Fair Value Measurements

3 Months Ended

Mar. 29, 2014

Fair Value Measurements [Abstract]

Fair Value Measurements

11. Fair Value Measurements

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 the 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 March 29, 2014
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds and time deposits	$	15,665	$	–	$	–	$	15,665
Banker's acceptance drafts (a)	$	–	$	6,947	$	–	$	6,947
Forward currency-exchange contracts	$	–	$	44	$	–	$	44
Liabilities:
Forward currency-exchange contracts	$	–	$	8	$	–	$	8
Interest rate swap agreement	$	–	$	690	$	–	$	690
Contingent consideration (b)	$	–	$	–	$	1,377	$	1,377

	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
Banker's acceptance drafts (a)	$	–	$	10,765	$	–	$	10,765
Forward currency-exchange contracts	$	–	$	97	$	–	$	97
Liabilities:
Forward currency-exchange contracts	$	–	$	23	$	–	$	23
Interest rate swap agreement	$	–	$	773	$	–	$	773

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

(b) Included in other current liabilities in the accompanying condensed 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 the first quarter of 2014. The Company's financial assets and liabilities carried at fair value include cash equivalents and derivative instruments used to hedge the Company's foreign currency and interest rate risks. The Company's cash equivalents are comprised of money market funds and bank deposits that are highly liquid and easily tradable. These investments are valued using inputs observable in active markets for identical securities. The carrying value of the banker's acceptance drafts approximates their fair value due to their short-term nature. The fair values of the Company's interest rate swap agreement 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 agreement 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 Company recorded contingent consideration as part of its acquisition of a European manufacturer on December 30, 2013. The fair value of the contingent consideration is based on the present value of the estimated future cash flows.

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

	March 29, 2014				December 28, 2013
	Carrying		Fair		Carrying		Fair
(In thousands)	Value		Value		Value		Value
Long-term debt obligations	$	42,290	$	42,290	$	38,010	$	38,010

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