Note 10 - Fair Value Measurement

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

10. FAIR VALUE MEASUREMENT

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

	Fair Value Measurement at March 31, 2015
			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	$	46,965	$	46,965	$	-	$	-
Certificates of deposit		23,050		-		23,050		-
U.S. treasuries and government agency bonds		114,741		-		114,741		-
Auction-rate securities backed by student-loan notes		5,394		-		-		5,394
Mutual funds under deferred compensation plan		4,490		4,490		-		-
Total	$	194,640	$	51,455	$	137,791	$	5,394
Liabilities:
Contingent consideration	$	2,507	$	-	$	-	$	2,507
Total	$	2,507	$	-	$	-	$	2,507

	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

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, 2015	$	5,389
Change in unrealized loss included in other comprehensive income		5
Ending balance at March 31, 2015	$	5,394

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

	March 31,		December 31,
	2015		2014
Time-to-liquidity (months)		24		24
Expected return		2.5%		2.9%
Discount rate		3.6% - 6.6%		4.0% - 7.0%

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 Sensima’s former 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 changes in the fair value of the contingent consideration for the three months ended March 31, 2015.