Fair Value Measurements (Tables)

9 Months Ended

Sep. 27, 2014

Financial Assets and Liabilities Measured and Recognized at Fair Value on a Recurring Basis

As of September 27, 2014 and December 28, 2013, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows:

	September 27, 2014							December 28, 2013
	Fair Value Measurements							Fair Value Measurements
(in thousands)	Level 1		Level 2	Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	11,846	—		—	$	11,846	$	12,742		—		—	$	12,742
Liabilities:
Earn-out liability		—	—	$	566	$	566	$	—		—	$	624	$	624

Quantitative Information about the Inputs and Valuation Methodologies Used for Fair Value Measurements

The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy as of September 27, 2014.

As of September 27, 2014		Fair Value (in thousands)	Valuation Technique	Significant Unobservable Input	Weighted Average (range)
Earn-out liability	$	566	Discounted cash flow	Projected royalties (in thousands)	$1,474 ($414 - $1,715)
				Discount rate	21.71% (20.50% - 27.00%)

Reconciliation of Changes in Earn-Out (Level 3 Liabilities)

A reconciliation of the changes in the Company’s earn-out liability (Level 3 liability) for the nine months ended September 27, 2014 and September 28, 2013 is as follows:

	Nine Months Ended
(in thousands)	September 27, 2014			September 28, 2013
Balance at the beginning of the period	$	624		$	652
Payments against earn-out		(361	)		(287	)
Change in fair value of earn-out liability		303			181
Balance at the end of the period	$	566		$	546

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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