Derivative Instruments

6 Months Ended

Jul. 03, 2011

Derivative Instruments [Abstract]

Derivative Instruments

NOTE 10:   Derivative Instruments

The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company does not currently manage its interest rate risk with derivative instruments; however, foreign currency exchange rate risk is currently mitigated with derivative instruments. The Company uses derivative instruments to provide an economic hedge against its transactional currency/functional currency exchange rate exposures. Forward contracts on currencies are entered into to manage the transactional currency/functional currency exposure of the Company’s Irish subsidiary’s accounts receivable denominated in U.S. dollars and intercompany receivables denominated in Japanese Yen. These forward contracts are used to minimize foreign currency gains or losses, as the gains or losses on these contracts are intended to offset the losses or gains on the underlying exposures.

These forward contracts do not qualify for hedge accounting. Both the underlying exposures and the forward contracts are recorded at fair value on the Consolidated Balance Sheets and changes in fair value are reported as “Foreign currency gain (loss)” on the Consolidated Statements of Operations. The Company recorded net foreign currency gains of $210,000 and $151,000 in the three-month and six-month periods in 2011, respectively, and net foreign losses of $8,000 and $173,000 in the three-month and six-month periods in 2010, respectively.

As of July 3, 2011, the Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk:

Currency	Amount
Japanese Yen/Euro	200,000,000 Japanese Yen
U.S. Dollar/Euro	14,310,000 U.S. Dollars

Information regarding the fair value of the forward contracts outstanding as of July 3, 2011 and December 31, 2010 was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance					Balance
	Sheet	July 3,		December 31,		Sheet	July 3,		December 31,
	Location	2011		2010		Location	2011		2010
Currency forward contracts	Prepaid expenses and other current assets	$	209	$	83	Accrued expenses	$	13	$	125

Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations for the three-month and six-month periods ended July 3, 2011 and July 4, 2010 were as follows (in thousands):

Location of

Amount of Gain (Loss)

Location of

Amount of Gain (Loss)

Gain (Loss)

Recognized in Income on

Gain (Loss)

Recognized in Income on

Recognized

Derivatives

Recognized

Derivatives

in Income

Three-months ended

in Income

Six-months ended

on

July 3,

July 4,

on

July 3,

July 4,

Derivatives

2011

2010

Derivatives

2011

2010

Currency forward contracts

Foreign currency gain (loss)

$

126

$

(206

)

Foreign currency gain (loss)

$

128

$

(274

)