Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Factors used in determining the fair value of financial assets and liabilities are summarized into three broad categories:

• Level 1 - observable inputs such as quoted prices (unadjusted) in active liquid markets for identical securities as of the reporting date;

• Level 2 - other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; or observable market prices in markets with insufficient volume and/or infrequent transactions; and

• Level 3 - significant inputs that are generally unobservable inputs for which there is little or no market data available, including our own assumptions in determining fair value.

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 were as follows (in thousands):

	March 31, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents
Money market funds	$	256	$	—	$	—	$	256
Total cash equivalents	256		—		—		256
Available-for-Sale Securities
Corporate bonds	—		5,046		—		5,046
U.S. government bonds	—		7,537		—		7,537
Total available-for-sale securities	—		12,583		—		12,583
Derivatives
Interest rate swap contract	—		230		—		230
Foreign currency forward contracts	—		116		—		116
Total derivatives	—		346		—		346
Total assets measured at fair value	$	256	$	12,929	$	—	$	13,185

	December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Cash Equivalents
Money market funds	$	7,646	$	—	$	—	$	7,646
Total cash equivalents	7,646		—		—		7,646
Available-for-Sale Securities
Certificates of deposit(1)	—		10,379		—		10,379
Corporate bonds	—		7,522		—		7,522
U.S. government bonds	—		7,491		—		7,491
Total available-for-sale securities	—		25,392		—		25,392
Derivatives
Interest rate swap contract	—		363		—		363
Foreign currency forward contracts	—		240		—		240
Total derivatives	—		603		—		603
Total assets measured at fair value	$	7,646	$	25,995	$	—	$	33,641

⁽¹⁾ All certificates of deposit are within current FDIC insurance limits.

We did not have any liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018.

For our assets measured at fair value on a recurring basis, we recognize transfers between levels at the actual date of the event or change in circumstance that caused the transfer. There were no transfers between levels during the three months ended March 31, 2019, nor for the year ended December 31, 2018.

We did not have any changes to our valuation techniques during the three months ended March 31, 2019, nor for the year ended December 31, 2018.

We classify our marketable securities as available-for-sale and, accordingly, record them at fair value. Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from inputs, other than quoted market prices in active markets for identical assets, that are directly or indirectly observable in the marketplace and quoted prices in markets with limited volume or infrequent transactions. The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Unrealized holding gains and losses are excluded from earnings and are reported net of tax in comprehensive income until realized.

The fair values of our interest rate swap contract and our foreign currency forward contracts are calculated as the present value of estimated future cash flows using discount factors derived from relevant Level 2 market inputs, including forward curves and volatility levels.

We recognize or disclose the fair value of certain assets, such as non-financial assets, primarily property, plant and equipment, goodwill, other intangible assets and certain other long-lived assets in connection with impairment evaluations. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy. We did not perform any valuations on assets or liabilities that are valued at fair value on a nonrecurring basis during the first three months of 2019. During the fourth quarter of 2018, we performed our annual goodwill and indefinite-lived trade names impairment analyses effective as of October 1, 2018. During the three months ended March 31, 2019 or the year ended December 31, 2018, we did not record any other-than-temporary impairments on our financial assets required to be measured at fair value on a nonrecurring basis.

The carrying values of cash and cash equivalents, trade receivables, prepaids and other current assets, trade payables and accrued liabilities approximate fair value due to their short maturities. The carrying value of our term loan approximates its fair value and falls under Level 2 of the fair value hierarchy, as the interest rate is variable and based on current market rates.