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Fair Value Measurements
 9 Months Ended
Sep. 27, 2014
Fair Value Disclosures [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 September 27, 2014
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Money market funds and time deposits
 
$
5,079

 
$
—

 
$
—

 
$
5,079

Banker's acceptance drafts (a)
 
$
—

 
$
9,988

 
$
—

 
$
9,988

Forward currency-exchange contracts
 
$
—

 
$
169

 
$
—

 
$
169

 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 

 
 

 
 

Forward currency-exchange contracts
 
$
—

 
$
2

 
$
—

 
$
2

Interest rate swap agreement
 
$
—

 
$
532

 
$
—

 
$
532

Contingent consideration (b)
 
$
—

 
$
—

 
$
1,175

 
$
1,175




 
 
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 nine months 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. Changes to the fair value of contingent consideration are recorded in selling, general and administrative expense.

The following table provides a rollforward of the fair value, as determined by Level 3 inputs, of the contingent consideration:
 
 
Nine Months Ended 
 September 27, 2014
(In thousands)
 
Balance at beginning of period
 
$
—

Acquisition
 
1,205

Current period expense
 
60

Currency translation
 
(90
)
Balance at end of period
 
$
1,175




The carrying value and fair value of the Company's long-term debt obligations are as follows:
 
 
September 27, 2014
 
December 28, 2013
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt obligations
 
$
22,375

 
$
22,375

 
$
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.