Derivative Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

NOTE 10: Derivative Instruments

The Company is exposed to certain risks relating to its ongoing business operations including foreign currency exchange rate risk and interest rate risk. The Company currently mitigates certain foreign currency exchange rate risks with derivative instruments. The Company does not currently manage its interest rate risk with derivative instruments.

The Company faces exposure to foreign currency exchange rate fluctuations, as a significant portion of its revenues, expenses, assets, and liabilities are denominated in currencies other than the functional currencies of the Company’s subsidiaries or the reporting currency of the Company, which is the U.S. Dollar. The Company faces two types of foreign currency exchange rate exposures:

• Transactional currency/functional currency exchange rate exposures from transactions that are denominated in currencies other than the functional currency of the subsidiary. These transactions gains and losses are reported on the Consolidated Statements of Operations as a component of “Foreign Currency Gain (Loss),”

• Functional currency/reporting currency exchange rate exposures from the revaluation of the assets and liabilities of our foreign subsidiaries, whose functional currency is generally their local currency, to the Company’s reporting currency, which is the U.S. Dollar. The net effect of these translation gains and losses are reported in “Accumulated Other Comprehensive Loss” on the Consolidated Balance Sheets, and also on the Consolidated Statements of Comprehensive Income.

The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. Derivative instruments, specifically foreign currency forward contracts with maturities of up to three months, are used to manage the exposure to fluctuations in foreign currency exchange rates that arise primarily from foreign-denominated receivables and payables. As of June 30, 2013, the Company’s forward contracts do not qualify for effective hedge accounting. Because forward contracts are used as an economic hedge, any gain or loss on the underlying foreign-denominated balance is intended to be offset by the loss or gain on the forward contract. Gains and losses on forward contracts and foreign-denominated receivables and payables are included in “Foreign Currency Gain (Loss)” on the Consolidated Statements of Operations. The Company recorded net foreign currency gains of $76,000 and $139,000 in the three-month and six-month periods ended June 30, 2013, respectively, and net foreign currency losses of $30,000 and $668,000 in the three-month and six-month periods ended July 1, 2012, respectively.

As of June 30, 2013, the Company had the following outstanding forward contracts that were entered into to mitigate foreign currency exchange rate risk (in thousands):

Currency	Notional Value		USD Equivalent
Japanese Yen		316,600	$	3,214
Korean Won		275,000		240
Hungarian Forint		99,500		436
Taiwanese Dollar		27,500		920
Swedish Krona		5,700		848
Singapore Dollar		2,500		1,968
British Pound		425		654

Information regarding the fair value of the forward contracts outstanding as of June 30, 2013 and December 31, 2012 was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
		Fair Value					Fair Value
	Balance Sheet Location	June 30, 2013		December 31, 2012		Balance Sheet Location	June 30, 2013		December 31, 2012
Foreign currency forward contracts	Prepaid expenses and other current assets	$	61	$	44	Accrued expenses	$	11	$	14

Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations for the three-month and six-month periods ended June 30, 2013 and July 1, 2012 was as follows (in thousands):

		Amount of Gain Recognized					Amount of Gain  (Loss) Recognized
		Three-months ended					Six-months ended
	Location of Gain Recognized	June 30, 2013		July 1, 2012		Location of Gain (Loss) Recognized	June 30, 2013		July 1, 2012
Foreign currency forward contracts	Foreign currency gain	$	64	$	198	Foreign currency gain (loss)	$	197	$	(91	)