Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash equivalents, trade receivables, investments and payables. The financial instruments listed in the tables below are measured at fair value and the remaining financial instruments have carrying values that approximate their fair values. The Company accounts for its assets utilizing a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair-value hierarchy:

• Level 1—Quoted prices for identical instruments in active markets;

• Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

• Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

							Fair Value Measurements as of December 31, 2011
	Carrying Amount		Total Fair Value		Cash		Level 1		Level 2		Level 3
Measured on a recurring basis:
Assets:
Cash	$	47,502	$	47,502	$	47,502	$	—	$	—	$	—
Cash equivalents	68,803		68,803		—		40,793		28,010		—
Short-term—marketable securities	46,006		46,006		—		7,501		38,505		—
Non-Qualified Deferred Compensation Plan funds	3,635		3,635		—		3,635		—		—
Total	$	165,946	$	165,946	$	47,502	$	51,929	$	66,515	$	—
Liabilities:
Earnout payment liability	$	890	$	890	$	—	$	—	$	—	$	890
Non-Qualified Deferred Compensation Plan	3,635		3,635		—		3,635		—		—
Total	$	4,525	$	4,525	$	—	$	3,635	$	—	$	890

							Fair Value Measurements as of December 31, 2010
	Carrying Amount		Total Fair Value		Cash		Level 1		Level 2		Level 3
Measured on a recurring basis:
Assets:
Cash	$	72,422	$	72,422	$	72,422	$	—	$	—	$	—
Cash equivalents	120,042		120,042		—		120,042		—		—
Short-term—marketable securities	31,192		31,192		—		4,822		26,370		—
Non-Qualified Deferred Compensation Plan funds	2,971		2,971		—		2,971		—		—
Total	$	226,627	$	226,627	$	72,422	$	127,835	$	26,370	$	—
Liabilities:
Earnout payment liability	$	1,365	$	1,365	$	—	$	—	$	—	$	1,365
Non-Qualified Deferred Compensation Plan	2,971		2,971		—		2,971		—		—
Total	$	4,336	$	4,336	$	—	$	2,971	$	—	$	1,365

The instruments classified as Level 1 are measured at fair value using statement value and quoted market prices. The investments classified as Level 2 were valued using quoted prices for similar instruments in markets that are not active since identical instruments were not available. The Company determines the hierarchy levels at the end of each quarter.

The non-qualified deferred compensation plan provides eligible employees and members of the Board of Directors with the opportunity to defer a specified percentage of their cash compensation. The Company includes the asset deferred by the participants in the “Other noncurrent assets, net” line item of its consolidated balance sheets and the Company's obligation to deliver the deferred compensation in the “Other long-term liabilities” line item on its consolidated balance sheets.

During 2011 and 2010, the Company remeasured the fair value of the Level 3 earnout payment liability and revised its estimate due to the low probability of achieving the earnout target. The changes in estimate resulted in reductions in the liability of $681 and $467 for the years ended December 31, 2011 and 2010, respectively. The changes were recorded to selling, general and administrative expenses and were included as a component of "other" in the cash flows from operating activities. The Company used an income based method to measure the fair value of this liability.

The earnout payment liability resulted from the acquisition of TriAccess Technologies, Inc. ("TA") on September 3, 2009 as more fully described in Note 4 and represented an initial obligation to pay up to $5,000 to the former TA shareholders over three years. Since acquisition, the initial obligation has been reduced to a remaining amount of up to $1,000.

Details of the Level 3 fair value measurements are as follows:

Ending earnout payment liability December 31, 2009	$	1,509
Accretion	323
Change in estimate	(467		)
Ending earnout payment liability December 31, 2010	$	1,365
Accretion	206
Change in estimate	(681		)
Ending earnout payment liability December 31, 2011	$	890