Debt And Lease Obligations

12 Months Ended

Dec. 30, 2011

Debt And Lease Obligations [Abstract]

Debt And Lease Obligations

4. Debt and Lease Obligations

The Company has borrowing arrangements with its banking facility which includes a $25.0 million revolving credit facility and two term loans. The aggregate amount of the revolving credit facility, which matures on December 31, 2013, is subject to a borrowing base equal to 80% of eligible accounts receivable and 45% of eligible inventory (total eligible inventory not to exceed $3.0 million) and is secured by substantially all of the Company's assets. The revolving credit facility bears interest per annum at a variable rate equal to the greater of prime rate, as defined in the loan agreement, plus a margin of 25 basis points. During the third quarter ended September 30, 2011, the interest rate on the revolving credit facility decreased to 3.5% from 4.25%, which was the interest rate during the first six months of 2011. The interest rate at December 30, 2011, on the revolving credit facility was 3.5%. The revolving credit facility contains certain reporting and financial covenants that must be met on a quarterly basis in order for the Company to remain in compliance. The Company was in compliance with all of its bank covenants as of December 30, 2011. The revolving credit facility balance as of December 30, 2011 was $19.5 million.

As of December 30, 2011, the Company had two term loans with its banking facility, one for $3.0 million which matured on January 29, 2012 and one for $8.0 million which matures on October 21, 2013. The term loans bear interest per annum at a variable rate equal to the greater of prime rate, as defined per the loan agreement, plus a margin of 75 basis points. During the third quarter ended September 30, 2011, the interest rate on the outstanding term loans decreased to 4.0% from 4.75%, the interest rate during the first six months of 2011. The interest rate at December 30, 2011, on the term loans was 4.00%. The combined balance of the term loans as of December 30, 2011 was $5.3 million.

The Company also had a $5.0 million equipment loan that was paid in full in May 2011. The interest rate and outstanding balance on the equipment loan was 7.6% and $0.4 million, respectively, as of December 31, 2010.

Total debt outstanding as of December 30, 2011, was $24.7 million.

The Company leases certain equipment under capital lease arrangements. In addition, the Company leases its corporate and regional offices as well as some of its office equipment under non-cancelable operating leases. The Company has a renewal option for its leased facilities in South San Francisco, California; Hayward, California; Austin, Texas; and Shanghai, China.

The following table summarizes the Company's future minimum lease payments and principal payments under debt obligations as of December 30, 2011 (in thousands):

	2012		2013		2014		2015		2016		Thereafter		Total
Capital lease	$	10	$	10	$	7	$	—	$	—	$	—	$	27
Operating lease(1)		4,103		3,675		3,060		1,275		321		—		12,434
Borrowing arrangements		2,931		21,802		—		—		—		—		24,733
Total	$	7,044	$	25,487	$	3,067	$	1,275	$	321	$	—	$	37,194

(1) Operating lease expense reflects (a) the lease for our headquarters facility in Hayward, California that expires in 2015; (b) the leases for manufacturing facilities in South San Francisco that expire in 2012 thru 2013; (c) the leases for manufacturing facilities in China and Singapore that expire in 2012 thru 2014 and; (d) the leases for manufacturing facilities in Austin, Texas that expire in 2016. We have options to renew certain of the leases in South San Francisco, Hayward and Austin which we expect to exercise.

The cost of equipment under the capital leases included in property and equipment at December 30, 2011 and December 31, 2010, was approximately $0.1 million and $0.1 million, respectively. Net book value of leased equipment at December 30, 2011 and December 31, 2010 was approximately $26,000 and $36,000, respectively.

Rental expense for fiscal years 2011, 2010 and 2009 was approximately $3.5 million, $3.5 million and $3.7 million, respectively. Included within deferred rent and other liabilities in 2011 and 2010 were $2.3 million and $3.2 million of deferred rent, respectively.