 28, 2013, the carrying value of our $30.0 million outstanding drawdown on our line of credit approximated its fair value, given the short-term nature of this borrowing and a lack of significant interest rate changes since the borrowing occurred.

Our non-financial assets, such as prepaid expenses and other current assets, property and equipment, and intangible assets are recorded at fair value only if an impairment charge is recognized.  The following table presents the non-financial assets that were re-measured due to changes in use and recorded at fair value on a non-recurring basis during 2013 and 2012 on those assets:

									Total
									Losses for
	Net Carrying Value		Fair Value Measured and Recorded Using						Year Ended
(In thousands)	As of December 28, 2013		Level 1		Level 2		Level 3		December 28, 2013
Prepaid expenses and other current assets	$	-	$	-	$	-	$	-	$	(585)
Property and equipment, net		-		-		-		-		(2,214)
Intangible assets		-		-		-		-		(167)
Total losses for assets held as of December 28, 2013										(2,966)
Total losses for recorded non-recurring measurement									$	(2,966)

									Total
									Losses for
	Net Carrying Value		Fair Value Measured and Recorded Using						Year Ended
(In thousands)	As of December 29, 2012		Level 1		Level 2		Level 3		December 29, 2012
Prepaid expenses and other current assets	$	-	$	-	$	-	$	-	$	(979)
Property and equipment, net		-		-		-		-		(520)
Intangible assets		-		-		-		-		(260)
Total losses for assets held as of December 29, 2012										(1,759)
Total losses for recorded non-recurring measurement									$	(1,759)

The losses recorded during 2013 and 2012 were mainly included in Research and Development expenses in the Consolidated Statements of Operations.  See Note 1. Summary of Significant Accounting Policies for details on the asset impairments.