Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

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Fair Value Measurements
 3 Months Ended
Mar. 29, 2014
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 3 – Fair Value Measurements

Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

Provisions of ASC 820 – Fair Value Measurement establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

 

Level 1 –   Observable inputs such as quoted prices in active markets;
Level 2 –   Inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level 3 –   Unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

 

We measure our financial assets and liabilities at fair value on a recurring basis using the following valuation techniques:

(a) Market Approach – uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

(b) Income Approach – uses valuation techniques to convert future estimated cash flows to a single present amount based on current market expectations about those future amounts, using present value techniques.

Financial Assets Valued on a Recurring Basis

As of March 29, 2014 and December 28, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included the Company’s financial instruments, including cash and cash equivalents and investments. The following table represents our fair value hierarchy and the valuation techniques used for financial assets measured at fair value on a recurring basis (in thousands):

 

     As of March 29, 2014  
     Total      Level 1      Level 2      Level 3      Valuation
Techniques		  

Assets:

               

Cash and cash equivalents (1)

    $ 1,392       $ 1,392       $  —        $  —          (a )

Investments – mutual funds (2)

      39         39         —          —          (a )
  

 

 

     

 

 

     

 

 

     

 

 

     
   $ 1,431       $ 1,431       $  —        $  —       
  

 

 

     

 

 

     

 

 

     

 

 

     

 

     As of December 28, 2013  
     Total      Level 1      Level 2      Level 3      Valuation
Techniques		  

Assets:

               

Cash and cash equivalents (1)

    $ 818       $ 818       $  —        $  —          (a )

Investments – mutual funds (2)

      47         47         —          —          (a )
  

 

 

     

 

 

     

 

 

     

 

 

     
   $ 865       $ 865       $  —        $ —       
  

 

 

     

 

 

     

 

 

     

 

 

     

 

(1) Cash equivalents consist primarily of money market funds and short-term investments with original maturity dates of three months or less at the date of purchase, for which the Company determines fair value through quoted market prices.
(2) Investments consist of mutual funds, classified as short-term investments available-for-sale and recorded at fair market value, based on quoted prices of identical assets that are trading in active markets as of the end of the period for which the values are determined.

During the thirteen weeks ended March 29, 2014 and March 30, 2013, there were no transfers into or out of Level 1 and Level 2 assets.

Non-Financial Assets Valued on a Non-Recurring Basis

The Company’s long-lived assets, including intangible assets subject to amortization, are measured at fair value on a non-recurring basis. These assets are measured at cost but are written-down to fair value, if necessary, as a result of impairment. As of March 29, 2014, the Company’s long-lived assets did not indicate a potential impairment under the provisions of ASC 360, as such, they were not measured at fair value. If such non-financial assets had been measured at fair value, they would be categorized in Level 3 of the fair value hierarchy, as the Company would be required to develop its own assumptions and analysis to determine if such non-financial assets were impaired.