XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Fair Value Measurements and Fair Value of Financial Instruments
 9 Months Ended
Sep. 29, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Fair Value of Financial Instruments
Fair Value Measurements and Fair Value of Financial Instruments

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 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:
(In thousands)
 
Level 1
 
Level 2
 
Level 3
 
Total
September 29, 2018
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Money market funds and time deposits
 
$
4,344

 
$
—

 
$
—

 
$
4,344

2015 Swap Agreement
 
$
—

 
$
202

 
$
—

 
$
202

Banker's acceptance drafts (a)
 
$
—

 
$
14,193

 
$
—

 
$
14,193

Forward currency-exchange contract
 
$
—

 
$
32

 
$
—

 
$
32

 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 

 
 

 
 

Forward currency-exchange contracts
 
$
—

 
$
48

 
$
—

 
$
48

2018 Swap Agreement
 
$
—

 
$
87

 
$
—

 
$
87


December 30, 2017
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Money market funds and time deposits
 
$
17,728

 
$
—

 
$
—

 
$
17,728

Forward currency-exchange contracts
 
$
—

 
$
17

 
$
—

 
$
17

2015 Swap Agreement
 
$
—

 
$
126

 
$
—

 
$
126

Banker's acceptance drafts (a)
 
$
—

 
$
15,960

 
$
—

 
$
15,960

 
 
 
 
 
 
 
 
 
Liabilities:
 
 

 
 

 
 

 
 

Forward currency-exchange contracts
 
$
—

 
$
16

 
$
—

 
$
16


(a)
Included in accounts receivable 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 2018. The Company's financial assets and liabilities carried at fair value are cash equivalents, banker's acceptance drafts, derivative instruments used to hedge the Company's foreign currency and interest rate risks, variable rate debt, and capital lease obligations. The Company's cash equivalents are comprised of money market funds and bank deposits which are highly liquid and readily tradable. These cash equivalents are valued using inputs observable in active markets for identical securities. The carrying value of banker's acceptance drafts approximates their fair value due to the short-term nature of the negotiable instrument. The fair values of the Company's forward currency-exchange contracts are based on quoted forward foreign exchange rates at the reporting date. The fair values of the Company's interest rate swap agreements are based on LIBOR yield curves at the reporting date. The forward currency-exchange contracts and interest rate swap agreements 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 carrying value and fair value of the Company's debt obligations are as follows:
 
 
September 29, 2018
 
December 30, 2017
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
(In thousands)
 
 
 
 
Debt Obligations:
 
 
 
 
 
 
 
 
Revolving credit facility
 
$
168,468

 
$
168,468

 
$
237,011

 
$
237,011

Commercial real estate loan
 
20,584

 
20,288

 
—

 
—

Capital lease obligations
 
4,277

 
4,277

 
4,633

 
4,633

Other borrowings
 
286

 
286

 
436

 
436

 
 
$
193,615

 
$
193,319

 
$
242,080

 
$
242,080



The carrying value of the Company's revolving credit facility approximates the fair value as the obligation bears variable rates of interest, which adjust quarterly based on prevailing market rates. The fair value of the commercial real estate loan was calculated based on a quoted market rate, plus an applicable margin available to the Company at the end of the quarter, which represents a Level 2 measurement. The carrying values of the Company's capital lease obligations and other borrowings approximate fair value as the stipulated interest rates are comparable to prevailing market rates for those obligations.