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Commitments And Contingencies
 6 Months Ended
Jun. 29, 2012
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

 

Litigation – The Company is a party to various legal actions arising in the normal course of business. While the Company does not believe that the ultimate resolution of any such pending actions will have a material effect on its results of operations, financial position, or cash flows, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material impact in the period in which the ruling occurs.

 

Product Warranties – The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The change in aggregate product warranty liability is as follows (in thousands):

 

 AtDecember 30, 2011$2,013
 Additions to warranty reserve 467
 Warranty claims paid (915)
 Foreign currency effect (3)
 AtJune 29, 2012$1,562

Purchase Commitments – Contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding on the Company and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The Company's purchase orders are normally based on current manufacturing needs and are fulfilled by vendors within short time horizons. The Company enters into blanket orders with vendors that have preferred pricing and terms, however these orders are normally cancelable by us without penalty. As of June 29, 2012, the total contractual obligation related to such expenditures is approximately $32.3 million and will primarily be funded by existing cash and cash equivalents, cash flow from operations, or the Credit Facility. The Company also enters into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty.

 

Operating Leases – The Company is a party to various operating lease agreements for buildings, equipment and software. Estimated future operating lease expense is as follows (in thousands):

 Remainder of2012$ 2,054
 2013  3,722
 2014  3,802
 2015  3,447
 2016  2,996
 Thereafter  2,895
 Total estimated operating lease expense$ 18,916

Foreign Currency Contracts - The Company enters into forward contracts to purchase Mexican pesos in order to hedge the risk of peso-denominated payments associated with the operations at its Tijuana, Mexico facility. The impact to the Company's results of operations from these forward contracts was as follows (in thousands):

  Three Months Ended Six Months Ended
   June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Reduction in Cost of Sales$(97) $(173) $(19) $(316)
 Ineffective portion of change in fair value 0  0  0  0

Instrument Type of Hedge  Aggregate Notional Amount Start Date End Date Pesos/$ Fair Value Balance Sheet Location
FX Contract Cash flow $ 3,000 Jan-12 Dec-12 13.0354$(96) Current Liabilities
FX Contract Cash flow   2,100 Jan-12 Dec-12 14.0287 87 Current Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 13.7462 (10) Current Assets/ Other Assets
FX Contract Cash flow   6,000 Jan-13 Dec-13 14.4395 289 Current Assets/ Other Assets

Self-Insured Medical Plan – The Company self-funds the medical insurance coverage provided to its U.S. based employees. The risk to the Company is being limited through the use of stop loss insurance, which has an annual maximum aggregate loss of $13.5 million with a maximum benefit of $1.0 million. As of June 29, 2012, the Company has $1.7 million accrued related to the self-insurance of its medical plan, which is recorded in Accrued Expenses in the Condensed Consolidated Balance Sheet, and is primarily based upon claim history.