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Derivative Instruments | 3 Months Ended
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Mar. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company currently mitigates certain foreign currency exchange rate risks with derivative instruments. The Company does not currently manage its interest rate risk with derivative instruments. The Company faces exposure to foreign currency exchange rate fluctuations, as a significant portion of its revenues, expenses, assets, and liabilities are denominated in currencies other than the functional currencies of the Company’s subsidiaries or the reporting currency of the Company, which is the U.S. Dollar. The Company faces two types of foreign currency exchange rate exposures:
• | Transactional currency/functional currency exchange rate exposures from transactions that are denominated in currencies other than the functional currency of the subsidiary. These transaction gains and losses are reported in "Foreign currency gain (loss)" on the Consolidated Statements of Operations.
• | Functional currency/reporting currency exchange rate exposures from the revaluation of the assets and liabilities of our foreign subsidiaries, whose functional currency is generally their local currency, to the Company’s reporting currency, which is the U.S. Dollar. These translation gains and losses are reported in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets and also on the Consolidated Statements of Comprehensive Income.
The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. Currently, the Company enters into two types of hedges to manage this risk. The first are economic hedges which utilize foreign currency forward contracts with maturities of up to 45 days to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are largely offset by changes in the fair value of the assets and liabilities being hedged. The second are cash flow hedges which utilize foreign currency forward contracts with maturities of up to 18 months to hedge specific forecasted transactions of the Company's foreign subsidiaries with the goal of protecting our budgeted revenues and expenses against foreign currency exchange rate changes compared to our budgeted rates. The Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk (in thousands):
| As of March 30, 2014 |  | As of December 31, 2013
Currency | Notional Value |  | USD Equivalent |  | Notional Value |  | USD Equivalent
Derivatives Designated as Hedging Instruments: |  |  |  |  |  |  |
Japanese Yen | 665,000 |  |  | $ | 6,514 |  |  | 625,000 |  |  | $ | 6,122 |
Hungarian Forint | 639,750 |  |  | 2,872 |  |  | 570,175 |  |  | 2,603 |
Singapore Dollar | 3,049 |  |  | 2,472 |  |  | 2,867 |  |  | 2,346 |
British Pound | 673 |  |  | 1,112 |  |  | 613 |  |  | 1,010 |
Canadian Dollar | 1,199 |  |  | 1,107 |  |  | 985 |  |  | 932 |
Derivatives Not Designated as Hedging Instruments: |  |  |  |
Euro | — |  |  | $ | — |  |  | 2,828 |  |  | $ | 3,887 |
Japanese Yen | — |  |  | — |  |  | 294,500 |  |  | 2,797 |
British Pound | — |  |  | — |  |  | 1,100 |  |  | 1,820 |
Chinese Renminbi | — |  |  | — |  |  | 9,000 |  |  | 1,467 |
Taiwanese Dollar | — |  |  | — |  |  | 27,000 |  |  | 908 |
Korean Won | — |  |  | — |  |  | 650,000 |  |  | 620 |
Hungarian Forint | — |  |  | — |  |  | 123,000 |  |  | 568 |
Brazilian Real | — |  |  | — |  |  | 250 |  |  | 106 |
Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):
| Asset Derivatives |  | Liability Derivatives
| Balance |  | Fair Value |  | Balance |  | Fair Value
| Sheet Location |  | March 30, 2014 |  | December 31, 2013 |  | Sheet Location |  | March 30, 2014 |  | December 31, 2013
Derivatives Designated as Hedging Instruments: |  |  |  |  |  |  |  |
Cash flow hedge forward contracts | Prepaid expenses and other current assets |  | $ | 33 |  |  | $ | 204 |  |  | Accrued expenses |  | $ | 112 |  |  | $ | 98 |
Derivatives Not Designated as Hedging Instruments: |  |  |  |  |  |  |  |
Economic hedge forward contracts | Prepaid expenses and other current assets |  | $ | — |  |  | $ | 6 |  |  | Accrued expenses |  | $ | — |  |  | $ | 24 |
The table below details the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with one counterparty (in thousands):
Asset Derivatives |  | Liability Derivatives
|  | March 30, 2014 |  | December 31, 2013 |  |  |  | March 30, 2014 |  | December 31, 2013
Gross amounts of recognized assets |  | $ | 38 |  |  | $ | 210 |  |  | Gross amounts of recognized liabilities |  | $ | 128 |  |  | $ | 122 |
Gross amounts offset |  | (5 | ) |  | — |  |  | Gross amounts offset |  | (16 | ) |  | — |
Net amount of assets presented |  | 33 |  |  | 210 |  |  | Net amount of liabilities presented |  | 112 |  |  | 122 |
Information regarding the effect of derivative instruments, net of the underlying exposure, on the consolidated financial statements was as follows (in thousands):
| Location in Financial Statements |  | Three-months Ended
|  | March 30, 2014 |  | March 31, 2013
Derivatives Designated as Hedging Instruments: |  |  |  |
Gains (losses) in Shareholders' equity on derivatives (effective portion) | Accumulated other comprehensive income (loss), net of tax |  | $ | (62 | ) |  | $ | — |
Gains (losses) reclassified from accumulated other comprehensive income (loss) into net income (effective portion) | Product revenue |  | $ | 13 |  |  | $ | — |
| Research, development, and engineering expenses |  | (30 | ) |  | — |
| Selling, general, and administrative expenses |  | (16 | ) |  | — |
| Total gains (losses) reclassified from accumulated other comprehensive income (loss) into net income |  | $ | (33 | ) |  | $ | — |
Gains (losses) recognized in net income on derivatives (ineffective portion and discontinued derivatives) | Foreign currency gain (loss) |  | $ | — |  |  | $ | — |
Derivatives Not Designated as Hedging Instruments: |  |  |  |
Gains (losses) recognized in net income | Foreign currency gain (loss) |  | $ | (152 | ) |  | $ | 203 |
The following table provides the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):
| Three-months ended
| March 30, 2014 |  | March 31, 2013
Beginning balance | $ | 104 |  |  | $ | — |
Amount of loss (gain) reclassified to net income | 33 |  |  | — |
Change in fair value of derivative instruments | (199 | ) |  | — |
Ending balance | $ | (62 | ) |  | $ | — |
Net losses expected to be reclassified from accumulated other comprehensive income (loss), net of tax, into net income within the next twelve months are $66,000.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624177-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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