Silicon Laboratories (SLAB) 10-Q 29 Jul 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 04, 2015	Jul. 21, 2015
Document and Entity Information
Entity Registrant Name	SILICON LABORATORIES INC
Entity Central Index Key	1,038,074
Document Type	10-Q
Document Period End Date	Jul. 4, 2015
Amendment Flag	false
Current Fiscal Year End Date	--01-02
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		42,968,204
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Current assets:
Cash and cash equivalents	$ 125,051	$ 141,706
Short-term investments	147,556	193,489
Accounts receivable, net of allowances for doubtful accounts of $624 at July 4, 2015 and $786 at January 3, 2015	71,403	70,367
Inventories	60,746	52,631
Deferred income taxes	17,815	21,173
Prepaid expenses and other current assets	59,025	49,171
Total current assets	481,596	528,537
Long-term investments	7,179	7,419
Property and equipment, net	130,994	132,820
Goodwill	263,925	228,781
Other intangible assets, net	128,196	115,021
Other assets, net	24,041	29,983
Total assets	1,035,931	1,042,561
Current liabilities:
Accounts payable	34,553	38,922
Current portion of long-term debt	10,000	10,000
Accrued expenses	49,327	73,646
Deferred income on shipments to distributors	38,573	38,662
Income taxes	942	2,084
Total current liabilities	133,395	163,314
Long-term debt	74,562	77,500
Other non-current liabilities	41,761	43,691
Total liabilities	$ 249,718	$ 284,505
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.0001 par value; 10,000 shares authorized; no shares issued and outstanding
Common stock-$0.0001 par value; 250,000 shares authorized; 42,908 and 42,225 shares issued and outstanding at July 4, 2015 and January 3, 2015, respectively	$ 4	$ 4
Additional paid-in capital	44,152	29,501
Retained earnings	742,586	728,633
Accumulated other comprehensive loss	(529)	(82)
Total stockholders' equity	786,213	758,056
Total liabilities and stockholders' equity	$ 1,035,931	$ 1,042,561

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Condensed Consolidated Balance Sheets
Accounts receivable, allowances for doubtful accounts (in dollars)	$ 624	$ 786
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000	10,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	250,000	250,000
Common stock, shares issued	42,908	42,225
Common stock, shares outstanding	42,908	42,225

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Condensed Consolidated Statements of Income
Revenues	$ 164,856	$ 154,918	$ 328,561	$ 300,609
Cost of revenues	67,428	56,255	134,764	114,841
Gross margin	97,428	98,663	193,797	185,768
Operating expenses:
Research and development	47,465	41,844	94,322	84,329
Selling, general and administrative	40,960	36,017	83,260	70,628
Operating expenses	88,425	77,861	177,582	154,957
Operating income	9,003	20,802	16,215	30,811
Other income (expense):
Interest income	166	200	358	502
Interest expense	(728)	(780)	(1,473)	(1,578)
Other income (expense), net	90	(6)	498	61
Income before income taxes	8,531	20,216	15,598	29,796
Provision for income taxes	956	5,937	1,645	7,407
Net income	$ 7,575	$ 14,279	$ 13,953	$ 22,389
Earnings per share:
Basic (in dollars per share)	$ 0.18	$ 0.33	$ 0.33	$ 0.52
Diluted (in dollars per share)	$ 0.17	$ 0.32	$ 0.32	$ 0.51
Weighted-average common shares outstanding:
Basic (in shares)	42,823	43,462	42,617	43,271
Diluted (in shares)	43,461	44,218	43,305	44,137

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Condensed Consolidated Statements of Comprehensive Income
Net income	$ 7,575	$ 14,279	$ 13,953	$ 22,389
Net changes to available-for-sale securities
Unrealized gains (losses) arising during the period	(312)	59	(332)	472
Reclassification for gains included in net income			10
Net changes to cash flow hedges
Unrealized gains (losses) arising during the period	50	(486)	(576)	(627)
Reclassification for losses included in net income	81	143	211	286
Other comprehensive income (loss), before tax	(181)	(284)	(687)	131
Provision (benefit) for income taxes	(63)	(99)	(240)	46
Other comprehensive income (loss)	(118)	(185)	(447)	85
Comprehensive income	$ 7,457	$ 14,094	$ 13,506	$ 22,474

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
Operating Activities
Net income	$ 13,953	$ 22,389
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation of property and equipment	6,029	6,427
Amortization of other intangible assets and other assets	14,697	8,839
Stock-based compensation expense	21,576	18,559
Income tax benefit from stock-based awards	2,781	377
Excess income tax benefit from stock-based awards	(2,056)	(589)
Deferred income taxes	3,892	4,665
Changes in operating assets and liabilities:
Accounts receivable	1,724	3,082
Inventories	(6,534)	(123)
Prepaid expenses and other assets	452	3,394
Accounts payable	(3,359)	3,846
Accrued expenses	(1,027)	19,697
Deferred income on shipments to distributors	(2,132)	2,584
Income taxes	(7,171)	(5,130)
Other non-current liabilities	(5,622)	(24,599)
Net cash provided by operating activities	37,203	63,418
Investing Activities
Purchases of available-for-sale investments	(46,908)	(117,744)
Proceeds from sales and maturities of available-for-sale investments	92,759	61,803
Purchases of property and equipment	(4,714)	(3,339)
Purchases of other assets	(1,871)	(2,726)
Acquisition of business, net of cash acquired	(76,899)
Net cash used in investing activities	(37,633)	(62,006)
Financing Activities
Proceeds from issuance of common stock, net of cash paid for withheld taxes	1,684	8,943
Excess income tax benefit from stock-based awards	2,056	589
Repurchases of common stock	(10,418)	(10,954)
Payment of acquisition-related contingent consideration	(4,464)
Payments on debt	(5,083)	(2,500)
Net cash used in financing activities	(16,225)	(3,922)
Decrease in cash and cash equivalents	(16,655)	(2,510)
Cash and cash equivalents at beginning of period	141,706	95,800
Cash and cash equivalents at end of period	$ 125,051	$ 93,290

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jul. 04, 2015
Significant Accounting Policies
Significant Accounting Policies	1. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Condensed Consolidated Financial Statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments which, in the opinion of management, are necessary to present fairly the condensed consolidated financial position of Silicon Laboratories Inc. and its subsidiaries (collectively, the “Company”) at July 4, 2015 and January 3, 2015, the condensed consolidated results of its operations for the three and six months ended July 4, 2015 and June 28, 2014, the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 4, 2015 and June 28, 2014, and the Condensed Consolidated Statements of Cash Flows for the six months ended July 4, 2015 and June 28, 2014. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated results of operations for the three and six months ended July 4, 2015 are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited Condensed Consolidated Financial Statements do not include certain footnotes and financial presentations normally required under U.S. generally accepted accounting principles (GAAP). Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended January 3, 2015, included in the Company’s Form 10-K filed with the Securities and Exchange Commission (SEC) on February 6, 2015. The Company prepares financial statements on a 52-53 week year that ends on the Saturday closest to December 31. Fiscal 2015 will have 52 weeks. Fiscal 2014 had 53 weeks with the extra week occurring in the fourth quarter of the year. In a 52-week year, each fiscal quarter consists of 13 weeks. Reclassifications Certain reclassifications have been made to prior year financial statements to conform to current year presentation. Revenue Recognition Revenues are generated predominately by sales of the Company’s integrated circuits (ICs). The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment. A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company’s estimate of the impact of rights of return and price protection. A small portion of the Company’s revenues is derived from the sale of patents. The above revenue recognition criteria for patent sales are generally met upon the execution of the patent sale agreement. Recent Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2014, the FASB issued FASB ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), Revenue Recognition

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jul. 04, 2015
Earnings Per Share
Earnings Per Share	2. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Net income $ 7,575 $ 14,279 $ 13,953 $ 22,389 Shares used in computing basic earnings per share 42,823 43,462 42,617 43,271 Effect of dilutive securities: Stock options and other stock-based awards 638 756 688 866 Shares used in computing diluted earnings per share 43,461 44,218 43,305 44,137 Earnings per share: Basic $ 0.18 $ 0.33 $ 0.33 $ 0.52 Diluted $ 0.17 $ 0.32 $ 0.32 $ 0.51 For the three months ended July 4, 2015 and June 28, 2014 and the six months ended July 4, 2015 and June 28, 2014, approximately 0.1 million, 0.1 million, 0.1 million and 0.2 million shares, respectively, were not included in the diluted earnings per share calculation since the shares were anti-dilutive.

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments	6 Months Ended
	Jul. 04, 2015
Cash, Cash Equivalents and Investments
Cash, Cash Equivalents and Investments	3. Cash, Cash Equivalents and Investments The Company’s cash equivalents and short-term investments as of July 4, 2015 consisted of municipal bonds, money market funds, variable-rate demand notes, commercial paper, corporate bonds, certificates of deposit and international government bonds. The Company’s long-term investments consisted of auction-rate securities. In fiscal 2008, auctions for many of the Company’s auction-rate securities failed because sell orders exceeded buy orders. As of July 4, 2015, the Company held $8.0 million par value auction-rate securities, all of which have experienced failed auctions. The underlying assets of the securities consisted of student loans and municipal bonds, of which $6.0 million were guaranteed by the U.S. government and the remaining $2.0 million were privately insured. As of July 4, 2015, $6.0 million of the auction-rate securities had credit ratings of AA and $2.0 million had a credit rating of A. These securities have contractual maturity dates ranging from 2033 to 2046 at July 4, 2015. The Company is receiving the underlying cash flows on all of its auction-rate securities. The principal amounts associated with failed auctions are not expected to be accessible until a successful auction occurs, the issuer redeems the securities, a buyer is found outside of the auction process or the underlying securities mature. The Company is unable to predict if these funds will become available before their maturity dates. The Company does not expect to need access to the capital represented by any of its auction-rate securities prior to their maturities. The Company does not intend to sell, and believes it is not more likely than not that it will be required to sell, its auction-rate securities before their anticipated recovery in market value or final settlement at the underlying par value. The Company believes that the credit ratings and credit support of the security issuers indicate that they have the ability to settle the securities at par value. As such, the Company has determined that no other-than-temporary impairment losses existed as of July 4, 2015. The Company’s cash, cash equivalents and investments consisted of the following (in thousands): July 4, 2015 Cost Gross Gross Fair Value Cash and Cash Equivalents: Cash on hand $ 65,449 $ — $ — $ 65,449 Available-for-sale securities: Money market funds 43,689 — — 43,689 Commercial paper 9,823 — — 9,823 Certificates of deposit 5,547 — — 5,547 Municipal bonds 543 — — 543 Total available-for-sale securities 59,602 — — 59,602 Total cash and cash equivalents $ 125,051 $ — $ — $ 125,051 Short-term Investments: Available-for-sale securities: Municipal bonds $ 122,148 $ (45 ) $ 96 $ 122,199 Variable-rate demand notes 14,495 — — 14,495 Corporate bonds 7,431 (6 ) 1 7,426 International government bonds 2,240 (3 ) — 2,237 Commercial paper 1,199 — — 1,199 Total short-term investments $ 147,513 $ (54 ) $ 97 $ 147,556 Long-term Investments: Available-for-sale securities: Auction rate securities $ 8,000 $ (821 ) $ — $ 7,179 Total long-term investments $ 8,000 $ (821 ) $ — $ 7,179 January 3, 2015 Cost Gross Gross Fair Value Cash and Cash Equivalents: Cash on hand $ 52,144 $ — $ — $ 52,144 Available-for-sale securities: Money market funds 71,415 — — 71,415 Certificates of deposit 7,739 — — 7,739 Commercial paper 5,348 — — 5,348 Municipal bonds 1,756 — 1 1,757 U.S. government agency 1,202 — — 1,202 Corporate bonds 1,101 — — 1,101 U.S. government bonds 1,000 — — 1,000 Total available-for-sale securities 89,561 — 1 89,562 Total cash and cash equivalents $ 141,705 $ — $ 1 $ 141,706 Short-term Investments: Available-for-sale securities: Municipal bonds $ 129,005 $ (25 ) $ 172 $ 129,152 Corporate bonds 33,043 (35 ) 25 33,033 Variable-rate demand notes 12,915 — — 12,915 Commercial paper 8,995 — — 8,995 Asset-backed securities 5,380 (3 ) — 5,377 International government bonds 2,526 (10 ) — 2,516 U.S. government bonds 650 — — 650 U.S. government agency 601 — — 601 Certificates of deposit 250 — — 250 Total short-term investments $ 193,365 $ (73 ) $ 197 $ 193,489 Long-term Investments: Available-for-sale securities: Auction rate securities $ 8,000 $ (581 ) $ — $ 7,419 Total long-term investments $ 8,000 $ (581 ) $ — $ 7,419 The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): Less Than 12 Months 12 Months or Greater Total As of July 4, 2015 Fair Gross Fair Gross Fair Gross Municipal bonds $ 26,686 $ (45 ) $ — $ — $ 26,686 $ (45 ) Auction rate securities — — 7,179 (821 ) 7,179 (821 ) Corporate bonds 6,315 (6 ) — — 6,315 (6 ) International government bonds 2,237 (3 ) — — 2,237 (3 ) $ 35,238 $ (54 ) $ 7,179 $ (821 ) $ 42,417 $ (875 ) Less Than 12 Months 12 Months or Greater Total As of January 3, 2015 Fair Gross Fair Gross Fair Gross Municipal bonds $ 23,735 $ (25 ) $ — $ — $ 23,735 $ (25 ) Corporate bonds 20,327 (35 ) — — 20,327 (35 ) Auction rate securities — — 7,419 (581 ) 7,419 (581 ) Asset-backed securities 5,080 (3 ) — — 5,080 (3 ) International government bond 2,516 (10 ) — — 2,516 (10 ) $ 51,658 $ (73 ) $ 7,419 $ (581 ) $ 59,077 $ (654 ) The gross unrealized losses as of July 4, 2015 and January 3, 2015 were due primarily to the illiquidity of the Company’s auction-rate securities and, to a lesser extent, to changes in market interest rates. The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at July 4, 2015 (in thousands): Cost Fair Due in one year or less $ 157,646 $ 157,704 Due after one year through ten years 37,754 37,739 Due after ten years 19,715 18,894 $ 215,115 $ 214,337

Derivative Financial Instrument

Derivative Financial Instruments	6 Months Ended
	Jul. 04, 2015
Derivative Financial Instruments
Derivative Financial Instruments	4. Derivative Financial Instruments The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates and foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows. Interest Rate Swaps The Company is exposed to interest rate fluctuations in the normal course of its business, including through its Credit Facilities. The interest payments on the facility are calculated using a variable-rate of interest. The Company has entered into an interest rate swap agreement with an original notional value of $100 million (equal to the full amount borrowed under the Term Loan Facility) and, effectively, converted the LIBOR portion of the variable-rate interest payments to fixed-rate interest payments through July 2017 (the maturity date of the Term Loan Facility). The Company’s interest rate swap agreement is designated and qualifies as a cash flow hedge. The effective portion of the gain or loss on the interest rate swap is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is subsequently recognized as interest expense in the Consolidated Statement of Income when the hedged exposure affects earnings. The Company estimates the fair values of interest rate swaps based on quoted prices and market observable data of similar instruments. If the Term Loan Facility or the interest rate swap agreement is terminated prior to maturity, the fair value of the interest rate swap recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the agreements at the time of termination. The Company did not discontinue any cash flow hedges in any of the periods presented. The Company measures the effectiveness of its cash flow hedge by comparing the change in fair value of the hedged variable interest payments with the change in fair value of the interest rate swap. The Company recognizes ineffective portions of the hedge, as well as amounts not included in the assessment of effectiveness, in the Consolidated Statement of Income. As of July 4, 2015, no portion of the gains or losses from the Company’s hedging instrument was excluded from the assessment of effectiveness. Hedge ineffectiveness was not material for any of the periods presented. The Company’s derivative financial instrument in cash flow hedging relationships consisted of the following (in thousands): Fair Value Balance Sheet Location July 4, January 3, Interest rate swap Other assets, net $ — $ 331 Other non-current liabilities 35 — The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): Gain (Loss) Recognized in Location of Loss Loss Reclassified Three Months Ended Three Months Ended July 4, June 28, July 4, June 28, Interest rate swaps $ 50 $ (486 ) Interest expense $ (81 ) $ (143 ) Six Months Ended Six Months Ended July 4, June 28, July 4, June 28, Interest rate swaps $ (576 ) $ (627 ) Interest expense $ (211 ) $ (286 ) The Company expects to reclassify $0.3 million of its interest rate swap losses included in accumulated other comprehensive loss as of July 4, 2015 into earnings in the next 12 months, which would be offset by lower interest payments. Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to manage exposure to foreign exchange risk. These instruments are used to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in other income (expense), net in the Consolidated Statement of Income in the same period as the remeasurement loss and gain of the related foreign currency denominated asset or liability. The Company does not apply hedge accounting to its foreign currency derivative instruments. As of July 4, 2015, the Company held one foreign currency forward contract denominated in Norwegian Krone with a notional value of $5.7 million. The fair value of the contract was not material as of July 4, 2015. The contract has a maturity date of September 30, 2015 and it was not designated as a hedging instrument. The Company held no foreign currency forward contracts during the three and six months ended June 28, 2014. The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands): Three Months Ended Six Months Ended Gain (Loss) Recognized in Income July 4, June 28, July 4, June 28, Location Foreign currency forward contracts $ (104 ) $ — $ 446 $ — Other income (expense), net

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jul. 04, 2015
Fair Value of Financial Instruments
Fair Value of Financial Instruments	5. Fair Value of Financial Instruments The fair values of the Company’s financial instruments are recorded using a hierarchal disclosure framework based upon the level of subjectivity of the inputs used in measuring assets and liabilities. The three levels are described below: Level 1 - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 - Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Inputs are unobservable for the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s own data. The following summarizes the valuation of the Company’s financial instruments (in thousands). The tables do not include either cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value. Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash Equivalents: Money market funds $ 43,689 $ — $ — $ 43,689 Corporate bonds — 9,823 — 9,823 Certificates of deposit — 5,547 — 5,547 Municipal bonds — 543 — 543 Total cash equivalents $ 43,689 $ 15,913 $ — $ 59,602 Short-term Investments: Municipal bonds $ — $ 122,199 $ — $ 122,199 Variable-rate demand notes — 14,495 — 14,495 Corporate bonds — 7,426 — 7,426 International government bonds — 2,237 — 2,237 Commercial paper — 1,199 — 1,199 Total short-term investments $ — $ 147,556 $ — $ 147,556 Long-term Investments: Auction rate securities $ — $ — $ 7,179 $ 7,179 Total long-term investments $ — $ — $ 7,179 $ 7,179 Total $ 43,689 $ 163,469 $ 7,179 $ 214,337 Liabilities: Accrued expenses: Contingent consideration $ — $ — $ 3,965 $ 3,965 Other non-current liabilities: Contingent consideration $ — $ — $ 11,127 $ 11,127 Derivative instruments — 35 — 35 $ — $ 35 $ 11,127 $ 11,162 Total $ — $ 35 $ 15,092 $ 15,127 Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash Equivalents: Money market funds $ 71,415 $ — $ — $ 71,415 Certificates of deposit — 7,739 — 7,739 Commercial paper — 5,348 — 5,348 Municipal bonds — 1,757 — 1,757 U.S. government agency — 1,202 — 1,202 Corporate bonds — 1,101 — 1,101 U.S. government bonds 1,000 — — 1,000 Total cash equivalents $ 72,415 $ 17,147 $ — $ 89,562 Short-term Investments: Municipal bonds $ — $ 129,152 $ — $ 129,152 Corporate bonds — 33,033 — 33,033 Variable-rate demand notes — 12,915 — 12,915 Commercial paper — 8,995 — 8,995 Asset-backed securities — 5,377 — 5,377 International government bonds — 2,516 — 2,516 U.S. government bond 650 — — 650 U.S. government agency — 601 — 601 Certificates of deposit — 250 — 250 Total short-term investments $ 650 $ 192,839 $ — $ 193,489 Long-term Investments: Auction rate securities $ — $ — $ 7,419 $ 7,419 Total long-term investments $ — $ — $ 7,419 $ 7,419 Other assets, net: Derivative instruments $ — $ 331 $ — $ 331 Total $ — $ 331 $ — $ 331 Total $ 73,065 $ 210,317 $ 7,419 $ 290,801 Liabilities: Accrued expenses: Contingent consideration $ — $ — $ 4,288 $ 4,288 Other non-current liabilities: Contingent consideration $ — $ — $ 14,150 $ 14,150 Total $ — $ — $ 18,438 $ 18,438 The Company’s cash equivalents and short-term investments that are classified as Level 1 are valued using quoted prices and other relevant information generated by market transactions involving identical assets. Cash equivalents and short-term investments classified as Level 2 are valued using non-binding market consensus prices that are corroborated with observable market data; quoted market prices for similar instruments in active markets; or pricing models, such as a discounted cash flow model, with all significant inputs derived from or corroborated with observable market data. Investments classified as Level 3 are valued using a discounted cash flow model. The assumptions used in preparing the discounted cash flow model include estimates for interest rates, amount of cash flows, expected holding periods of the securities and a discount to reflect the Company’s inability to liquidate the securities. The Company’s derivative instruments are valued using discounted cash flow models. The assumptions used in preparing the valuation models include quoted interest swap rates, foreign exchange rates, forward and spot prices for currencies, and market observable data of similar instruments. The Company’s contingent consideration is valued using a Monte Carlo simulation model or a probability weighted discounted cash flow model. The assumptions used in preparing the Monte Carlo simulation model include estimates for revenue growth rates, revenue volatility, contractual terms and discount rates. The assumptions used in preparing the discounted cash flow model include estimates for outcomes if milestone goals are achieved, the probability of achieving each outcome and discount rates. The following summarizes quantitative information about Level 3 fair value measurements. Auction rate securities Fair Value at Valuation Technique Unobservable Input Weighted Average $ 7,179 Discounted cash flow Estimated yield 0.86% Expected holding period 10 years Estimated discount rate 3.64% The Company has followed an established internal control procedure used in valuing auction rate securities. The procedure involves the analysis of valuation techniques and evaluation of unobservable inputs commonly used by market participants to price similar instruments, and which have been demonstrated to provide reasonable estimates of prices obtained in actual market transactions. Outputs from the valuation process are assessed against various market sources when they are available, including marketplace quotes, recent trades of similar illiquid securities, benchmark indices and independent pricing services. The technique and unobservable input parameters may be recalibrated periodically to achieve an appropriate estimation of the fair value of the securities. Significant changes in any of the unobservable inputs used in the fair value measurement of auction rate securities in isolation could result in a significantly lower or higher fair value measurement. An increase in expected yield would result in a higher fair value measurement, whereas an increase in expected holding period or estimated discount rate would result in a lower fair value measurement. Generally, a change in the assumptions used for expected holding period is accompanied by a directionally similar change in the assumptions used for estimated yield and discount rate. Contingent consideration Fair Value at Valuation Technique Unobservable Input Range $ 15,092 Monte Carlo simulation Expected revenue growth rate 40.8% – 71.9% Expected revenue volatility 20.0% Expected term 0.5 years – 3.5 years Estimated discount rate 0.22% – 1.57% The Company has followed an established internal control procedure used in valuing contingent consideration. The valuation of contingent consideration for the Energy Micro acquisition is based on a Monte Carlo simulation model. The fair value of this valuation is estimated on a quarterly basis through a collaborative effort by the Company’s sales, marketing and finance departments. Significant changes in any of the unobservable inputs used in the fair value measurement of contingent consideration in isolation could result in a significantly lower or higher fair value. A change in projected revenue growth rates would be accompanied by a directionally similar change in fair value. The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 4, 2015 (in thousands): Assets Auction Rate Securities Three Months Six Months Beginning balance $ 7,401 $ 7,419 Loss included in other comprehensive income (loss) (222 ) (240 ) Balance at July 4, 2015 $ 7,179 $ 7,179 Liabilities Contingent Consideration (1) Three Months Six Months Beginning balance $ 14,804 $ 18,438 Settlements — (4,464 ) Loss recognized in earnings (2) 288 1,118 Balance at July 4, 2015 $ 15,092 $ 15,092 Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: $ (288 ) $ (1,118 ) (1) (2) Fair values of other financial instruments The Company’s Term Loan Facility bears interest at LIBOR plus an applicable margin. The Term Loan Facility is recorded at cost, but is measured at fair value for disclosure purposes. Fair value is estimated based on Level 2 inputs, using a discounted cash flow analysis of future principal payments and projected interest based on current market rates. As of July 4, 2015 and January 3, 2015, the fair value of the Company’s debt under the Term Loan Facility was approximately $82.5 million and $87.4 million, respectively. The Company’s other financial instruments, including cash, accounts receivable and accounts payable, are recorded at amounts that approximate their fair values due to their short maturities.

Balance Sheet Details

Balance Sheet Details	6 Months Ended
	Jul. 04, 2015
Balance Sheet Details
Balance Sheet Details	6. Balance Sheet Details The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories July 4, January 3, Work in progress $ 46,137 $ 40,640 Finished goods 14,609 11,991 $ 60,746 $ 52,631

Acquisitions

Acquisitions	6 Months Ended
	Jul. 04, 2015
Acquisitions
Acquisitions	7. Acquisitions Bluegiga On January 30, 2015, the Company acquired Bluegiga Technologies Oy, a private company based in Finland. Bluegiga is a provider of Bluetooth® Smart, Bluetooth Classic and Wi-Fi® modules and software stacks for a multitude of applications in the Internet of Things (IoT), industrial automation, consumer electronics, automotive, retail, residential, and health and fitness markets. The Company acquired Bluegiga for cash consideration of approximately $58.0 million. Approximately $9.4 million of the initial consideration was held in escrow as security for breaches of representations and warranties and certain other expressly enumerated matters. The Company recorded the purchase of Bluegiga using the acquisition method of accounting and accordingly, recognized the assets acquired and liabilities assumed at their fair values as of the date of the acquisition. The results of Bluegiga’s operations are included in the Company’s consolidated results of operations beginning on the date of the acquisition. The Company believes that this strategic acquisition will accelerate its entry into the wireless module market. This factor contributed to a purchase price that was in excess of the fair value of the net assets acquired and, as a result, the Company recorded goodwill. The goodwill is not deductible for tax purposes. The purchase price was allocated as follows (in thousands): Amount Weighted-Average Intangible assets: In-process research and development $ 5,710 Not amortized Developed technology 12,190 8 Customer relationships 6,670 4 Trademarks 880 3 25,450 Cash and cash equivalents 1,132 Other current assets 6,156 Goodwill 35,145 Other non-current assets 208 Current liabilities (3,289 ) Non-current deferred tax liabilities, net (4,328 ) Long-term debt (2,232 ) Other non-current liabilities (220 ) Total purchase price $ 58,022 The allocation of the purchase price is preliminary and subject to change, based on the finalization of income tax matters. Accordingly, adjustments may be made to the values of the assets acquired and liabilities assumed as additional information is obtained about the facts and circumstances that existed at the valuation date. In-process research and development (IPR&D) represents acquired technology that had not achieved technological feasibility as of the acquisition date and had no alternative future use. The IPR&D recorded in connection with the acquisition of Bluegiga consisted primarily of Bluetooth Smart Ready and Bluetooth Smart modules and software stacks. The fair value of these technologies was determined using the income approach. The discount rate applicable to the cash flows was 16.1%. The significant risks associated with the projects include the Company’s potential inability to produce working models and the final products gaining customer acceptance. Pro forma information related to this acquisition has not been presented because it would not be materially different from amounts reported. The Company recorded approximately $1.2 million of acquisition-related costs in selling, general and administrative expenses during the six months ended July 4, 2015. Energy Micro On July 1, 2013, the Company acquired Energy Micro AS for approximately $140.6 million, including: 1) Initial consideration of $107.4 million; 2) Deferred consideration with an estimated fair value of $19.2 million at the date of acquisition; and 3) Contingent consideration (the “Earn-Out”) with an estimated fair value of $14.0 million at the date of acquisition. The Earn-Out is payable on an annual basis over a five-year period from fiscal 2014 through 2018 (the “Earn-Out Period”) and in no event shall exceed $6,666,666 per year, unless revenue from the Earn-Out Products exceeds $400 million in a single fiscal year during the Earn-Out Period (in which case, the entire Earn-Out amount less any amounts previously paid will become payable). Approximately $20.3 million of the initial consideration was withheld by the Company as security for breaches of representations and warranties and certain other expressly enumerated matters (the “Holdback”). A portion of the Earn-Out (28.76%) is contingent on the continued employment of certain key employees for the three years following the acquisition date (the “Departure Percentage”). The Departure Percentage was accounted for as a transaction separate from the business combination based on its economic substance and will be recorded as post-combination compensation expense in the Company’s financial statements during the Earn-Out period. In the first quarter of 2015, the Company made the following payments in connection with the acquisition: (a) approximately $20.0 million was paid for the release of the Holdback; and (b) approximately $6.3 million was paid for the first annual period of the Earn-out. Approximately $1.8 million of the Earn-out payment represented the Departure Percentage portion and was recorded as compensation expense during fiscal 2014. The remaining approximately $4.5 million of the Earn-out payment represented additional consideration.

Debt

Debt	6 Months Ended
	Jul. 04, 2015
Debt
Debt	8. Debt On July 31, 2012, the Company and certain of its domestic subsidiaries (the “Guarantors”) entered into a $230 million five-year Credit Agreement (the “Agreement”). The Agreement consists of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility (collectively, the “Credit Facilities”). The Term Loan Facility provides for quarterly principal amortization (equal to 5% of the principal in each of the first two years and 10% of the principal in each of the next three years) with the remaining balance payable upon the maturity date. The Revolving Credit Facility includes a $25 million letter of credit sublimit and a $10 million swingline loan sublimit. The Company has an option to increase the size of the Revolving Credit Facility by up to an aggregate of $50 million in additional commitments, subject to certain conditions. On September 27, 2012, the Company borrowed $100 million under the Term Loan Facility. To date, the Company has not borrowed under the Revolving Credit Facility. The Term Loan Facility and Revolving Credit Facility, other than swingline loans, will bear interest at LIBOR plus an applicable margin or, at the option of the Company, a base rate (defined as the highest of the Bank of America prime rate, the Federal Funds rate plus 0.50% and a daily rate equal to one-month LIBOR plus 1.00%) plus an applicable margin. Swingline loans accrue interest at the base rate plus the applicable margin for base rate loans. The applicable margins for the LIBOR rate loans range from 1.50% to 2.50% and for base rate loans range from 0.50% to 1.50%, depending in each case, on the leverage ratio as defined in the Agreement. The Company also pays a commitment fee on the unused amount of the Revolving Credit Facility. In connection with the closing of the Credit Agreement, the Company entered into a security and pledge agreement. Under the security and pledge agreement, the Company pledged equity securities of certain of its subsidiaries, subject to exceptions and limitations. The Credit Facilities contain various conditions, covenants and representations with which the Company must be in compliance in order to borrow funds and to avoid an event of default, including financial covenants that the Company must maintain a leverage ratio (funded debt/EBITDA) of no more than 2.5 to 1 and a minimum fixed charge coverage ratio (EBITDA/debt payments, income taxes and capital expenditures) of no less than 1.50 to 1. As of July 4, 2015, the Company was in compliance with all covenants of the Credit Facilities. As of July 4, 2015, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): Fiscal Year 2015 $ 5,000 2016 10,000 2017 67,500 Total $ 82,500 The Company assumed $2.2 million of debt in connection with its acquisition of Bluegiga. The debt instruments bear interest at rates between 1.0% and 3.0%. The contractual maturities of a portion of the debt are based on certain financial metrics of the acquired company. The Company estimates that the debt will mature between March 2016 and August 2020. On July 24, 2015, the Company amended its Credit Agreement. The amended Credit Agreement consists of a $300 million five-year Revolving Credit Facility. See Note 14, Subsequent Event Interest Rate Swap Agreement In connection with the $100 million borrowed under the Term Loan Facility, the Company entered into an interest rate swap agreement as a hedge against the LIBOR portion of such variable interest payments. Under the terms of the swap agreement, the Company effectively converted the LIBOR portion of the interest on the Term Loan Facility to a fixed interest rate of 0.764% through the maturity date. As of July 4, 2015, the combined interest rate on the Term Loan Facility (which includes an applicable margin) was 2.514%. See Note 4, Derivative Financial Instruments

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jul. 04, 2015
Stockholders' Equity
Stockholders' Equity	9. Stockholders’ Equity Common Stock The Company issued 0.9 million shares of common stock during the six months ended July 4, 2015. Share Repurchase Programs The Board of Directors authorized the following share repurchase programs (in thousands): Program Authorization Date Program Program October 2014 December 2015 $ 100,000 January 2014 January 2015 $ 100,000 January 2013 January 2014 $ 50,000 These programs allow for repurchases to be made in the open market or in private transactions, including structured or accelerated transactions, subject to applicable legal requirements and market conditions. The Company repurchased 0.2 million shares of its common stock for $10.4 million during the six months ended July 4, 2015. The Company repurchased 0.2 million shares of its common stock for $11.0 million during the six months ended June 28, 2014. These shares were retired upon repurchase. Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands): Unrealized Gain Net Unrealized Losses Total Balance at January 3, 2015 $ 215 $ (297 ) $ (82 ) Other comprehensive loss before reclassifications (374 ) (216 ) (590 ) Amount reclassified from accumulated other comprehensive loss 137 6 143 Net change for the period (237 ) (210 ) (447 ) Balance at July 4, 2015 $ (22 ) $ (507 ) $ (529 ) Reclassifications From Accumulated Other Comprehensive Loss Three Months Ended Six Months Ended Reclassification (in thousands) July 4, June 28, July 4, June 28, Losses on cash flow hedges to: Interest expense $ (81 ) $ (143 ) $ (211 ) $ (286 ) Losses on available-for-sale securities to: Interest income — — (10 ) — (81 ) (143 ) (221 ) (286 ) Income tax benefit 28 50 78 100 Total reclassifications $ (53 ) $ (93 ) $ (143 ) $ (186 )

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jul. 04, 2015
Stock-Based Compensation
Stock-Based Compensation	10. Stock-Based Compensation In fiscal 2009, the stockholders of the Company approved the 2009 Stock Incentive Plan (the “2009 Plan”) and the 2009 Employee Stock Purchase Plan (the “2009 Purchase Plan”). In fiscal 2014, the stockholders of the Company approved amendments to both the 2009 Plan and the 2009 Purchase Plan. The amendments authorized additional shares of common stock for issuance, to comply with changes in applicable law, improve the Company’s corporate governance and to implement other best practices. The amended plans are currently effective. Stock-based compensation costs are based on the fair values on the date of grant for stock options and on the date of enrollment for the employee stock purchase plans, estimated by using the Black-Scholes option-pricing model. The fair values of stock awards and restricted stock units (RSUs) equal their intrinsic value on the date of grant. The fair values of market stock units (MSUs) generally are estimated using a Monte Carlo simulation based on the date of grant. The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Cost of revenues $ 229 $ 178 $ 459 $ 374 Research and development 4,960 4,327 9,755 8,568 Selling, general and administrative 5,868 4,777 11,362 9,617 11,057 9,282 21,576 18,559 Income tax benefit 1,182 587 2,486 1,898 $ 9,875 $ 8,695 $ 19,090 $ 16,661 The Company had approximately $66.2 million of total unrecognized compensation costs related to granted stock awards as of July 4, 2015 that are expected to be recognized over a weighted-average period of approximately 2.2 years. There were no significant stock-based compensation costs capitalized into assets in any of the periods presented.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 04, 2015
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Patent Litigation On January 21, 2014, Cresta Technology Corporation (“Cresta Technology”), a Delaware corporation, filed a lawsuit against the Company, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., LG Electronics Inc. and LG Electronics U.S.A., Inc. in the United States District Court in the District of Delaware, alleging infringement of United States Patent Nos. 7,075,585, 7,265,792 and 7,251,466. The lawsuit relates to the Company’s family of television tuner products. Cresta Technology seeks unspecified compensatory and enhanced damages, attorney fees and a permanent injunction. On January 28, 2014, Cresta Technology also filed a complaint with the United States International Trade Commission (“ITC”) alleging infringement of the same patents against the Company, Samsung and LG Electronics and seeking to prevent the importation and sale of allegedly infringing products in the United States. The ITC instituted an investigation based on Cresta Technology’s complaint on February 27, 2014. An evidentiary hearing in this ITC Investigation concluded on December 5, 2014. The ITC Administrative Law Judge (“ALJ”) issued an Initial Determination on February 27, 2015, finding that all the patent claims asserted against the Company’s products were either invalid or not infringed. The ALJ also found that Cresta Technology failed to establish the ITC’s domestic industry requirement. Accordingly, the ALJ found no violation by the Company. The Final Determination by the ITC is scheduled to issue on August 19, 2015. The Delaware District Court action has been stayed pending completion of the proceedings in the ITC. The Company intends to vigorously defend against these allegations. On May 6, 2014, the Company filed a complaint with the ITC alleging infringement of United States Patent Nos. 6,137,372 and 6,233,441 against Cresta Technology, Hauppauge Digital, Inc., Hauppague Computer Works, Inc., PCTV Systems, S.a.r.l., Luxembourg and PCTV Systems S.a.r.l., seeking to prevent the importation and sale of allegedly infringing products in the United States. On July 1, 2014, the Administrative Law Judge accepted a consent order whereby Cresta Technology will not sell for importation, import or sell in the United States television tuners that infringe the Company’s United States Patent Nos. 6,137,372 and 6,233,441. Accordingly, this ITC investigation has been terminated in its entirety. On July 16, 2014, the Company filed a lawsuit against Cresta Technology in the United States District Court in the Northern District of California alleging infringement of United States Patent Nos. 6,308,055, 6,304,146, 6,137,372, 6,233,441, 6,965,761 and 7,353,011. The Company is seeking a permanent injunction stopping the sale of all allegedly infringing Cresta Technology products and an award of damages and attorney fees. As is customary in the semiconductor industry, the Company provides indemnification protection to its customers for intellectual property claims related to the Company’s products. The Company has not accrued any material liability on its consolidated balance sheet related to such indemnification obligations in connection with the Cresta Technology litigation. At this time, the Company cannot predict the outcome of these matters or the resulting financial impact to it, if any. Other The Company is involved in various other legal proceedings that have arisen in the normal course of business. While the ultimate results of these matters cannot be predicted with certainty, the Company does not expect them to have a material adverse effect on its consolidated financial statements.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jul. 04, 2015
Related Party Transactions
Related Party Transactions	12. Related Party Transactions On July 1, 2013, Geir Førre joined the Company as senior vice president. Mr. Førre was chief executive officer of Energy Micro, until it was acquired by the Company. Mr. Førre was the beneficial owner of approximately 30% of the Energy Micro equity and accordingly received approximately $35 million at closing. In the first quarter of 2015, Mr. Førre received approximately $6.1 million of the $20.0 million paid for the holdback related to potential indemnification claims and approximately $1.9 million of the $6.3 million paid for the fiscal 2014 earn-out. Mr. Førre may receive up to approximately $8.1 million of the remaining potential $26.7 million earn-out for fiscal 2015 through 2018. On October 17, 2013, the Company appointed Alf-Egil Bogen to its board of directors. Mr. Bogen was chief marketing officer of Energy Micro, until it was acquired by the Company. Mr. Bogen was the beneficial owner of approximately 2% of the Energy Micro equity and accordingly received approximately $0.9 million at closing. In the first quarter of 2015, Mr. Bogen received approximately $0.4 million of the $20.0 million paid for the holdback related to potential indemnification claims and approximately $0.1 million of the $6.3 million paid for the fiscal 2014 earn-out. Mr. Bogen may receive up to approximately $0.5 million of the remaining potential $26.7 million earn-out for fiscal 2015 through 2018. Mr. Bogen had invested approximately $0.8 million in Energy Micro prior to the acquisition.

Income Taxes

Income Taxes	6 Months Ended
	Jul. 04, 2015
Income Taxes
Income Taxes	13. Income Taxes Provision for income taxes includes both domestic and foreign income taxes at the applicable statutory rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences. Income tax expense was $1.0 million and $5.9 million for the three months ended July 4, 2015 and June 28, 2014, resulting in effective tax rates of 11.2% and 29.4%, respectively. Income tax expense was $1.6 million and $7.4 million for the six months ended July 4, 2015 and June 28, 2014, resulting in effective tax rates of 10.5% and 24.9%, respectively. The effective tax rate for both the three months and six months ended July 4, 2015 decreased from the prior periods, primarily due to an increase in the foreign tax rate benefit in the current periods resulting from the completion of payments related to an intercompany licensing transaction. For the six months ended July 4, 2015, the decrease in the effective tax rate was partially offset by the release during the prior period of unrecognized tax benefits related to an uncertain tax position that was closed by statute. At July 4, 2015, the Company had gross unrecognized tax benefits of $3.9 million, all of which would affect the effective tax rate if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. The Company believes it is reasonably possible that the gross unrecognized tax benefits will decrease by approximately $0.6 million in the next 12 months due to the lapse of the statute of limitations applicable to a tax deduction claimed on a prior year foreign tax return. The tax years 2010 through 2015 remain open to examination by the major taxing jurisdictions to which the Company is subject. The Company is not currently under audit in any major taxing jurisdiction.

Subsequent Event

Subsequent Event	6 Months Ended
	Jul. 04, 2015
Subsequent Event.
Subsequent Event	14. Subsequent Event On July 24, 2015, the Company amended its Credit Agreement, which consisted of a $100 million Term Loan Facility and a $130 million Revolving Credit Facility. The amended Credit Agreement (the “Amended Agreement”) consists of a $300 million five-year Revolving Credit Facility. The Company has an option to increase the size of the Revolving Credit Facility by up to an aggregate of $200 million in additional commitments, subject to certain conditions. On July 24, 2015, the Company borrowed $82.5 million under the Revolving Credit Facility of the Amended Agreement. The Company used the proceeds to pay the remaining balance of its Term Loan Facility.

Significant Accounting Polici21

Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 04, 2015
Significant Accounting Policies
Reclassifications	Reclassifications Certain reclassifications have been made to prior year financial statements to conform to current year presentation.
Revenue Recognition	Revenue Recognition Revenues are generated predominately by sales of the Company’s integrated circuits (ICs). The Company recognizes revenue when all of the following criteria are met: 1) there is persuasive evidence that an arrangement exists, 2) delivery of goods has occurred, 3) the sales price is fixed or determinable, and 4) collectibility is reasonably assured. Generally, revenue from product sales to direct customers and contract manufacturers is recognized upon shipment. A portion of the Company’s sales are made to distributors under agreements allowing certain rights of return and price protection related to the final selling price to the end customers. Accordingly, the Company defers revenue and cost of revenue on such sales until the distributors sell the product to the end customers. The net balance of deferred revenue less deferred cost of revenue associated with inventory shipped to a distributor but not yet sold to an end customer is recorded in the deferred income on shipments to distributors liability on the Consolidated Balance Sheet. Such net deferred income balance reflects the Company’s estimate of the impact of rights of return and price protection. A small portion of the Company’s revenues is derived from the sale of patents. The above revenue recognition criteria for patent sales are generally met upon the execution of the patent sale agreement.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jul. 04, 2015
Earnings Per Share
Schedule of computation of basic and diluted earnings per share	The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Net income $ 7,575 $ 14,279 $ 13,953 $ 22,389 Shares used in computing basic earnings per share 42,823 43,462 42,617 43,271 Effect of dilutive securities: Stock options and other stock-based awards 638 756 688 866 Shares used in computing diluted earnings per share 43,461 44,218 43,305 44,137 Earnings per share: Basic $ 0.18 $ 0.33 $ 0.33 $ 0.52 Diluted $ 0.17 $ 0.32 $ 0.32 $ 0.51

Cash, Cash Equivalents and In23

Cash, Cash Equivalents and Investments (Tables)	6 Months Ended
	Jul. 04, 2015
Cash, Cash Equivalents and Investments
Schedule of cash, cash equivalents, and investments	The Company’s cash, cash equivalents and investments consisted of the following (in thousands): July 4, 2015 Cost Gross Gross Fair Value Cash and Cash Equivalents: Cash on hand $ 65,449 $ — $ — $ 65,449 Available-for-sale securities: Money market funds 43,689 — — 43,689 Commercial paper 9,823 — — 9,823 Certificates of deposit 5,547 — — 5,547 Municipal bonds 543 — — 543 Total available-for-sale securities 59,602 — — 59,602 Total cash and cash equivalents $ 125,051 $ — $ — $ 125,051 Short-term Investments: Available-for-sale securities: Municipal bonds $ 122,148 $ (45 ) $ 96 $ 122,199 Variable-rate demand notes 14,495 — — 14,495 Corporate bonds 7,431 (6 ) 1 7,426 International government bonds 2,240 (3 ) — 2,237 Commercial paper 1,199 — — 1,199 Total short-term investments $ 147,513 $ (54 ) $ 97 $ 147,556 Long-term Investments: Available-for-sale securities: Auction rate securities $ 8,000 $ (821 ) $ — $ 7,179 Total long-term investments $ 8,000 $ (821 ) $ — $ 7,179 January 3, 2015 Cost Gross Gross Fair Value Cash and Cash Equivalents: Cash on hand $ 52,144 $ — $ — $ 52,144 Available-for-sale securities: Money market funds 71,415 — — 71,415 Certificates of deposit 7,739 — — 7,739 Commercial paper 5,348 — — 5,348 Municipal bonds 1,756 — 1 1,757 U.S. government agency 1,202 — — 1,202 Corporate bonds 1,101 — — 1,101 U.S. government bonds 1,000 — — 1,000 Total available-for-sale securities 89,561 — 1 89,562 Total cash and cash equivalents $ 141,705 $ — $ 1 $ 141,706 Short-term Investments: Available-for-sale securities: Municipal bonds $ 129,005 $ (25 ) $ 172 $ 129,152 Corporate bonds 33,043 (35 ) 25 33,033 Variable-rate demand notes 12,915 — — 12,915 Commercial paper 8,995 — — 8,995 Asset-backed securities 5,380 (3 ) — 5,377 International government bonds 2,526 (10 ) — 2,516 U.S. government bonds 650 — — 650 U.S. government agency 601 — — 601 Certificates of deposit 250 — — 250 Total short-term investments $ 193,365 $ (73 ) $ 197 $ 193,489 Long-term Investments: Available-for-sale securities: Auction rate securities $ 8,000 $ (581 ) $ — $ 7,419 Total long-term investments $ 8,000 $ (581 ) $ — $ 7,419
Schedule of available-for-sale investments in continuous unrealized loss position by length of time	The available-for-sale investments that were in a continuous unrealized loss position, aggregated by length of time that individual securities have been in a continuous loss position, were as follows (in thousands): Less Than 12 Months 12 Months or Greater Total As of July 4, 2015 Fair Gross Fair Gross Fair Gross Municipal bonds $ 26,686 $ (45 ) $ — $ — $ 26,686 $ (45 ) Auction rate securities — — 7,179 (821 ) 7,179 (821 ) Corporate bonds 6,315 (6 ) — — 6,315 (6 ) International government bonds 2,237 (3 ) — — 2,237 (3 ) $ 35,238 $ (54 ) $ 7,179 $ (821 ) $ 42,417 $ (875 ) Less Than 12 Months 12 Months or Greater Total As of January 3, 2015 Fair Gross Fair Gross Fair Gross Municipal bonds $ 23,735 $ (25 ) $ — $ — $ 23,735 $ (25 ) Corporate bonds 20,327 (35 ) — — 20,327 (35 ) Auction rate securities — — 7,419 (581 ) 7,419 (581 ) Asset-backed securities 5,080 (3 ) — — 5,080 (3 ) International government bond 2,516 (10 ) — — 2,516 (10 ) $ 51,658 $ (73 ) $ 7,419 $ (581 ) $ 59,077 $ (654 )
Summarization of contractual underlying maturities of available-for-sale investments	The following summarizes the contractual underlying maturities of the Company’s available-for-sale investments at July 4, 2015 (in thousands): Cost Fair Due in one year or less $ 157,646 $ 157,704 Due after one year through ten years 37,754 37,739 Due after ten years 19,715 18,894 $ 215,115 $ 214,337

Derivative Financial Instrume24

Derivative Financial Instruments (Tables)	6 Months Ended
	Jul. 04, 2015
Derivative Financial Instruments
Schedule of derivative financial instrument	The Company’s derivative financial instrument in cash flow hedging relationships consisted of the following (in thousands): Fair Value Balance Sheet Location July 4, January 3, Interest rate swap Other assets, net $ — $ 331 Other non-current liabilities 35 —
Schedule of before-tax effect of derivative instruments in cash flow hedging relationships	The before-tax effect of derivative instruments in cash flow hedging relationships was as follows (in thousands): Gain (Loss) Recognized in Location of Loss Loss Reclassified Three Months Ended Three Months Ended July 4, June 28, July 4, June 28, Interest rate swaps $ 50 $ (486 ) Interest expense $ (81 ) $ (143 ) Six Months Ended Six Months Ended July 4, June 28, July 4, June 28, Interest rate swaps $ (576 ) $ (627 ) Interest expense $ (211 ) $ (286 )
Schedule of before-tax effect of derivative instruments not designated as hedging instruments	The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands): Three Months Ended Six Months Ended Gain (Loss) Recognized in Income July 4, June 28, July 4, June 28, Location Foreign currency forward contracts $ (104 ) $ — $ 446 $ — Other income (expense), net

Fair Value of Financial Instr25

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jul. 04, 2015
Fair Value of Financial Instruments
Financial assets and liabilities measured at fair value on a recurring basis	The following summarizes the valuation of the Company’s financial instruments (in thousands) Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash Equivalents: Money market funds $ 43,689 $ — $ — $ 43,689 Corporate bonds — 9,823 — 9,823 Certificates of deposit — 5,547 — 5,547 Municipal bonds — 543 — 543 Total cash equivalents $ 43,689 $ 15,913 $ — $ 59,602 Short-term Investments: Municipal bonds $ — $ 122,199 $ — $ 122,199 Variable-rate demand notes — 14,495 — 14,495 Corporate bonds — 7,426 — 7,426 International government bonds — 2,237 — 2,237 Commercial paper — 1,199 — 1,199 Total short-term investments $ — $ 147,556 $ — $ 147,556 Long-term Investments: Auction rate securities $ — $ — $ 7,179 $ 7,179 Total long-term investments $ — $ — $ 7,179 $ 7,179 Total $ 43,689 $ 163,469 $ 7,179 $ 214,337 Liabilities: Accrued expenses: Contingent consideration $ — $ — $ 3,965 $ 3,965 Other non-current liabilities: Contingent consideration $ — $ — $ 11,127 $ 11,127 Derivative instruments — 35 — 35 $ — $ 35 $ 11,127 $ 11,162 Total $ — $ 35 $ 15,092 $ 15,127 Fair Value Measurements Description Quoted Prices in Significant Other Significant Total Assets: Cash Equivalents: Money market funds $ 71,415 $ — $ — $ 71,415 Certificates of deposit — 7,739 — 7,739 Commercial paper — 5,348 — 5,348 Municipal bonds — 1,757 — 1,757 U.S. government agency — 1,202 — 1,202 Corporate bonds — 1,101 — 1,101 U.S. government bonds 1,000 — — 1,000 Total cash equivalents $ 72,415 $ 17,147 $ — $ 89,562 Short-term Investments: Municipal bonds $ — $ 129,152 $ — $ 129,152 Corporate bonds — 33,033 — 33,033 Variable-rate demand notes — 12,915 — 12,915 Commercial paper — 8,995 — 8,995 Asset-backed securities — 5,377 — 5,377 International government bonds — 2,516 — 2,516 U.S. government bond 650 — — 650 U.S. government agency — 601 — 601 Certificates of deposit — 250 — 250 Total short-term investments $ 650 $ 192,839 $ — $ 193,489 Long-term Investments: Auction rate securities $ — $ — $ 7,419 $ 7,419 Total long-term investments $ — $ — $ 7,419 $ 7,419 Other assets, net: Derivative instruments $ — $ 331 $ — $ 331 Total $ — $ 331 $ — $ 331 Total $ 73,065 $ 210,317 $ 7,419 $ 290,801 Liabilities: Accrued expenses: Contingent consideration $ — $ — $ 4,288 $ 4,288 Other non-current liabilities: Contingent consideration $ — $ — $ 14,150 $ 14,150 Total $ — $ — $ 18,438 $ 18,438
Summary of quantitative information about level 3 asset fair value measurements	Fair Value at Valuation Technique Unobservable Input Weighted Average $ 7,179 Discounted cash flow Estimated yield 0.86% Expected holding period 10 years Estimated discount rate 3.64%
Summary of quantitative information about level 3 liability fair value measurements	Fair Value at Valuation Technique Unobservable Input Range $ 15,092 Monte Carlo simulation Expected revenue growth rate 40.8% – 71.9% Expected revenue volatility 20.0% Expected term 0.5 years – 3.5 years Estimated discount rate 0.22% – 1.57%
Summary of activity in Level 3 financial instruments	The following summarizes the activity in Level 3 financial instruments for the three and six months ended July 4, 2015 (in thousands): Assets Auction Rate Securities Three Months Six Months Beginning balance $ 7,401 $ 7,419 Loss included in other comprehensive income (loss) (222 ) (240 ) Balance at July 4, 2015 $ 7,179 $ 7,179 Liabilities Contingent Consideration (1) Three Months Six Months Beginning balance $ 14,804 $ 18,438 Settlements — (4,464 ) Loss recognized in earnings (2) 288 1,118 Balance at July 4, 2015 $ 15,092 $ 15,092 Net loss for the period included in earnings attributable to contingent consideration held at the end of the period: $ (288 ) $ (1,118 ) (1) (2)

Balance Sheet Details (Tables)

Balance Sheet Details (Tables)	6 Months Ended
	Jul. 04, 2015
Balance Sheet Details
Inventories	The following shows the details of selected Condensed Consolidated Balance Sheet items (in thousands): Inventories July 4, January 3, Work in progress $ 46,137 $ 40,640 Finished goods 14,609 11,991 $ 60,746 $ 52,631

Acquisitions (Tables)

Acquisitions (Tables)	6 Months Ended
	Jul. 04, 2015
Acquisitions
Schedule of purchase price allocation	The purchase price was allocated as follows (in thousands): Amount Weighted-Average Intangible assets: In-process research and development $ 5,710 Not amortized Developed technology 12,190 8 Customer relationships 6,670 4 Trademarks 880 3 25,450 Cash and cash equivalents 1,132 Other current assets 6,156 Goodwill 35,145 Other non-current assets 208 Current liabilities (3,289 ) Non-current deferred tax liabilities, net (4,328 ) Long-term debt (2,232 ) Other non-current liabilities (220 ) Total purchase price $ 58,022

Debt (Tables)

Debt (Tables)	6 Months Ended
	Jul. 04, 2015
Debt
Schedule of remaining contractual maturities of the Term Loan Facility	As of July 4, 2015, the remaining contractual maturities of the Term Loan Facility were as follows (in thousands): Fiscal Year 2015 $ 5,000 2016 10,000 2017 67,500 Total $ 82,500

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jul. 04, 2015
Stockholders' Equity
Schedule of share repurchase programs	The Board of Directors authorized the following share repurchase programs (in thousands): Program Authorization Date Program Program October 2014 December 2015 $ 100,000 January 2014 January 2015 $ 100,000 January 2013 January 2014 $ 50,000
Schedule of components of accumulated other comprehensive loss, net of taxes	The components of accumulated other comprehensive loss, net of taxes, were as follows (in thousands): Unrealized Gain Net Unrealized Losses Total Balance at January 3, 2015 $ 215 $ (297 ) $ (82 ) Other comprehensive loss before reclassifications (374 ) (216 ) (590 ) Amount reclassified from accumulated other comprehensive loss 137 6 143 Net change for the period (237 ) (210 ) (447 ) Balance at July 4, 2015 $ (22 ) $ (507 ) $ (529 )
Schedule of Reclassifications From Accumulated Other Comprehensive Loss	Three Months Ended Six Months Ended Reclassification (in thousands) July 4, June 28, July 4, June 28, Losses on cash flow hedges to: Interest expense $ (81 ) $ (143 ) $ (211 ) $ (286 ) Losses on available-for-sale securities to: Interest income — — (10 ) — (81 ) (143 ) (221 ) (286 ) Income tax benefit 28 50 78 100 Total reclassifications $ (53 ) $ (93 ) $ (143 ) $ (186 )

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jul. 04, 2015
Stock-Based Compensation
Schedule of stock-based compensation costs recognized in the Consolidated Statements of Income	The following table presents details of stock-based compensation costs recognized in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Six Months Ended July 4, June 28, July 4, June 28, Cost of revenues $ 229 $ 178 $ 459 $ 374 Research and development 4,960 4,327 9,755 8,568 Selling, general and administrative 5,868 4,777 11,362 9,617 11,057 9,282 21,576 18,559 Income tax benefit 1,182 587 2,486 1,898 $ 9,875 $ 8,695 $ 19,090 $ 16,661

Significant Accounting Polici31

Significant Accounting Policies (Details)	6 Months Ended	12 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Basis of Presentation and Principles of Consolidation
Length of fiscal year	364 days	371 days
Number of days in each fiscal quarter for 52-week fiscal year	91 days
Low end of range
Basis of Presentation and Principles of Consolidation
Length of fiscal year	364 days
High end of range
Basis of Presentation and Principles of Consolidation
Length of fiscal year	371 days

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Earnings Per Share
Net income	$ 7,575	$ 14,279	$ 13,953	$ 22,389
Shares used in computing basic earnings per share	42,823	43,462	42,617	43,271
Effect of dilutive securities:
Stock options and other stock-based awards (in shares)	638	756	688	866
Shares used in computing diluted earnings per share	43,461	44,218	43,305	44,137
Earnings per share:
Basic (in dollars per share)	$ 0.18	$ 0.33	$ 0.33	$ 0.52
Diluted (in dollars per share)	$ 0.17	$ 0.32	$ 0.32	$ 0.51
Shares excluded from computation of diluted earning per share	100	100	100	200

Cash, Cash Equivalents and In33

Cash, Cash Equivalents and Investments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Available-for-sale securities
Available-for-sale securities, Cost	$ 215,115
Cash, cash equivalents and investments
Auction-rate securities guaranteed by the U.S. government	6,000
Auction-rate securities privately insured	2,000
Auction-rate securities having credit rating 'AA'	6,000
Auction-rate securities having credit rating 'A'	2,000
Other-than-temporary impairment losses	0
Cash on hand, Cost	65,449	$ 52,144
Cash on hand, Fair Value	65,449	52,144
Cash and cash equivalents, Cost	125,051	141,705
Cash and cash equivalents, Gross Unrealized Gains		1
Cash and cash equivalents, Fair Value	125,051	141,706
Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	59,602	89,561
Available-for-sale securities, Gross Unrealized Gains		1
Available-for-sale securities, Fair Value	59,602	89,562
Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	147,513	193,365
Available-for-sale securities, Gross Unrealized Losses	(54)	(73)
Available-for-sale securities, Gross Unrealized Gains	97	197
Available-for-sale securities, Fair Value	147,556	193,489
Long-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	8,000	8,000
Available-for-sale securities, Gross Unrealized Losses	(821)	(581)
Available-for-sale securities, Fair Value	7,179	7,419
Money market funds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	43,689	71,415
Available-for-sale securities, Fair Value	43,689	71,415
Municipal bonds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	543	1,756
Available-for-sale securities, Gross Unrealized Gains		1
Available-for-sale securities, Fair Value	543	1,757
Municipal bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	122,148	129,005
Available-for-sale securities, Gross Unrealized Losses	(45)	(25)
Available-for-sale securities, Gross Unrealized Gains	96	172
Available-for-sale securities, Fair Value	122,199	129,152
Variable-rate demand notes | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	14,495	12,915
Available-for-sale securities, Fair Value	14,495	12,915
Corporate bonds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost		1,101
Available-for-sale securities, Fair Value		1,101
Corporate bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	7,431	33,043
Available-for-sale securities, Gross Unrealized Losses	(6)	(35)
Available-for-sale securities, Gross Unrealized Gains	1	25
Available-for-sale securities, Fair Value	7,426	33,033
International government bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	2,240	2,526
Available-for-sale securities, Gross Unrealized Losses	(3)	(10)
Available-for-sale securities, Fair Value	2,237	2,516
Commercial paper | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	9,823	5,348
Available-for-sale securities, Fair Value	9,823	5,348
Commercial paper | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	1,199	8,995
Available-for-sale securities, Fair Value	1,199	8,995
Certificates of deposit | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost	5,547	7,739
Available-for-sale securities, Fair Value	5,547	7,739
Certificates of deposit | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		250
Available-for-sale securities, Fair Value		250
US government agency | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost		1,202
Available-for-sale securities, Fair Value		1,202
US government agency | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		601
Available-for-sale securities, Fair Value		601
U.S. government bonds | Cash Equivalents:
Available-for-sale securities
Available-for-sale securities, Cost		1,000
Available-for-sale securities, Fair Value		1,000
U.S. government bonds | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		650
Available-for-sale securities, Fair Value		650
Asset-backed securities | Short-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost		5,380
Available-for-sale securities, Gross Unrealized Losses		(3)
Available-for-sale securities, Fair Value		5,377
Auction rate securities | Long-term Investments:
Available-for-sale securities
Available-for-sale securities, Cost	8,000	8,000
Available-for-sale securities, Gross Unrealized Losses	(821)	(581)
Available-for-sale securities, Fair Value	$ 7,179	$ 7,419

Cash, Cash Equivalents and In34

Cash, Cash Equivalents and Investments (Details 2) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	$ 35,238	$ 51,658
Fair value of available-for-sale securities, continuous loss position for twelve months or longer	7,179	7,419
Total fair value of available-for-sale securities, continuous loss position	42,417	59,077
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(54)	(73)
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(821)	(581)
Available-for-sale securities, total gross unrealized losses	(875)	(654)
Cost
Due in one year or less, Cost	157,646
Due after one year through ten years, Cost	37,754
Due after ten years, Cost	19,715
Total Cost	215,115
Fair Value
Due in one year or less, Fair Value	157,704
Due after one year through ten years, Fair Value	37,739
Due after ten years, Fair Value	18,894
Total Fair Value	214,337
Municipal bonds
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	26,686	23,735
Total fair value of available-for-sale securities, continuous loss position	26,686	23,735
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(45)	(25)
Available-for-sale securities, total gross unrealized losses	(45)	(25)
Corporate bonds
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	6,315	20,327
Total fair value of available-for-sale securities, continuous loss position	6,315	20,327
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(6)	(35)
Available-for-sale securities, total gross unrealized losses	(6)	(35)
Auction rate securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for twelve months or longer	7,179	7,419
Total fair value of available-for-sale securities, continuous loss position	7,179	7,419
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for 12 months or greater, gross unrealized losses	(821)	(581)
Available-for-sale securities, total gross unrealized losses	(821)	(581)
Asset-backed securities
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months		5,080
Total fair value of available-for-sale securities, continuous loss position		5,080
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses		(3)
Available-for-sale securities, total gross unrealized losses		(3)
International government bonds
Continuous unrealized loss position, Fair Value
Fair value of available-for-sale securities, continuous loss position for less than twelve months	2,237	2,516
Total fair value of available-for-sale securities, continuous loss position	2,237	2,516
Continuous unrealized loss position, Gross Unrealized Losses
Available-for-sale securities, continuous loss position for less than 12 months, gross unrealized losses	(3)	(10)
Available-for-sale securities, total gross unrealized losses	$ (3)	$ (10)

Derivative Financial Instrume35

Derivative Financial Instruments (Details) $ in Millions	Jul. 04, 2015USD ($)
Cash flow hedges | Interest rate swaps
Notional amount
Original notional value	$ 100

Derivative Financial Instrume36

Derivative Financial Instruments (Details 2) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Derivative financial instrument
Gains or losses from the hedging instrument which was excluded from the assessment of effectiveness	$ 0
Other assets, net
Derivative financial instrument
Fair value of interest rate swap		$ 331
Other non-current liabilities:
Derivative financial instrument
Fair value of interest rate swap	$ 35

Derivative Financial Instrume37

Derivative Financial Instruments (Details 3) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015USD ($)contract	Jun. 28, 2014USD ($)contract	Jul. 04, 2015USD ($)contract	Jun. 28, 2014USD ($)contract
Derivative Instruments, Gain (Loss)
Reclassification of interest rate swap losses included in accumulated other comprehensive loss into earnings in the next 12 months	$ 300		$ 300
Not Designated as Hedging Instrument | Foreign currency forward contracts
Derivative Instruments, Gain (Loss)
Number of foreign currency forward contract held | contract	1	0	1	0
Original notional value	$ 5,700		$ 5,700
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other income (expense), net
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in Income	(104)		446
Cash flow hedges | Interest rate swaps
Derivative Instruments, Gain (Loss)
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) during period	50	$ (486)	(576)	$ (627)
Original notional value	100,000		100,000
Cash flow hedges | Interest rate swaps | Interest expense
Derivative Instruments, Gain (Loss)
Loss Reclassified from Accumulated OCI into Income (Effective Portion), included in rent and interest expense during period	$ (81)	$ (143)	$ (211)	$ (286)

Fair Value of Financial Instr38

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	$ 125,051	$ 141,706
Total short-term investments	147,556	193,489
Total long-term investments	7,179	7,419
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	43,689	72,415
Total short-term investments		650
Total assets at fair value	43,689	73,065
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	43,689	71,415
Assets and liabilities measured at fair value on recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		1,000
Total short-term investments		650
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2)
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	15,913	17,147
Total short-term investments	147,556	192,839
Derivative instruments		331
Other assets, net		331
Total assets at fair value	163,469	210,317
Total liabilities at fair value	35
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Other non-current liabilities:
Financial assets and liabilities measured at fair value on a recurring basis
Derivative instruments	35
Total liabilities at fair value	35
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Certificates of deposit
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	5,547	7,739
Total short-term investments		250
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		5,348
Total short-term investments	1,199	8,995
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Municipal bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	543	1,757
Total short-term investments	122,199	129,152
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Variable-rate demand notes
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	14,495	12,915
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Asset-backed securities
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		5,377
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | International government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	2,237	2,516
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | US government agency
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		1,202
Total short-term investments		601
Assets and liabilities measured at fair value on recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	9,823	1,101
Total short-term investments	7,426	33,033
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3)
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	7,179	7,419
Total assets at fair value	7,179	7,419
Total liabilities at fair value	15,092	18,438
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Accrued expenses:
Financial assets and liabilities measured at fair value on a recurring basis
Contingent consideration	3,965	4,288
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Other non-current liabilities:
Financial assets and liabilities measured at fair value on a recurring basis
Contingent consideration	11,127	14,150
Total liabilities at fair value	11,127
Assets and liabilities measured at fair value on recurring basis | Significant Unobservable Inputs (Level 3) | Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	7,179	7,419
Assets and liabilities measured at fair value on recurring basis | Fair Value
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	59,602	89,562
Total short-term investments	147,556	193,489
Total long-term investments	7,179	7,419
Derivative instruments		331
Other assets, net		331
Total assets at fair value	214,337	290,801
Total liabilities at fair value	15,127	18,438
Assets and liabilities measured at fair value on recurring basis | Fair Value | Accrued expenses:
Financial assets and liabilities measured at fair value on a recurring basis
Contingent consideration	3,965	4,288
Assets and liabilities measured at fair value on recurring basis | Fair Value | Other non-current liabilities:
Financial assets and liabilities measured at fair value on a recurring basis
Contingent consideration	11,127	14,150
Derivative instruments	35
Total liabilities at fair value	11,162
Assets and liabilities measured at fair value on recurring basis | Fair Value | Money market funds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	43,689	71,415
Assets and liabilities measured at fair value on recurring basis | Fair Value | Certificates of deposit
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	5,547	7,739
Total short-term investments		250
Assets and liabilities measured at fair value on recurring basis | Fair Value | Commercial paper
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		5,348
Total short-term investments	1,199	8,995
Assets and liabilities measured at fair value on recurring basis | Fair Value | Municipal bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	543	1,757
Total short-term investments	122,199	129,152
Assets and liabilities measured at fair value on recurring basis | Fair Value | Variable-rate demand notes
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	14,495	12,915
Assets and liabilities measured at fair value on recurring basis | Fair Value | Asset-backed securities
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments		5,377
Assets and liabilities measured at fair value on recurring basis | Fair Value | International government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total short-term investments	2,237	2,516
Assets and liabilities measured at fair value on recurring basis | Fair Value | US government agency
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		1,202
Total short-term investments		601
Assets and liabilities measured at fair value on recurring basis | Fair Value | Corporate bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents	9,823	1,101
Total short-term investments	7,426	33,033
Assets and liabilities measured at fair value on recurring basis | Fair Value | U.S. government bonds
Financial assets and liabilities measured at fair value on a recurring basis
Total cash equivalents		1,000
Total short-term investments		650
Assets and liabilities measured at fair value on recurring basis | Fair Value | Auction rate securities
Financial assets and liabilities measured at fair value on a recurring basis
Total long-term investments	$ 7,179	$ 7,419

Fair Value of Financial Instr39

Fair Value of Financial Instruments (Details 2) - 6 months ended Jul. 04, 2015 - Auction rate securities - Weighted Average - Discounted cash flow	Total
Quantitative information for Level 3 Fair Value Measurements Assets
Estimated yield (as a percent)	0.86%
Expected holding period	10 years
Estimated discount rate (as a percent)	3.64%

Fair Value of Financial Instr40

Fair Value of Financial Instruments (Details 3) - 6 months ended Jul. 04, 2015 - Contingent consideration - Monte Carlo simulation	Total
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue volatility (as a percent)	20.00%
Low end of range
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue growth rate (as a percent)	40.80%
Expected term	6 months
Estimated discount rate (as a percent)	0.22%
High end of range
Quantitative information for Level 3 fair value measurements liabilities
Expected revenue growth rate (as a percent)	71.90%
Expected term	3 years 6 months
Estimated discount rate (as a percent)	1.57%

Fair Value of Financial Instr41

Fair Value of Financial Instruments (Details 4) - Jul. 04, 2015 - Assets and liabilities measured at fair value on recurring basis - Auction rate securities - USD ($) $ in Thousands	Total	Total
Fair value assets reconciliation of changes
Balance at the beginning of the period	$ 7,401	$ 7,419
Loss included in other comprehensive income (loss)	(222)	(240)
Balance at the end of the period	$ 7,179	$ 7,179

Fair Value of Financial Instr42

Fair Value of Financial Instruments (Details 5) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 04, 2015	Jul. 04, 2015	Jan. 03, 2015
Term Loan Facility
Fair value liabilities reconciliation of changes
Fair value of debt	$ 82,500	$ 82,500	$ 87,400
Assets and liabilities measured at fair value on recurring basis | Contingent consideration
Fair value liabilities reconciliation of changes
Balance at the beginning of the period	14,804	18,438
Settlements		(4,464)
Loss recognized in earnings	288	1,118
Balance at the end of the period	15,092	15,092
Net loss for the period included in earnings attributable to contingent consideration held at the end of the period:	$ (288)	$ (1,118)

Balance Sheet Details (Details)

Balance Sheet Details (Details) - USD ($) $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
Inventories
Work in progress	$ 46,137	$ 40,640
Finished goods	14,609	11,991
Total inventories	$ 60,746	$ 52,631

Acquisitions (Details)

Acquisitions (Details) - USD ($)	Jan. 30, 2015	Jul. 01, 2013	Apr. 04, 2015	Jul. 04, 2015	Jan. 03, 2015
Acquisition
Payment of earn-out for the first annual period				$ 4,464,000
Purchase price allocation
Goodwill				263,925,000	$ 228,781,000
Bluegiga
Acquisition
Cash consideration	$ 58,000,000
Amount of initial consideration held in escrow by the company as security for breaches of representations and warranties and certain other expressly enumerated matters	9,400,000
Purchase price allocation
Intangible assets	25,450,000
Cash and cash equivalents	1,132,000
Other current assets	6,156,000
Goodwill	35,145,000
Other non-current assets	208,000
Current liabilities	(3,289,000)
Non-current deferred tax liabilities, net	(4,328,000)
Long-term debt	(2,232,000)
Other non-current liabilities	(220,000)
Total purchase price	$ 58,022,000
Acquisition-related costs recorded in selling, general and administrative expenses				$ 1,200,000
Discount rate applicable to the cash flows (as a percent)	16.10%
Bluegiga | Developed technology
Purchase price allocation
Intangible assets	$ 12,190,000
Weighted-Average Amortization Period	8 years
Bluegiga | Customer relationships
Purchase price allocation
Intangible assets	$ 6,670,000
Weighted-Average Amortization Period	4 years
Bluegiga | Trademarks
Purchase price allocation
Intangible assets	$ 880,000
Weighted-Average Amortization Period	3 years
Bluegiga | In-process research and development
Purchase price allocation
Intangible assets	$ 5,710,000
Energy Micro
Acquisition
Cash consideration			$ 20,000,000
Purchase price of acquisition		$ 140,600,000
Initial consideration		107,400,000
Deferred consideration in the form of a promissory note, fair value		19,200,000
Earn-Out, fair value		$ 14,000,000
Earn out period		5 years
Maximum annual Earn-Out payment		$ 6,666,666
Minimum revenue in single fiscal year from Earn-Out products required to make the entire Earn-Out amount payable		400,000,000
Amount of initial consideration held in escrow by the company as security for breaches of representations and warranties and certain other expressly enumerated matters		$ 20,300,000
Percentage of Earn-Out contingent on the continued employment of certain key employees		28.76%
Period of continued employment of key employees for calculating Earn-out portion following acquisition date		3 years
Payment of earn-out for the first annual period			6,300,000
Earn-out payment representing the Departure Percentage portion and recorded as compensation expense			1,800,000
Remaining Earn-out payment representing additional consideration			$ 4,500,000

Debt (Details)

Debt (Details) $ in Thousands	Jul. 24, 2015USD ($)	Jul. 31, 2012USD ($)	Jul. 04, 2015USD ($)	Jan. 30, 2015USD ($)	Sep. 27, 2012USD ($)
Bluegiga
Debt
Debt in connection with acquisition				$ 2,232
Debt instrument, interest rate, minimum			1.00%
Debt instrument, interest rate, maximum			3.00%
Term Loan Facility
Debt
Maximum borrowing capacity		$ 100,000	$ 100,000
Percentage of principal amortization in each of the first two years		5.00%
Number of years for which the percentage of principal amortization is five percent		2 years
Percentage of principal amortization in each of the next three years		10.00%
Number of years for which the percentage of principal amortization is ten percent		3 years
Amount borrowed under the term loan facility					$ 100,000
Fixed interest rate percentage			0.764%
Combined interest rate percentage			2.514%
Term Loan Facility
2,015			$ 5,000
2,016			10,000
2,017			67,500
Total debt			$ 82,500
Agreement
Debt
Maximum borrowing capacity		$ 230,000
Term of debt instrument		5 years
Maximum leverage ratio			2.5
Minimum fixed charge coverage ratio			1.50
Revolving Credit Facility
Debt
Maximum borrowing capacity	$ 300,000	$ 130,000	$ 130,000
Term of debt instrument	5 years
Sublimit on letters of credit		25,000
Sublimit on swingline loan		10,000
Additional increase in borrowing capacity of the line of credit available at the entity's option		$ 50,000
Term loan facility and revolving credit facility, other than swingline loans | LIBOR | Low end of range
Debt
Interest rate added to the base rate (as a percent)			1.50%
Term loan facility and revolving credit facility, other than swingline loans | LIBOR | High end of range
Debt
Interest rate added to the base rate (as a percent)			2.50%
Term loan facility and revolving credit facility, other than swingline loans | Federal Funds
Debt
Interest rate added to the base rate (as a percent)			0.50%
Term loan facility and revolving credit facility, other than swingline loans | one-month LIBOR
Debt
Interest rate added to the base rate (as a percent)			1.00%
Term loan facility, revolving credit facility, swingline and other loans | Base rate | Low end of range
Debt
Interest rate added to the base rate (as a percent)			0.50%
Term loan facility, revolving credit facility, swingline and other loans | Base rate | High end of range
Debt
Interest rate added to the base rate (as a percent)			1.50%

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Oct. 31, 2014	Jan. 31, 2014	Jan. 31, 2013
Number of shares of common stock issued			0.9
Components of accumulated other comprehensive loss, net of taxes
Balance at beginning of the period			$ (82)
Other comprehensive loss before reclassifications			(590)
Amounts reclassified from accumulated other comprehensive loss			143
Other comprehensive income (loss)	$ (118)	$ (185)	(447)	$ 85
Balance at end of the period	(529)		$ (529)
Repurchase of common stock (in shares)			0.2	0.2
Repurchase of common stock			$ 10,400	$ 11,000
Unrealized Gain on Cash Flow Hedge
Components of accumulated other comprehensive loss, net of taxes
Balance at beginning of the period			215
Other comprehensive loss before reclassifications			(374)
Amounts reclassified from accumulated other comprehensive loss			137
Other comprehensive income (loss)			(237)
Balance at end of the period	(22)		(22)
Net Unrealized Losses on Available-For-Sale Securities
Components of accumulated other comprehensive loss, net of taxes
Balance at beginning of the period			(297)
Other comprehensive loss before reclassifications			(216)
Amounts reclassified from accumulated other comprehensive loss			6
Other comprehensive income (loss)			(210)
Balance at end of the period	$ (507)		$ (507)
High end of range
Program Amount authorized to repurchase					$ 100,000	$ 100,000	$ 50,000

Stockholders' Equity (Details 2

Stockholders' Equity (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Amounts Reclassified from AOCI
Interest expense	$ (728)	$ (780)	$ (1,473)	$ (1,578)
Income before income taxes	8,531	20,216	15,598	29,796
Income tax benefit	(956)	(5,937)	(1,645)	(7,407)
Net income	7,575	14,279	13,953	22,389
Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Income before income taxes	(81)	(143)	(221)	(286)
Income tax benefit	28	50	78	100
Net income	(53)	(93)	(143)	(186)
Unrealized Gain on Cash Flow Hedge | Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Interest expense	$ (81)	$ (143)	(211)	$ (286)
Net Unrealized Losses on Available-For-Sale Securities | Reclassifications From Accumulated Other Comprehensive Loss
Amounts Reclassified from AOCI
Interest income			$ (10)

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Stock-based compensation costs
Share based compensation cost before tax	$ 11,057	$ 9,282	$ 21,576	$ 18,559
Income tax benefit	1,182	587	2,486	1,898
Share based compensation cost after tax	9,875	8,695	19,090	16,661
Total unrecognized compensation costs related to awards	66,200		$ 66,200
Weighted-average period of recognition of unrecognized compensation costs			2 years 2 months 12 days
Cost of revenues
Stock-based compensation costs
Share based compensation cost before tax	229	178	$ 459	374
Research and development
Stock-based compensation costs
Share based compensation cost before tax	4,960	4,327	9,755	8,568
Selling, general and administrative
Stock-based compensation costs
Share based compensation cost before tax	$ 5,868	$ 4,777	$ 11,362	$ 9,617

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	Jul. 01, 2013	Apr. 04, 2015	Jul. 04, 2015
Related Party Transaction
Payment of the fiscal 2014 earn-out			$ 4,464
Energy Micro
Related Party Transaction
Cash consideration		$ 20,000
Payment of the fiscal 2014 earn-out		6,300
Contingent consideration		26,700
Mr. Forre | Energy Micro
Related Party Transaction
Beneficial ownership percentage	30.00%
Cash consideration	$ 35,000	6,100
Payment of the fiscal 2014 earn-out		1,900
Contingent consideration		8,100
Mr. Bogen | Energy Micro
Related Party Transaction
Beneficial ownership percentage	2.00%
Cash consideration	$ 900	400
Payment of the fiscal 2014 earn-out		100
Contingent consideration		$ 500
Investment in acquired entity by related party prior to the acquisition	$ 800

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Income Taxes
Income tax expense	$ 956	$ 5,937	$ 1,645	$ 7,407
Effective income tax rate (as a percent)	11.20%	29.40%	10.50%	24.90%
Gross unrecognized tax benefits	$ 3,900		$ 3,900
Amount of estimated decrease in unrecognized tax benefits	$ 600		$ 600

Subsequent Event (Details)

Subsequent Event (Details) - USD ($) $ in Millions	Jul. 24, 2015	Jul. 04, 2015	Sep. 27, 2012	Jul. 31, 2012
Revolving Credit Facility
Subsequent event
Maximum borrowing capacity	$ 300	$ 130		$ 130
Term of debt instrument	5 years
Additional increase in borrowing capacity of the line of credit available at the entity's option				50
Revolving Credit Facility | Subsequent Event
Subsequent event
Maximum borrowing capacity	$ 300
Amount borrowed under the facility	$ 82.5
Term of debt instrument	5 years
Revolving Credit Facility | High end of range | Subsequent Event
Subsequent event
Additional increase in borrowing capacity of the line of credit available at the entity's option	$ 200
Term Loan Facility
Subsequent event
Maximum borrowing capacity		$ 100		$ 100
Amount borrowed under the facility			$ 100