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Note 11 - Financial Instruments
 12 Months Ended
Dec. 31, 2014
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block]

11. Financial Instruments


Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The multiple assumptions used to value financial instruments are referred to as inputs, and a hierarchy for inputs used in measuring fair value is established, that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. These inputs are ranked according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.


Level 1 -

Inputs are quoted prices in active markets for identical assets or liabilities.


Level 2 -

Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.


Level 3 -

Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.


The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2014 and the basis for that measurement (in thousands):


Assets

 

Total

   

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

   

Significant Other

Observable Inputs

(Level 2)

   

Significant

Unobservable Inputs

(Level 3)

 

Money market mutual funds

  $ 26,356     $ 26,356     $ —     $ —  

The following table represents the Company’s assets measured at fair value on a recurring basis as of December 31, 2013 and the basis for that measurement (in thousands):


Assets

 

Total

   

Quoted Prices in

Active Markets for

Identical Assets

(Level 1)

   

Significant Other

Observable Inputs

(Level 2)

   

Significant

Unobservable Inputs

(Level 3)

 

Money market mutual funds

  $ 26,353     $ 26,353     $ —     $ —  

The Company enters into foreign currency forward contracts to reduce the exposure to foreign currency exchange rate fluctuations on certain foreign currency denominated monetary assets and liabilities, primarily on third-party accounts payables and intercompany balances. The primary objective of the Company’s hedging program is to reduce volatility of earnings related to foreign currency exchange rate fluctuations. The counterparty to these foreign currency forward contracts is a large global financial institution that the Company believes is creditworthy, and therefore, the Company believes the credit risk of counterparty nonperformance is not significant. These foreign currency forward contracts are not designated for hedge accounting treatment. Therefore, the change in fair value of these contracts is recorded into earnings as a component of other income (expense), net, and offsets the change in fair value of the foreign currency denominated assets and liabilities, which is also recorded in other income (expense), net. For the year ended December 31, 2014 and 2013, the Company recognized a realized (loss) gain of ($0.9) million and $0.1 million, respectively on the contracts, which is recorded in other income (expense), net in the Company’s Statement of Operations.


The Company carries these derivatives financial instruments on its Consolidated Balance Sheets at their fair values. The Company’s foreign currency forward contracts are classified as Level 2 because it is not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments. As of December 31, 2014, the Company had one outstanding forward contract with a notional amount of $6.7 million and recorded $50,000 other current liabilities associated with this outstanding forward contract.