Note 10 - Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

10. FAIR VALUE MEASUREMENTS  

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

	Fair Value Measurement at September 30, 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	$	31,135	$	31,135	$	-	$	-
Certificates of deposit		22,008		-		22,008		-
U.S. treasuries and government agency bonds		131,039		-		131,039		-
Auction-rate securities backed by student-loan notes		5,364		-		-		5,364
Mutual funds under deferred compensation plan		3,502		3,502		-		-
Total	$	193,048	$	34,637	$	153,047	$	5,364
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		(25	)
Ending balance at September 30, 2015	$	5,364

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

	September 30,			December 31,
	2015			2014
Time-to-liquidity (months)		24			24
Expected return		2.5%			2.9%
Discount rate	3.9%	-	6.9%	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. Based on management’s assessment, there were no changes in the fair value of the contingent consideration for the three and nine months ended September 30, 2015.