Fair Value Measurements and Fair Value of Financial Instruments

12 Months Ended

Dec. 28, 2013

Fair Value Measurements and Fair Value of Financial Instruments [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments

11. Fair Value Measurements and Fair Value of Financial Instruments

Fair value measurement is defined as the price that would be received to sell 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 at the measurement date. A fair value hierarchy is established, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

• Level 3—Unobservable inputs based on the Company's own assumptions.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:

	Fair Value as of December 28, 2013
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	17,090	$	–	$	–	$	17,090
Forward currency-exchange contracts	$	–	$	97	$	–	$	97
Banker's acceptance drafts (a)	$	–	$	10,765	$	–	$	10,765
Liabilities:
Forward currency-exchange contracts	$	–	$	23	$	–	$	23
Interest rate swap agreement	$	–	$	773	$	–	$	773

	Fair Value as of December 29, 2012
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	19,768	$	–	$	–	$	19,768
Forward currency-exchange contracts	$	–	$	29	$	–	$	29
Banker's acceptance drafts (a)	$	–	$	9,794	$	–	$	9,794
Liabilities:
Forward currency-exchange contracts	$	–	$	173	$	–	$	173
Interest rate swap agreements	$	–	$	1,048	$	–	$	1,048

(a) Included in accounts receivable in the accompanying consolidated balance sheet.

The Company uses the market approach technique to value its financial assets and liabilities, and there were no changes in valuation techniques during 2013. The Company's financial assets and liabilities carried at fair value comprise cash equivalents, banker's acceptance drafts, and derivative instruments used to hedge the Company's foreign currency and interest rate risks. The Company's cash equivalents include money market funds and bank deposits which are highly liquid and easily tradable. These investments are valued using inputs observable in active markets for identical securities. The carrying value of banker's acceptance drafts approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the Company's interest rate swap agreements are based on LIBOR yield curves at the reporting date. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The forward currency-exchange contracts and interest rate swap agreements are hedges of either recorded assets or liabilities or anticipated transactions. Changes in values of the underlying hedged assets and liabilities or anticipated transactions are not reflected in the table above.

The carrying amount and fair value of the Company's debt obligations are as follows:

	2013						2012
(In thousands)	Carrying Value			Fair Value			Carrying Value			Fair Value
Long-term debt obligations		$	38,010		$	38,010		$	6,250		$	6,250

The carrying amounts of long-term debt obligations approximate fair value as the obligations bear variable rates of interest, which adjust quarterly based on prevailing market rates.