Fair Value of Financial Instruments

9 Months Ended

Oct. 01, 2011

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company accounts for its assets utilizing a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy:

• Level 1—Quoted prices for identical instruments in active markets;

• Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

							Fair Value Measurements as of
	Carrying Amount		Total Fair Value				October 1, 2011
					Cash		Level 1		Level 2		Level 3
Measured on a recurring basis:
Assets:
Cash	$	22,579	$	22,579	$	22,579	$	—	$	—	$	—
Cash equivalents	91,101		91,101		—		50,930		40,171		—
Short-term—marketable securities	33,544		33,544		—		6,232		27,312		—
Non-qualified deferred compensation plan	3,281		3,281		—		3,281		—		—
Total	$	150,505	$	150,505	$	22,579	$	60,443	$	67,483	$	—
Liabilities:
Earnout payment liability	$	769	$	769	$	—	$	—	$	—	$	769
Non-qualified deferred compensation plan	3,281		3,281		—		3,281		—		—
Total	$	4,050	$	4,050	$	—	$	3,281	$	—	$	769
							Fair Value Measurements as of
	Carrying Amount		Total Fair Value				December 31, 2010
					Cash		Level 1		Level 2		Level 3
Measured on a recurring basis:
Assets:
Cash	$	72,422	$	72,422	$	72,422	$	—	$	—	$	—
Cash equivalents	120,042		120,042		—		120,042		—		—
Short-term—marketable securities	31,192		31,192		—		4,822		26,370		—
Non-qualified deferred compensation plan	2,971		2,971		—		2,971		—		—
Total	$	226,627	$	226,627	$	72,422	$	127,835	$	26,370	$	—
Liabilities:
Earnout payment liability	$	1,365	$	1,365	$	—	$	—	$	—	$	1,365
Non-qualified deferred compensation plan	2,971		2,971		—		2,971		—		—
Total	$	4,336	$	4,336	$	—	$	2,971	$	—	$	1,365

The instruments classified as Level 1 are measured at fair value using quoted market prices. The investments classified as Level 2 were valued using quoted prices for similar instruments in markets that are not active since identical instruments were not available. The Company determines the hierarchy levels at the end of each quarter.

The non-qualified deferred compensation plan provides eligible employees and members of the Board of Directors with the opportunity to defer a specified percentage of their cash compensation. The Company includes the asset deferred by the participants in the “Other noncurrent assets, net” line item of its consolidated balance sheets and the Company’s obligation to deliver the deferred compensation in the “Other long-term liabilities” line item on its consolidated balance sheets.

During the nine months ended October 1, 2011, the Company remeasured the fair value of the Level 3 earnout payment liability and revised its estimate due to the low probability of achieving the 2011 earnout target. The change in estimate resulted in a reduction in the liability of $681, which was recorded to selling, general and administrative expenses and is included in the statement of cash flows as "other" in the cash flows from operating activities. The Company used an income based method to measure the fair value of this liability.

The earnout payment liability resulted from the acquisition of TriAccess Technologies, Inc. ("TA") on September 3, 2009 and represents an initial obligation to pay up to $5,000 to the former TA shareholders over three years. Since acquisition, the initial obligation has been reduced to a remaining amount of up to $1,000.

Ending earnout payment liability at December 31, 2010	$	1,365
Accretion	85
Change in estimate	(681		)
Ending earnout payment liability at October 1, 2011	$	769