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Note 4 - Fair Value Measurement

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

4. FAIR VALUE MEASUREMENT

The following table details the fair value measurement of the financial assets and liabilities (in thousands):

		Fair Value Measurement at December 31, 2014
						Quoted Prices in Active Markets for Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs
		Total				Level 1				Level 2				Level 3
Assets:
Money market funds		$	60,078			$	60,078			$	-			$	-
Certificates of deposit			22,778				-				22,778				-
U.S. treasuries and government agency bonds			89,674				-				89,674				-
Auction-rate securities backed by student-loan notes			5,389				-				-				5,389
Mutual funds under deferred compensation plan			2,236				2,236				-				-
Total		$	180,155			$	62,314			$	112,452			$	5,389

Liabilities:
Contingent consideration		$	2,507			$	-			$	-			$	2,507
Total		$	2,507			$	-			$	-			$	2,507

		Fair Value Measurement at December 31, 2013
						Quoted Prices in Active Markets for Identical Assets				Significant Other Observable Inputs				Significant Unobservable Inputs
		Total				Level 1				Level 2				Level 3
Assets:
Money market funds		$	35,588			$	35,588			$	-			$	-
U.S. treasuries and government agency bonds			128,126				-				128,126				-
Auction-rate securities backed by student-loan notes			9,860				-				-				9,860
Total		$	173,574			$	35,588			$	128,126			$	9,860

The Company’s level 3 assets consist of government-backed student loan auction-rate securities, with interest rates that reset through a Dutch auction every 7 to 35 days and which became illiquid in 2008. The following table provides a rollforward of the fair value of the auction-rate securities (in thousands):

Balance at January 1, 2013		$	11,755
Sales and settlement at par			(2,025	)
Change in unrealized loss included in other comprehensive income			130
Ending balance at December 31, 2013			9,860
Sales and settlement at par			(4,650	)
Change in unrealized loss included in other comprehensive income			179
Ending balance at December 31, 2014		$	5,389

The Company determined the fair value of the auction-rate securities using a discounted cash flow model with the following assumptions:

		As of December 31,
		2014				2013
Time-to-liquidity (months)			24				24
Expected return			2.9%				2.5%
Discount rate			4.0% - 7.0%				3.3% - 8.1%

The Company’s level 3 liabilities consist of the contingent consideration related to the acquisition of Sensima in July 2014. The arrangement requires the Company to pay up to $8.9 million to certain former Sensima shareholders if Sensima achieves a new product introduction as well as certain product revenue and direct margin targets in 2016. The fair value of the contingent consideration at the Acquisition Date was $2.5 million, which was estimated based on a probability-weighted analysis of possible future cash flow outcomes. There were no significant changes in the fair value of the contingent consideration from the Acquisition Date to December 31, 2014. The fair value is calculated using the following assumptions:

		As of December 31,
		2014
Project revenue in 2016 (in millions)			$2.1 - $3.8
Discount rate			9.0%
Probability of occurrence			20% - 50%

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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