Fair Value Measurements

6 Months Ended

Jun. 29, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The authoritative accounting guidance establishes a framework for measuring fair value and requires disclosure about the fair value measurements of assets and liabilities. 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. This guidance requires the Company to classify and disclose assets and liabilities measured at fair value on a recurring basis, as well as fair value measurements of assets and liabilities measured on a nonrecurring basis in periods subsequent to initial measurement, in a three-tier fair value hierarchy as described below.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The guidance describes three levels of inputs that may be used to measure fair value:

• Level 1 — Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

• Level 2 — Observable inputs other than Level 1 prices, 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. The forward exchange contracts are classified as Level 2 because they are valued using quoted market prices and other observable data for similar instruments in an active market.

• 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.

The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands):

	Level 1		Level 2		Level 3		Total
As of June 29, 2018
Cash equivalents
Money market funds	$	—	$	—	$	—	$	—
Derivative assets	—		14		—		14
Other long-term assets
Long-term investment	178		—		—		178
Total assets measured and recorded at fair value	$	178	$	14	$	—	$	192
Accrued and other current liabilities
Derivative liabilities	$	—	$	298	$	—	$	298
Total liabilities measured and recorded at fair value	$	—	$	298	$	—	$	298
	Level 1		Level 2		Level 3		Total
As of December 31, 2017
Cash equivalents
Money market funds	$	22	$	—	$	—	$	22
Prepaid expenses and other current assets
Derivative assets	—		33		—		33
Total assets measured and recorded at fair value	$	22	$	33	$	—	$	55
Accrued and other current liabilities
Derivative liabilities	$	—	$	4	$	—	$	4
Total liabilities measured and recorded at fair value	$	—	$	4	$	—	$	4

The Company’s liability for the TVN VDP (as defined below) was $3.4 million and $5.1 million as of June 29, 2018 and December 31, 2017, respectively. This amount is not included in the table above because its fair value at inception, based on Level 3 inputs, was determined during the fourth quarter of fiscal 2016. There has been no recurring fair value re-measurement for this liability subsequently based on the applicable accounting guidance. See Note 8, “Restructuring and related charges-TVN VDP,” for additional information on the Company’s TVN VDP liabilities.

The carrying value of the Company’s financial instruments, including cash equivalents, restricted cash, accounts receivable, accounts payable and accrued and other current liabilities, approximate fair value due to their short maturities.

The Company uses the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The fair value of the Company’s convertible notes is influenced by interest rates, the Company’s stock price and stock market volatility. The fair value of the Company’s convertible notes was approximately $133.6 million and $129.9 million as of June 29, 2018 and December 31, 2017, respectively, and represents a Level 2 valuation. The Company’s other debts assumed from the TVN acquisition are classified within Level 2 because these borrowings are not actively traded and the majority of them have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities, therefore, the carrying value of these debts approximate its fair value. The other debts, excluding capital leases, outstanding as of June 29, 2018 and December 31, 2017 were in the aggregate of $15.5 million and $21.8 million, respectively. (See Note 9, “Convertible Notes, Other debts and Capital Leases” for additional information).

During the six months endedJune 29, 2018, there were no nonrecurring fair value measurements of assets and liabilities subsequent to initial recognition.