Investments in Other Equity Securities

3 Months Ended

Mar. 30, 2018

Investments, All Other Investments [Abstract]

Investments in Equity Securities

INVESTMENTS IN EQUITY SECURITIES

Vislink

In 2014, the Company acquired a 3.3% interest in Vislink plc (“Vislink”), a U.K. public company listed on the AIM exchange, for $3.3 million. On February 3, 2017, Vislink completed the disposal of its hardware division and changed its name to Pebble Beach Systems (“PBS”). The investment in PBS was accounted for as a cost method investment as the Company did not have significant influence over its operational and financial policies.

In the first quarter of 2017, PBS announced its financial results for fiscal 2016 which showed a significant increase in operating losses. In addition, PBS’s stock price declined 67% in the same period. Since the decline in PBS’s stock price from December 31, 2016 had been for less than three months, the Company determined that the decline in the fair value of the PBS investment was not considered permanent yet and as a result, the $0.5 million loss in the PBS investment in the first quarter of 2017 was recorded to Other comprehensive income. 

During the fourth quarter of 2017, the Company assessed the investment in PBS and determined that the decline in the fair value was other than temporary. As a result, the Company fully wrote off the carrying value of this investment and released the unrealized loss previously included in Accumulated Other Comprehensive Income (“AOCI”) to earnings as of December 31, 2017.

Unconsolidated Variable Interest Entities (“VIE”)

EDC

In 2014, the Company acquired an 18.4% interest in Encoding.com, Inc. (“EDC”), a video transcoding service company headquartered in San Francisco, California, for $3.5 million by purchasing EDC’s Series B preferred stock. EDC is considered a VIE but the Company determined that it is not the primary beneficiary of EDC. As a result, EDC is accounted for as a cost method investment.

The Company determined that there were no indicators existing at March 30, 2018 that would indicate that the EDC investment was impaired. The Company’s maximum exposure to loss from the EDC’s investment at March 30, 2018 was limited to its investment cost of $3.6 million, including $0.1 million of transaction costs.