Debt (Tables)

3 Months Ended

Apr. 04, 2015

Debt Disclosure [Abstract]

Summary of debt outstanding

Cadence’s outstanding debt as of April 4, 2015 and January 3, 2015 was as follows:

	April 4, 2015							January 3, 2015
	(In thousands)
	Principal		Unamortized Discount			Carrying Value		Principal		Unamortized Discount			Carrying Value
2015 Notes	$	296,137	$	(2,470	)	$	293,667	$	349,999	$	(7,500	)	$	342,499
2024 Notes	350,000		(1,295		)	348,705		350,000		(1,324		)	348,676
Revolving credit facility	—		—			—		—		—			—
Total outstanding debt	$	646,137	$	(3,765	)	$	642,372	$	699,999	$	(8,824	)	$	691,175

Summary of key terms of 2015 notes

A summary of key terms of the 2015 Notes is as follows:

	2015 Notes
	(In thousands, except percentages and per share amounts)
Outstanding principal maturity value – at April 4, 2015	$296,137
Contractual interest rate	2.625%
Contractual maturity date	June 1, 2015
Initial conversion rate	132.5205 shares of common stock per $1,000 principal amount of notes, which is equivalent to a conversion price of approximately $7.55 per share of Cadence common stock.
Conversion feature (in addition to principal amount payable in cash)	Cash to the extent Cadence’s stock price exceeds approximately $7.55 per share, calculated based on the applicable conversion rate multiplied by the volume weighted average price of Cadence common stock over a specified period.
Early conversion conditions (or the Early Conversion Conditions)	• Closing stock price greater than $9.81 for at least 20 of the last 30 trading days in a fiscal quarter (convertible only for subsequent quarter); • Specified corporate transactions; or • Note trading price falls below a calculated minimum.
Conversion immediately preceding maturity	From March 1, 2015 until the second trading day immediately preceding the maturity date, holders may elect to convert their 2015 Notes into cash as described above under “Conversion feature.”
Redemption at Cadence’s option prior to maturity	None.
Fundamental change put right	Upon certain fundamental corporate changes prior to maturity, the 2015 Note holders could require Cadence to repurchase their notes for cash equal to the principal amount of the notes plus accrued interest.
Make-whole premium	Upon certain fundamental changes prior to maturity, if Cadence’s stock price were between $6.16 and $40.00 per share at that time, the holders of the notes would be entitled to an increase to the conversion rate. This is referred to as a “make-whole premium.”
Financial covenants	None.

Effective interest rate and components of interest expense of 2015 notes

The effective interest rate and components of interest expense of the 2015 Notes for the three months ended April 4, 2015 and March 29, 2014 were as follows:

	Three Months Ended
	April 4, 2015			March 29, 2014
	(In thousands, except percentages)
Effective interest rate	8.1		%	8.1		%
Contractual interest expense	$	1,809		$	2,289
Amortization of debt discount	$	5,030		$	4,232