Investments in Equity Securities

9 Months Ended

Sep. 28, 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 Company does not have significant influence over PBS’s operational and financial policies. The carrying value of the investment in PBS was fully written off as of December 31, 2017.

Beginning the first quarter of fiscal 2018, the Company adopted ASU No. 2016-01, Financial Instruments (Topic 825): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires equity investments to be measured at fair value with changes in fair value recognized in net income. As a result of adopting this new standard, the Company started measuring the investment in PBS at fair value based on its quoted stock price on the AIM exchange with gains or losses from changes in fair value recognized in net income. The Company sold this investment for $0.1 million in the third quarter of fiscal 2018.

The Company recorded a loss of $0.1 million and a gain of $0.1 million related to this investment in Other expense, net during the three and nine months ended September 28, 2018.

Unconsolidated Variable Interest Entities (“VIE”)

EDC

In 2014, the Company acquired an 18.4% interest in Encoding.com, Inc. (“EDC”), a privately held 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 measured at its cost minus impairment, if any. The Company determined that there were no indicators at September 28, 2018 that the EDC investment was impaired.