Note 7 - Fair Value of Assets and Liabilities

12 Months Ended

Dec. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

7

. Fair Value of Assets and Liabilities

For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a

three

-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. Observable inputs are developed based on market data obtained from independent sources, while unobservable inputs reflect

the Company’s assumptions about valuation based on the best information available in the circumstances. Depending on the inputs, the Company classifies each fair value measurement as follows

:

Level

1

—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level

2

—Valuations based upon quoted prices for similar instruments, prices for identical or similar instruments in markets that are

not

active, or model-derived valuations, all of whose significant inputs are observable, and

Level

3

—

Valuations

based upon

one

or more significant unobservable inputs.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Investments

Investments in equity securities listed on a national market or exchange are valued at the last sales price

and classified within Level

1

of the valuation hierarchy. Such securities are further detailed in Note

1,

Summary of Significant Accounting Policies and Other Information

.

Defined Benefit Plan Assets / Non-qualified Supplemental Retirement and Savings Plan

Investments

See

Note

8,

Benefit Plans

for description of valuation methodologies and investment balances for defined benefit plan assets and investments related to the Company’s Non-Qualified Supplemental Retirement and Savings Plan.

The following table presents assets measured at fair value by classification within the fair value hierarchy

as of

December 30, 2017:

	Fair Value Measurements Using
(in thousands )	Level 1		Level 2		Level 3		Total
Investment in Polytronics	$	10,993	$	—	$	—	$	10,993

The following table presents assets measured at fair value by classification within the fair value hierarchy as of

December 31, 2016:

	Fair Value Measurements Using
(in thousands )	Level 1		Level 2		Level 3		Total
Investment in Polytronics	$	10,435	$	—	$	—	$	10,435

Ther

e were

no

changes during

2017

to the Company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of

December 30, 2017

and

December 31, 2016,

the Company held

no

non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

In addition to the methods and assumptions used for the financial instruments recorded at fair value as discussed above, the following methods and assumptions are used to estimate the fair value of other financial instruments that are

not

marked to market on a recurring basis. The

Company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable and its long-term debt. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and accounts receivable approximate their fair values. The Company’s revolving and term loan debt facilities’ fair values approximate book value at

December 30, 2017

and

December 31, 2016,

as the rates on these borrowings are variable in nature.

The carrying value and estimated fair values of the

Company’s Euro Senior Notes, Series A and Series B and U.S. Senior Notes, Series A and Series B, as of

December 30, 2017

and

December 31, 2016

were as follows:

	2017				2016
(in thousands )	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Euro Senior Notes, Series A due 2023	$	139,623	$	138,294	$	122,313	$	122,586
Euro Senior Notes, Series B due 2028		113,369		111,579		95,314		99,230
U .S. Senior Notes, Series A due 2022		25,000		24,737		25,000		24,746
U .S. Senior Notes, Series B due 2027		100,000		99,992		100,000		98,660

The fair value as of the measurement date, net book value as of the end of the year and related impairment charge for assets measured at fair value on a nonrecurring basis subsequent to initial recognition during the years ended

December 31, 2016

were as follows:

	Year Ended December 31, 2016				As of December 31, 2016
(in thousands )	Impairment Charge		Fair Value Measurement (Level 3)		Net Book Value
Goodwill	$	8,794	$	—	$	—
Other intangible assets		6,015		680		660
Total	$	14,809	$	680	$	660

During the

year ended

December 31, 2016,

the goodwill related to the Custom Products reporting unit was written down to its implied fair value of

zero

. In addition, the company recorded a

$6.0

million impairment charge, including

$3.8

million related to the Custom Products trade name and

$2.2

million for the customer relationship intangible assets. After recording the impairment charges, there was

no

remaining value related to the customer relationship intangible assets while

$0.7

million remaining net book value related to the tradename.

The company

’s accounting and finance management determines the valuation policies and procedures for Level

3

fair value measurements and is responsible for the development and determination of unobservable inputs. The following table presents the fair value, valuation techniques and related unobservable inputs for these Level

3

measurements for the year ended

December 31, 2016:

(in thousands , except rates data )	Fair Value		Valuation Technique	Unobservable Inputs	Rates
Tradename	$	680	Relief from royalty	Discount rate:		18%
				R oyalty rate:		1%
Customer relationships	$	—	Excess earnings	Discount rate:		18%
				Attrition rate:		5%