Thoratec 10-Q 5 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares shares in Millions	6 Months Ended
	Jul. 04, 2015	Jul. 31, 2015
Document and Entity Information
Entity Registrant Name	THORATEC CORP
Entity Central Index Key	350,907
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		54.8
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	$ 144,925	$ 72,814
Short-term available-for-sale investments	129,042	157,664
Receivables, net of allowances of $1,892 in 2015 and $1,504 in 2014	79,915	72,847
Inventories	70,859	62,204
Deferred tax assets	15,782	15,727
Income tax receivable	14,476	10,778
Prepaid expenses and other assets	5,922	12,458
Total current assets	460,921	404,492
Property, plant and equipment, net	49,371	51,231
Goodwill	226,578	225,293
Purchased intangible assets, net	40,313	44,488
Long-term available-for-sale investments	4,212	4,239
Other long-term assets	35,787	34,240
Total Assets	817,182	763,983
Current liabilities:
Accounts payable	20,969	12,662
Accrued compensation	25,472	22,836
Warranty and related accrual	8,648	10,639
Contingent liabilities, current portion	5,782	14,902
Other accrued liabilities	22,391	20,441
Total current liabilities	83,262	81,480
Long-term deferred tax liability	4,376	3,592
Other long-term liabilities	17,079	14,458
Contingent liabilities, non-current portion (Notes 2)	32,237	31,656
Total Liabilities	$ 136,954	$ 131,186
Shareholders' equity:
Common shares: no par, authorized 100,000; issued and outstanding 54,741 in 2015 and 54,109 in 2014
Additional paid-in-capital	$ 652,793	$ 614,577
Retained earnings	45,335	40,242
Accumulated other comprehensive loss:	(17,900)	(22,022)
Total Shareholders' Equity	680,228	632,797
Total Liabilities and Shareholders' Equity	$ 817,182	$ 763,983

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jul. 04, 2015	Jan. 03, 2015
CONDENSED CONSOLIDATED BALANCE SHEETS
Receivables, allowances (in dollars)	$ 1,892	$ 1,504
Common shares, par value (in dollars per share)	$ 0	$ 0
Common shares, authorized	100,000	100,000
Common shares, issued	54,741	54,109
Common shares, outstanding	54,741	54,109

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - 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 OPERATIONS
Product sales	$ 128,692	$ 118,063	$ 250,000	$ 243,760
Cost of product sales	39,897	34,307	77,026	74,333
Gross profit	88,795	83,756	172,974	169,427
Operating expenses:
Selling, general and administrative	43,932	35,477	84,049	70,978
Research and development	26,511	23,048	52,628	46,387
Total operating expenses	70,443	58,525	136,677	117,365
Income from operations	18,352	25,231	36,297	52,062
Other income and ( expense ):
Interest expense	(13)	(2)	(13)	(2)
Interest income and other	687	559	1,504	806
Income before income taxes	19,026	25,788	37,788	52,866
Income tax expense	(5,778)	(8,375)	(13,760)	(17,214)
Net income	$ 13,248	$ 17,413	$ 24,028	$ 35,652
Net income per share:
Basic (in dollars per share)	$ 0.24	$ 0.31	$ 0.44	$ 0.63
Diluted (in dollars per share)	$ 0.24	$ 0.30	$ 0.44	$ 0.62
Shares used to compute net income per share:
Basic (in shares)	54,481	56,723	54,246	56,781
Diluted (in shares)	55,261	57,188	55,155	57,538

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	$ 13,248	$ 17,413	$ 24,028	$ 35,652
Unrealized gains (losses) on investments (net of taxes (benefits) of $(188) and $(2) for the three months ended July 4, 2015 and June 28, 2014, respectively, and $(183) and $(284) for the six months ended July 4, 2015 and June 28, 2014, respectively)	(282)	4	(274)	(1,407)
Foreign currency translation adjustments	1,667	(781)	4,396	678
Total other comprehensive income (loss)	1,385	(777)	4,122	(729)
Comprehensive income	$ 14,633	$ 16,636	$ 28,150	$ 34,923

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - 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
Unrealized gains (losses) on investments, taxes	$ (188)	$ (2)	$ (183)	$ (284)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
Cash flows from operating activities:
Net Income	$ 24,028	$ 35,652
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,943	8,207
Fixed assets write-down	172
Investment premium amortization, net	1,810	2,176
Allowance (reduction in ) for bad debt	463	(995)
Foreign currency re-measurement and other	5,149	232
Tax benefit related to stock plans	992	875
Change in fair value of contingent consideration	818	(1,436)
Share-based compensation expense	18,850	14,615
Excess tax benefits from share based compensation	(1,941)	(989)
Loss on disposal of assets	96	613
Change in net deferred tax liability	(428)	(226)
Changes in assets and liabilities:
Receivables	(8,858)	3,697
Inventories	(9,958)	(8,104)
Other current and non-current assets	3,136	559
Accounts payable	8,771	1,167
Income taxes, net	(11)	(7,410)
Other current and non-current liabilities	5,692	(7,799)
Net cash provided by operating activities	55,724	40,834
Cash flows from investing activities:
Purchases of available-for-sale investments	(90,937)	(86,877)
Sales and maturities of available-for-sale investments	116,891	94,232
Purchases of property, plant and equipment	(2,820)	(5,330)
Note receivable from Apica		(2,019)
Net cash provided by investing activities	23,134	6
Cash flows from financing activities:
Payment of contingent consideration	(7,699)	(6,107)
Proceeds from stock option exercises	23,463	2,867
Proceeds from stock issued under employee stock purchase plan	2,499	2,800
Excess tax benefits from share based compensation	1,941	989
Repurchase and retirement of common shares	(32,268)	(46,030)
Net cash used in financing activities	(12,064)	(45,481)
Effect of exchange rate changes on cash and cash equivalents	5,317	271
Net increase (decrease) in cash and cash equivalents	72,111	(4,370)
Net cash and cash equivalents at beginning of period	72,814	139,099
Net cash and cash equivalents at end of period	144,925	134,729
Supplemental disclosure of consolidated cash flow information:
Cash paid for taxes	13,239	24,206
Supplemental disclosure of consolidated non-cash investing and financing activities:
Transfers of equipment from inventory	605	1,012
Repurchases and retirement of common shares through other accrued liabilities	312	2,266
Purchases of property, plant and equipment through accounts payable and accrued liabilities	$ 221	$ 583

Operations and Significant Acco

Operations and Significant Accounting Policies	6 Months Ended
	Jul. 04, 2015
Operations and Significant Accounting Policies
Operations and Significant Accounting Policies	Note 1. Operations and Significant Accounting Policies Basis of Presentation The interim unaudited condensed consolidated financial statements of Thoratec Corporation (“we,” “our,” “us,” or the “Company”) have been prepared and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”), without audit, and reflect all adjustments necessary (consisting only of normal recurring adjustments) to present fairly our financial position, results of operations and cash flows as of and for the periods presented. Certain information and footnote disclosures normally included in our annual financial statements, prepared in accordance with GAAP, have been condensed or omitted. The accompanying financial statements should be read in conjunction with our consolidated financial statements, and the accompanying notes thereto, filed with the SEC in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015 (the “2014 Annual Report”). The operating results for any interim period are not necessarily indicative of the results that may be expected for any future period. The preparation of our unaudited condensed consolidated financial statements necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the unaudited condensed consolidated balance sheet dates and the reported amounts of revenues and expenses for the periods presented. Significant items subject to management’s estimates include revenue recognition, the useful lives of property and equipment, allowance for doubtful accounts, valuation allowance for deferred tax assets, stock-based compensation, income tax uncertainties, valuation of goodwill and intangible assets, warranty accrual and contingent consideration. The actual amounts could differ from those estimated amounts. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. The guidance in this ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . On July 9, 2015, FASB voted to defer the effective date of this standard by one year to December 15, 2017. This standard will be effective for the Company starting in the fiscal year 2018. We are currently evaluating the impact of the adoption of this ASU on our condensed consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis . The new standard amends the guidelines for determining whether certain legal entities should be consolidated and reduces the number of consolidation models. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the impact, if any, of adopting this new accounting guidance on our condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new standard amends the guidelines for the measurement of inventory from lower of cost or market to the lower of cost and net realizable value (NRV). NRV is defined as the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Under existing standards, inventory is measured at lower of cost or market, which requires the consideration of replacement cost, NRV, and NRV less an amount that approximates a normal profit margin. This ASU eliminates the requirement to determine and consider replacement cost or NRV less an approximately normal profit margin for inventory measurement. The new standard is effective prospectively beginning January 1, 2017, with early adoption permitted. We are currently evaluating the impact, if any, of adopting this new accounting guidance on our condensed consolidated financial statements.

Acquisitions

Acquisitions	6 Months Ended
	Jul. 04, 2015
Acquisitions
Acquisitions	Note 2. Acquisitions We have accounted for our acquisitions as business combinations. In accordance with authoritative guidance on business combination accounting, the assets and liabilities of the acquired companies were recorded as of the acquisition date, at their respective fair values, and are consolidated within our condensed consolidated financial statements. The results of operations related to each company acquired have been included in our condensed consolidated statements of operations since the date each company was acquired. All acquisition-related costs are expensed and recorded in selling, general and administrative expenses in our condensed consolidated statement of operations for the periods presented. Apica Acquisition in 2014 On July 2, 2014, we acquired all of the outstanding equity interests of Apica Cardiovascular Limited (“Apica”) and certain related subsidiaries from the former stockholders of Apica (the “Apica Acquisition”). Under the terms of the Apica Acquisition, the initial purchase consideration was approximately $35.1 million (net of acquired cash and inclusive of the settlement of existing debt and Apica’s direct acquisition-related transaction costs), and we will be obligated to make potential future milestone payments, based on regulatory approvals and commercial sales, of up to $40.0 million. Total purchase price allocation was estimated at $60.8 million at the acquisition date, including the initial purchase consideration of approximately $35.1 million and the estimated fair values for contingent consideration totaling $25.7 million, which was recorded as a non-current liability because such contingent consideration is expected to be settled no earlier than the third quarter of 2016. Prior to the acquisition, Apica was developing a surgical implantation system (“SIS”) to improve the apical access and attachment of the Left Ventricular Assist Device (“LVAD”) to the apex of the heart. We plan to couple the SIS with our HeartMate product line with the intention to obtain regional regulatory approvals for commercialization. In addition, Apica had developed the apical access, stabilization, and closure (“ASC”) device, which is commercially sold in Europe and is used for transapical valve procedures. We incurred $2.3 million of acquisition-related costs in connection with the Apica Acquisition in 2014. The purchase price allocation as of the acquisition date (as adjusted) is summarized as follows (in thousands): Current assets (excluding cash) $ Identifiable intangible assets: Developed technology (ASC) IPR&D asset (SIS) Goodwill Total assets Less: Liabilities assumed Deferred tax liability Total estimated purchase price consideration Less: Contingent consideration Cash paid or payable at the acquisition closing $ We recorded an IPR&D asset of $26.5 million, which represents an estimate of the fair value of the in-process technology related to the SIS device. The fair value of the IPR&D asset was determined using the multi-period excess earnings method which is equal to the present value of the incremental after-tax cash flows attributable to that intangible asset, using a discount rate of 23% based on our best estimate of a market participant’s after-tax weighted average cost of capital. We also recorded an ASC intangible asset of $5.3 million, which represents the estimated fair value of the technology associated with the ASC device. The fair value of the ASC intangible asset was determined using the replacement cost method, which represents what a market participant’s estimated cost would be to obtain or develop the technology in its current state. The replacement cost method was utilized because of limited market opportunities associated with the ASC technology. In the fourth quarter of 2014, we discontinued the commercialization of the ASC device and impaired the unamortized net book value associated with the ASC intangible asset. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair values assigned to the assets acquired, liabilities assumed, and primarily represents the expected synergies of Apica with our technologies. The goodwill of $31.5 million was allocated to our sole operating segment (Cardiovascular group) and is not deductible for income tax purposes. The following pro forma information presents the combined results of operations for the six months ended June 28, 2014 as if we had completed the Apica acquisition at the beginning of 2013. The pro forma financial information is provided for comparative purposes only and is not necessarily indicative of what actual results would have been had the acquisition occurred on the date indicated, nor does it give effect to synergies, cost savings, fair market value adjustments, immaterial depreciation expense and other changes expected to result from the acquisition. Accordingly, the pro forma financial results do not purport to be indicative of condensed consolidated results of operations as of the date hereof, for any period ended on the date hereof, or for any other future date or period. Six months Ended June 28, 2014 Product sales $ Income before taxes Net income Contingent Consideration Our acquisition of Apica includes payments of future contingent consideration upon the achievement of certain regulatory approvals and commercial sales milestones. We determined the initial fair value of the contingent consideration in connection with the regulatory and commercial sales milestones using various estimates, including probabilities of success, discount rates and the estimated amount of time until the conditions of the milestone payments are met. This fair value measurement was based on significant inputs not observable in the market, representing a Level 3 measurement within the fair value hierarchy (see Note 3 for more information about fair value measurements). The key assumptions used to determine the fair value of the contingent consideration associated with the regulatory milestones at the acquisition dates included a discount rate and probability-adjusted milestone payment date ranges. The key assumptions used to determine the fair value of the contingent consideration associated with the commercial sales milestones at the acquisition dates included a discount rate and probability-weighted expected milestone payment date ranges based on the aggregate number of commercial units sold. The fair value of recorded contingent consideration is re-measured at each reporting period with the change in fair value recognized within operating expense in our condensed consolidated statements of operations. We measure the liabilities on a recurring basis using Level 3 inputs. See Note 3 for further information regarding fair value measurements. · In the first six months of 2015, the fair value of the Apica contingent consideration increased by $0.3 million, in which $0.31 million was reported as research and development (“R&D”) expense and ($0.01) million was reported as selling, general and administrative (“SG&A”) expense. The increase was primarily a result of accretion associated with the passage of time. · We acquired certain assets and assumed certain liabilities from Terumo Corporation related to the DuraHeart II Left Ventricular Assist System product line (“DuraHeart II”) in June 2013. Under the terms of the DuraHeart II acquisition, the initial purchase consideration was $13.0 million and we will be obligated to make potential future milestone payments, based on regulatory approvals and product sales, of up to $43.5 million. In the first six months of 2015, the fair value of the DuraHeart II contingent consideration increased by $0.3 million (primarily reported as SG&A expense) as a result of a change in the discount rate and accretion associated with the passage of time. In the first six months of 2014, the fair value decreased by $3.2 million ($2.2 million reported as a reduction to R&D expense and $1.0 million reported as a reduction to SG&A expense) as a result of the changes in the probabilities of success and timing of when milestones were expected to be met. · Our acquisition of the medical business of Levitronix LLC (“Levitronix Medical”) in August 2011 requires payments of future contingent consideration annually through August 2015, which is calculated as 36% of annual revenues above agreed upon revenue targets. In the first six months of 2015 and 2014, we paid $9.4 million and $7.0 million, respectively, related to the Levitronix Medical contingent consideration. In the first six months of 2015 and 2014, we recorded a re-measurement adjustment (increase) of $0.2 million and $1.7 million, respectively, which was reported as SG&A expense.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jul. 04, 2015
Fair Value Measurements
Fair Value Measurements	Note 3. Fair Value Measurements Our financial assets and liabilities carried at fair value are primarily comprised of investments in money market funds, certificates of deposit, municipal and corporate bonds, commercial paper, U.S. government agency securities, variable demand notes, asset-backed securities, auction rate securities, forward contracts, certain investments held as assets under the deferred compensation plan, marketable equity securities and the contingent consideration in connection with acquisitions. The fair value accounting guidance requires that assets and liabilities be carried at fair value and classified in one of the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities that we have the ability to access Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves Level 3: Inputs that are unobservable data points that are not corroborated by market data We review the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. We recognize transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances caused the transfers to occur. There were no transfers between Level 1, Level 2 and Level 3 during either of the six months ended July 4, 2015 or June 28, 2014. The following table represents the fair value hierarchy for our financial assets and financial liabilities measured at fair value on a recurring basis: Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) At July 4, 2015 : Cash equivalents: Money market funds $ $ $ — $ — Corporate bonds — — Municipal bonds — — Short-term investments: Municipal bonds — — U.S. government agency securities — — Corporate bonds — — Commercial paper — — Asset-backed securities — — Prepaid expenses and other assets: Foreign exchange contracts — — Long-term investments: Auction rate securities — — Other long-term assets: Investments included in our deferred compensation plan — — Marketable equity securities — — Other accrued liabilities: Foreign exchange contracts — — Contingent consideration (current and long-term portions) $ $ — $ — $ Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) At January 3, 2015 : Cash equivalents: Money market funds $ $ $ — $ — Commercial paper — — Corporate bonds — — Municipal bonds — — Short-term investments: Municipal bonds — — U.S. government agency securities — — Corporate bonds — — Commercial paper — — Asset-backed securities — — Prepaid expenses and other assets: Foreign exchange contracts — — Long-term investments: Auction rate securities — — Other long-term assets: Investments included in our deferred compensation plan — — Marketable equity securities — — Other accrued liabilities: Foreign exchange contracts — — Contingent consideration (current and long-term portions) $ $ — $ — $ Financial assets and liabilities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. Our Level 2 financial assets and liabilities include short-term investments, foreign exchange instruments and certain of our deferred compensation plan securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques, and at least one significant model assumption or input is unobservable. Level 3 financial assets and liabilities include the following: Auction rate securities —Due to limited market activity the determination of fair value requires significant judgment and estimates. The auction rate securities were valued using a discounted cash flow model over a five-year period based on estimated interest rates, the present value of future principal payments, and interest payments discounted at rates considered to reflect the current market conditions and the credit quality of auction rate securities. Contingent liabilities —The fair value of the contingent consideration related to the acquisitions of Levitronix Medical, DuraHeart II and Apica requires significant management judgment and estimates. The fair value of each contingent consideration is re-measured at the end of each reporting period with the change in fair value recorded in operating expense on our condensed consolidated statements of operations. Actual amounts paid may differ from the obligations recorded. The fair value of the Levitronix Medical contingent consideration is calculated using the income approach, using various revenue assumptions and applying a probability to each scenario. The fair value of the DuraHeart II contingent consideration is calculated using the income approach, using various estimates, including probabilities of success, discount rate and the estimated amount of time until the conditions of the milestone payments are met. Refer to Note 2 for a discussion of the fair value of the contingent consideration associated with the Apica acquisition and further information regarding fair value measurements associated with the DuraHeart II acquisition. Available-for-sale investments are carried at fair value and are included in the tables above under short- and long-term investments. The aggregate market value, cost basis and gross unrealized gains and losses of available-for-sale investments by major security type are as follows: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) At July 4, 2015 : Short-term investments: Municipal bonds $ $ $ ) $ U.S. government agency securities — ) Corporate bonds ) Commercial paper — — Asset-backed securities — — Total short-term investments $ $ $ ) $ Long-term investments: Auction rate securities $ $ — $ ) $ Other long-term assets: Marketable equity securities — ) Total long-term $ $ — $ ) $ At January 3, 2015 : Short-term investments: Municipal bonds $ $ $ ) $ U.S. government agency securities — ) Corporate bonds ) Commercial paper — — Asset-backed securities — ) Total short-term investments $ $ $ ) $ Long-term investments: Auction rate securities $ $ — $ ) $ Other long-term assets: Marketable equity securities — ) Total long-term $ $ — $ ) $ As of July 4, 2015, our marketable equity securities have been in a continuous unrealized loss position for more than twelve months. We believe that the decline in fair value of the marketable equity securities below our cost basis is temporary and we intend to retain the securities for a sufficient period of time to allow for recovery in the market value of these investments. Our deferred compensation plan includes our corporate owned life insurance policies and mutual fund investments. The underlying mutual fund investments are deemed trading securities. The mutual fund investments’ fair value and the cash surrender value of our corporate-owned life insurance policies are classified in the condensed consolidated balance sheets in “Other long-term assets.” The aggregate value of our deferred compensation plan assets as of July 4, 2015 and January 3, 2015 was $6.4 million and $6.0 million, respectively. The unrealized gain before tax from the change in the value of the deferred compensation plan was not significant in the six months ended July 4, 2015 and June 28, 2014. The amortized cost and fair value of available-for-sale debt investments, by contractual maturity, were as follows: Amortized Cost Fair Value (in thousands) At July 4, 2015 : Maturing within 1 year $ $ Maturing after 1 year through 5 years Short-term available-for-sale investments Maturing after 5 years $ $ The following table provides a roll forward of the fair value, as determined by Level 3 inputs, of the auction rate securities during the first six months of 2015: Auction Rate Securities (in thousands) Balance as of January 3, 2015 $ Unrealized holding loss on auction rate securities, included in other comprehensive income ) Balance as of July 4, 2015 $ The following table provides a roll forward of the fair value, as determined by Level 3 inputs, of contingent consideration during the first six months of 2015: Contingent Consideration (in thousands) Balance as of January 3, 2015 $ Payments ) Change in fair value Balance as of July 4, 2015 $ The following table presents quantitative information about the inputs and valuation methodologies used for our fair value measurements classified in Level 3 of the fair value hierarchy at July 4, 2015 and January 3, 2015: Fair Value at July 4, 2015 (in thousands) Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Auction rate securities $ Discounted cash flow Discount rate % Market credit spread % Liquidity factor % Levitronix Medical Contingent consideration $ Multiple outcome discounted cash flow Revenue $30.0 million DuraHeart II Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2017 to 2026 Discount rate 5.26% to 25% Percent probabilities assigned to scenarios 5% to 67% Apica Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2016 to 2020 Discount rate % Percent probabilities assigned to scenarios 7.5% to 30% Fair Value at January 3, 2015 (in thousands) Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Auction rate securities $ Discounted cash flow Discount rate % Market credit spread % Liquidity factor % Levitronix Medical Contingent consideration $ Multiple outcome discounted cash flow Revenue $29.4 million for fiscal year 2015; $50.0 million for fiscal year 2014 DuraHeart II Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2017 to 2026 Discount rate 4.63% to 22.5% Percent probabilities assigned to scenarios 5% to 67% Apica Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2016 to 2020 Discount rate % Percent probabilities assigned to scenarios 7.5% to 30% Auction Rate Securities The significant unobservable inputs used in the fair value measurement of the auction rate securities are the weighted average discount rate, market credit spread and liquidity factor. A significant increase (decrease) in the discount rate in isolation could result in a significantly higher (lower) fair value measurement, whereas a significant increase (decrease) in the market credit spread and liquidity factor in isolation could result in a significantly lower (higher) fair value measurement. Although the discount rate as compared to the market credit spread and liquidity factors are not directly related, they will generally move in opposite directions. The fair value of auction rate securities is calculated on a quarterly basis by senior management based on a collaborative effort of the corporate treasury and accounting groups. To assess the reasonableness of the fair value measurement, management compares its fair value measurement to the values calculated by independent third parties. Contingent Consideration The fair values of contingent consideration are measured using projected payment dates, discount rates, probabilities of payments, and projected revenues (for revenue-based considerations). Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. A significant increase (decrease) in the projected revenue in isolation could result in a significantly higher (lower) fair value measurement; a significant delay (acceleration) in the product development (including projected regulatory milestone) achievement date in isolation could result in a significantly lower (higher) fair value measurement; a significant increase (decrease) in the discount rate in isolation could result in a significantly lower (higher) fair value measurement; and the changes in the probability of occurrence between the outcomes in isolation could result in a significant change in fair value measurement. The fair values of the contingent consideration are calculated on a quarterly basis by management based on a collaborative effort of our regulatory, research and development, operations, finance and accounting groups, as appropriate. Potential valuation adjustments are made as additional information becomes available, including the progress toward achieving revenue and milestone targets as compared to initial projections, the impact of market competition and changes in actual and projected product mix and average selling price, with the impact of such adjustments being recorded in the consolidated statements of operations. Assets and Liabilities That Are Measured at Fair Value on a Nonrecurring Basis Non-marketable equity investments and non-financial assets, such as goodwill, intangible assets, and property, plant, and equipment (measured at fair value if a write-down is recognized) are evaluated for impairment annually or when indicators of impairment exist. Non-financial assets such as identified intangible assets acquired in connection with our acquisitions are measured at fair value using Level 3 inputs, which include discounted cash flow methodologies, or similar techniques, when there is limited market activity and the determination of fair value requires significant judgment and estimates. In addition, in evaluating the fair value of goodwill impairment, further corroboration is obtained using our market capitalization. No impairment was recorded in either the six months ended July 4, 2015 or June 28, 2014.

Foreign Exchange Instruments

Foreign Exchange Instruments	6 Months Ended
	Jul. 04, 2015
Foreign Exchange Instruments
Foreign Exchange Instruments	Note 4. Foreign Exchange Instruments We utilize foreign currency forward exchange contracts and options with recognized financial institutions to manage our exposure to the impact of fluctuations in foreign currency exchange rates on certain intercompany balances and foreign currency denominated sales and purchase transactions. We do not use derivative financial instruments for speculative or trading purposes. These forward contracts are not designated as hedging instruments for accounting purposes. Principal hedged currencies include the Euro, British Pound Sterling, and U.S. Dollar. The periods of these forward contracts range up to approximately three months and the notional amounts are intended to be consistent with changes in the underlying exposures. We intend to exchange foreign currencies for U.S. Dollars at maturity. Total gross notional amounts for outstanding derivatives instruments were as follows: July 4, 2015 January 3, 2015 Forward contracts: Euro (sell) € 11.4 million € 15.8 million British Pound Sterling (sell) £ 1.3 million £ 1.5 million U.S. Dollar (sell) $ 40.8 million $ 21.2 million U.S. Dollar (buy) $ 76.8 million $ 59.0 million The following table shows the derivative instruments measured at gross fair value reported on the condensed consolidated balance sheets: As of July 4, 2015 As of January 3, 2015 Prepaid expenses and other assets Other accrued liabilities Prepaid expenses and other assets Other accrued liabilities (in thousands) Derivatives not designated as hedging instruments (forward contracts) $ $ $ $ The following table shows the effect of derivative instruments not designated as hedging instruments and foreign currency transactions gains and losses which were included in “Interest income and other” in the condensed consolidated statements of operations: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Foreign currency exchange gain (loss) on foreign contracts $ ) $ ) $ $ ) Foreign currency transactions gain (loss) ) )

Balance Sheet and Statement of

Balance Sheet and Statement of Operations Information	6 Months Ended
	Jul. 04, 2015
Balance Sheet and Statement of Operations Information
Balance Sheet and Statement of Operations Information	Note 5. Balance Sheet and Statement of Operations Information The following tables provide details of selected condensed consolidated balance sheets items as of the end of each period: Inventories consisted of the following: July 4, 2015 January 3, 2015 (in thousands) Finished goods $ $ Work in process Raw materials Total $ $ Property, plant and equipment, net consisted of the following: July 4, 2015 January 3, 2015 (in thousands) Land, building and improvements $ $ Equipment and capitalized software Furniture and leasehold improvements Total Less accumulated depreciation ) ) Total $ $ As of July 4, 2015, we have $1.6 million of equipment from the DuraHeart II acquisition which is expected to be placed in service in 2015 and is included in the “Equipment and capitalized software” line in the table above. Depreciation expense was $2.3 million and $4.6 million for the three and six months ended July 4, 2015, respectively, and $2.3 million and $4.4 million for the three and six months ended June 28, 2014, respectively. Warranty and related costs are accrued for based on our best estimates when management determines that it is probable a charge or liability has been incurred and the amount of loss can be reasonably estimated . Warranty and related accruals and the changes in the balances for the six months ended July 4, 2015 and June 28, 2014 were as follows: July 4, 2015 June 28, 2014 (in thousands) Balance, beginning of the period $ $ Additions Change in estimate — Settlements ) ) Balance, end of the period $ $ Changes in Accumulated Other Comprehensive Loss by component during the six months ended July 4, 2015: Foreign currency items (A) Unrealized gain (loss) on available-for-sale securities (A) Total (in thousands) Balance as of January 3, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassification ) Net current period other comprehensive loss ) Balance as of July 4, 2015 $ ) $ ) $ ) (A) All amounts are net of tax. Items included in “Other accrued liabilities” on our consolidated balance sheets that are in excess of 5% of total current liabilities are as follows: July 4, 2015 January 3, 2015 (in thousands) Deferred revenue $ $ Interest income and other consisted of the following: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Interest income $ $ $ $ Foreign currency, net ) ) Other Total interest income and other

Goodwill and Purchased Intangib

Goodwill and Purchased Intangible Assets, net	6 Months Ended
	Jul. 04, 2015
Goodwill and Purchased Intangible Assets, net
Goodwill and Purchased Intangible Assets, net	Note 6. Goodwill and Purchased Intangible Assets, net The carrying amount of goodwill and the changes in the balance for the six months ended July 4, 2015 were as follows (in thousands): Balance as of January 3, 2015 $ Foreign currency translation impact Balance as of July 4, 2015 $ Intangible assets (net of accumulated amortization and impairment) were as follows: At July 4, 2015 Gross Amount Accumulated Amortization Accumulated Impairment Net Amount (in thousands) Intangible assets subject to amortization: Patents and trademarks $ $ ) $ — $ Core technology ) ) Developed technology ) ) Customer based relationships and other ) — Pre-existing license agreement ) — Foreign currency translation impact — — ) ) Intangible assets not yet subject to amortization: DuraHeart II IPR&D — ) Apica VAD Tool IPR&D — — Foreign currency translation impact ) — — ) Total intangible assets $ $ ) $ ) $ At January 3, 2015 Gross Amount Accumulated Amortization Accumulated Impairment Net Amount Intangible assets subject to amortization: Patents and trademarks $ $ ) $ — $ Core technology ) ) Developed technology ) ) Customer based relationships and other ) — Pre-existing license agreement ) — Foreign currency translation impact ) — — ) ) ) Intangible assets not yet subject to amortization: DuraHeart II IPR&D — ) Apica VAD Tool IPR&D — — Foreign currency translation impact ) — — ) Total intangible assets $ $ ) $ ) $ Amortization expense related to identifiable intangible assets was $1.2 million and $2.4 million for the three and six months ended July 4, 2015, respectively, and $1.9 million and $3.8 million for the three and six months ended June 28, 2014, respectively. Estimated amortization expenses for the next five fiscal years and all years thereafter, excluding intangible assets not yet subject to amortization are as follows: (in thousands) Fiscal year: Remainder of 2015 $ 2016 2017 2018 2019 Thereafter Total $

Credit Facility

Credit Facility	6 Months Ended
	Jul. 04, 2015
Credit Facility.
Credit Facility	Note 7. Credit Facility On December 19, 2011, we signed an unsecured revolving credit facility agreement that provides for up to $50.0 million revolving credit that will expire on December 19, 2016. The interest rate charged on the amounts borrowed is LIBOR plus a margin (ranging from 0.75% to 1.25%). The agreement contains financial covenants with which we were in compliance as of July 4, 2015. The credit agreement permits us to use the facility for working capital and general corporate purposes. We did not have any borrowings under this credit facility during the six months ended July 4, 2015 or June 28, 2014.

Legal Proceeding

Legal Proceeding	6 Months Ended
	Jul. 04, 2015
Legal Proceeding
Legal Proceeding	Note 8. Legal Proceeding Legal Proceedings From time to time we are involved in litigation arising out of claims in the normal course of business. Based on the information presently available, management believes that there are no claims or actions pending or threatened against us, the ultimate resolution of which will have a material effect on our financial position, liquidity or results of operations, although the results of litigation are inherently uncertain. Purported Shareholder Class Action, filed January 2014 On January 24, 2014, we and three of our present and former officers were named as defendants in a putative shareholder class action entitled Cooper v. Thoratec Corp., Case No. 4:14-cv-00360, filed in the United States District Court for the Northern District of California. The action asserts violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, as well as Section 20(a) of the Exchange Act. On April 21, 2014, the Court appointed Bradley Cooper as Lead Plaintiff. On June 20, 2014, Mr. Cooper filed an amended class action complaint (“Amended Complaint”), adding a former officer of the Company as a defendant. The Amended Complaint alleged that during proposed class period (April 29, 2010 to November 27, 2013, inclusive), Defendants made false or misleading statements in various SEC filings, press releases, earnings calls, and healthcare conferences regarding the Company’s business and outlook, focusing primarily on Defendants’ alleged failure to disclose that there was a purported, known increase in the rate of pump thrombosis for patients using the HeartMate II Left Ventricular Assist Device during the proposed class period. Plaintiff sought unspecified damages, among other relief. Defendants filed a motion to dismiss the Amended Complaint for failure to state a claim on August 19, 2014, which the Court granted in its entirety with leave to amend on November 26, 2014. Plaintiff filed a second amended complaint on January 20, 2015 (the “Second Amended Complaint”). In the Second Amended Complaint, Plaintiff amended the class period from May 11, 2011 to August 6, 2014, inclusive, dropped a former officer of the Company as a defendant, and added Plaintiff Todd Labak, who is intended to replace Mr. Cooper as the Lead Plaintiff because Mr. Cooper no longer has Thoratec stock purchases within the proposed class period, among other changes. On March 23, 2015, Defendants filed a motion to dismiss the Second Amended Complaint for failure to state a claim. The motion to dismiss is now fully briefed and the parties are awaiting a ruling by the Court. Purported Shareholder Class Action Lawsuit, filed July 2015 On July 23, 2015, the Company and its directors were named as defendants in a purported class action shareholder lawsuit entitled Solak v. Grossman, which was filed in the Superior Court of California, County of Alameda in connection with our entrance into the Merger Agreement (as defined below) with St. Jude Medical, Inc. and certain other parties named therein . The lawsuit generally alleges that the members of our Board of Directors breached their fiduciary duties in negotiating and approving the Merger Agreement, that the Merger Agreement undervalues the Company, that our stockholders will not receive adequate or fair value for their common stock in the Merger (as defined below), and that the terms of the Merger Agreement impose improper deal protection terms that preclude competing offers. Plaintiffs seek, among other things, to declare that the action is properly maintainable as a class action and to enjoin the Company from consummating the proposed Merger in the manner provided for by the Merger Agreement. Plaintiffs further seek unspecified money damages, costs and attorneys’ and experts’ fees. See also Note 14 titled “ Subsequent Events ” for a more detailed discussion of the Merger Agreement. Although the results of litigation are inherently uncertain, based on the information currently available, we do not believe the ultimate resolution of the above named actions will have a material effect on our financial position, liquidity or results of operations.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Jul. 04, 2015
Share-Based Compensation
Share-Based Compensation	Note 9. Share-Based Compensation Our Amended and Restated 2006 Incentive Stock Plan (“2006 Plan”) permits the issuance of stock options (“options”), restricted stock units (“RSUs”), performance share units (“PSUs”) and other types of awards to employees, directors, and consultants. As of July 4, 2015, approximately 3.2 million shares remained available for future issuance under the 2006 Plan, which assumes that PSUs will convert at 100% of target. Share-based compensation consisted of the following: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Cost of product sales $ $ $ $ Selling, general and administrative expenses Research and development Total share-based compensation expense before taxes Tax benefit for share-based compensation expense Total share-based compensation (net of taxes) $ $ $ $ Stock Options The fair value of each option is estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Risk free interest rate (weighted average) % % % % Expected volatility % % % % Expected option term (years) 5.14 to 5.82 4.54 to 5.04 Dividends None None None None Stock option activity is summarized as follows: Number of Options (in thousands) Weighted Average Exercise Price Per Share Weighted Average Remaining Contract Life (years) Outstanding options as of January 3, 2015 $ Granted Exercised ) Forfeited or expired ) Outstanding options as of July 4, 2015 Outstanding options exercisable as of July 4, 2015 Outstanding options vested as of July 4, 2015 and expected to vest $ As of July 4, 2015, there was $8.3 million of unrecognized compensation expense, net of estimated forfeitures, related to options, which expense we expect to recognize over a weighted average period of 1.59 years. The weighted average grant-date fair value of options granted in the first six months of 2015 was $14.22 per share. Restricted Stock Units Restricted stock unit activity is summarized as follows: Number of Units (in thousands) Weighted Average Grant-Date Fair Value Weighted Average Remaining Contract Life (in years) Outstanding units as of January 3, 2015 $ Granted Released ) Forfeited or expired ) Outstanding units as of July 4, 2015 $ As of July 4, 2015, there was $48.8 million of unrecognized compensation expense, net of estimated forfeitures, related to RSUs, which amount we expect to recognize over 2.74 years. Performance Share Units We issue PSUs representing hypothetical shares of our common stock. Each PSU reflects multiple shares that may be issued to the award recipient, with the number of shares to be issued determined based on performance and market conditions (referred to as either a “Performance Condition PSU” or a “Market Condition PSU”). The actual number of shares the recipient receives at the end of a performance period may range from 0% up to 200% of the target shares granted. Recipients generally must remain employed by us on a continuous basis through the end of the applicable performance period in order to receive shares subject to that award. The stock-based compensation costs for these PSUs, net of estimated forfeitures, are recorded over the three- or four-year vesting period based on a graded accelerated vesting method. With respect to Performance Condition PSUs, any change in estimates affecting the number of shares to be issued upon vesting of the PSUs would be accounted for as a cumulative adjustment to the compensation expense in the period in which the change occurs. In 2014, we issued approximately 69,000 Performance Condition PSUs and we expect that no shares will be issuable under such PSU’s based on a change in management’s estimate in 2014. There was no change in estimate in first six months of 2015. On September 22, 2014, we granted approximately 188,000 Market Condition PSUs to our President and Chief Executive Officer. In the first quarter of 2015, we granted approximately 115,000 Market Condition PSUs to certain employees of the Company. Share-based compensation expense related to all Market Condition PSUs was $1.3 million and $1.9 million in the three and six months ended July 4, 2015, respectively. As of July 4, 2015, we had $9.9 million of unrecognized compensation expense, net of estimated forfeitures, which we expect to recognize over a weighted average period of 2.07 years.

Common and Preferred Stock

Common and Preferred Stock	6 Months Ended
	Jul. 04, 2015
Common and Preferred Stock
Common and Preferred Stock	Note 10. Common and Preferred Stock On December 5, 2013, the Board of Directors authorized a program to repurchase up to $200.0 million of our shares of common stock (“December 2013 program”), which will expire on December 31, 2015. In the three and six months ended July 4, 2015, we repurchased $4.6 million and $22.9 million, respectively, of shares of our common stock under the December 2013 program, of which $0.3 million was unsettled and accrued in our condensed consolidated balance sheet as of July 4, 2015. As of July 4, 2015, $72.1 million was available for repurchases of shares of our common stock under the December 2013 program. The December 2013 program may be accelerated, suspended, delayed or discontinued at any time. We are incorporated in California, and as California law does not recognize treasury stock, the shares repurchased decreased the common shares outstanding. We recorded the $22.9 million of shares repurchased in the six months ended July 4, 2015 by reducing the additional paid-in capital (“APIC”) balance by the average value per share reflected in the account prior to the repurchase and allocating the excess as a reduction of retained earnings. Based on this allocation, APIC decreased by $8.0 million and retained earnings decreased by $14.9 million. We also purchased shares of our common stock that were not part of our publicly announced repurchase program, which represent the surrender value of shares of restricted stock units withheld in order to satisfy tax withholding obligations upon vesting. The shares purchased do not reduce the dollar value that may yet be purchased under our publicly announced repurchase programs. The aggregate value of shares purchased in the six months ended July 4, 2015 was $6.0 million, which decreased APIC and retained earnings by $1.9 million and $4.1 million, respectively, based on the same allocation methodology discussed above.

Income Taxes

Income Taxes	6 Months Ended
	Jul. 04, 2015
Income Taxes
Income Taxes	Note 11. Income Taxes During the first quarter of fiscal 2015, we recorded a $2.3 million out-of-period adjustment to income tax expense related to the overstatement of certain tax benefits from 2011 to 2014. The adjustment was not considered material to the financial statements for the six month period ended July 4, 2015, or any previously issued interim or annual consolidated financial statements. Our effective income tax rates for the three months ended July 4, 2015 and June 28, 2014 were 30.4% and 32.5%, respectively. Our effective income tax rates for the six months ended July 4, 2015 and June 28, 2014 were 36.4% and 32.6%, respectively. For the three months ended July 4, 2015, the decrease is primarily due to a higher mix of income generated in lower tax rate jurisdictions. For the first six months of 2015, the increase is primarily due to the out-of-period adjustment discussed above and was partially offset by a higher mix of income generated in lower tax rate jurisdictions. During the next 12 months, it is reasonably possible that audit resolutions and the expiration of statutes of limitations could reduce our unrecognized tax benefits by up to $1.5 million. However, this amount may be subject to change as a result of final determinations by taxing authorities throughout the year.

Segment and Geographic Informat

Segment and Geographic Information	6 Months Ended
	Jul. 04, 2015
Segment and Geographic Information
Segment and Geographic Information.	Note 12. Segment and Geographic Information We have one operating segment and, and therefore, one reportable segment which develops, manufactures and markets proprietary medical devices used for mechanical circulatory support for the treatment of heart failure patients. Our chief operating decision-maker reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance, accompanied by disaggregated revenue information by product line. We do not assess the performance of our individual product lines on measures of profit or loss, or asset-based metrics. Therefore, the information below is presented only for revenues by product line, geography, and certain revenue category. Product sales attributed to a country or region include product sales to hospitals, physicians and distributors and are based on final destinations where the products are sold. No individual customer or individual country outside of the U.S. accounted for more than 10% of product sales during the three and six months ended July 4, 2015 or during the three and six months ended June 28, 2014. Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by geographic location: Domestic $ $ $ $ International Total $ $ $ $ Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by product line: HeartMate $ $ $ $ CentriMag PVAD and IVAD Other Total $ $ $ $ Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by category: Pump $ $ $ $ Non-Pump Other Total $ $ $ $

Net Income Per Share

Net Income Per Share	6 Months Ended
	Jul. 04, 2015
Net Income Per Share
Net Income Per Share	13. Net Income Per Share We calculate basic earnings per share (“EPS”) using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes any dilutive effect of outstanding options and RSUs. PSUs are excluded from the shares used to compute diluted EPS until the performance conditions associated with the PSUs are met. The reconciliations of the numerators and denominators of each of the basic and diluted EPS calculations were as follows: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands, except per share data) Numerator: Net Income $ $ $ $ Denominator: Weighted average shares used to compute basic EPS Dilutive effect of share-based compensation plans Weighted average shares used to compute diluted EPS Net income per share: Basic $ $ $ $ Diluted $ $ $ $ Potential common share equivalents excluded where the inclusion would be anti-dilutive are as follows: Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Options to purchase shares not included in the computation of diluted net income per share because their inclusion would be anti-dilutive

Subsequent Event

Subsequent Event	6 Months Ended
	Jul. 04, 2015
Subsequent Event
Subsequent Event	14. Subsequent Event On July 21, 2015, the Company, St. Jude Medical, Inc., a Minnesota corporation (“St. Jude Medical”), and Spyder Merger Corporation, a California corporation and a wholly-owned subsidiary of St. Jude Medical (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, merge with and into the Company, and the Company will survive the merger and continue as a wholly-owned subsidiary of St. Jude Medical (the “Merger”). All issued and outstanding shares of Company stock immediately prior to the effective time of the Merger (the “Effective Time”) will be cancelled and converted into the right to receive the merger consideration specified therein, in each case upon the terms and subject to the conditions set forth in the Merger Agreement. Under the terms of the Merger Agreement, the Company’s shareholders will receive $63.50 in cash, without interest, for each share of the Company’s common stock they own at the Effective Time. The transaction is conditioned upon, among other things, Company shareholder approval, regulatory approvals and other customary closing conditions. The Merger Agreement includes customary representations, warranties and covenants of the Company and St. Jude Medical. The Company has agreed to operate its business and the business of its subsidiaries in the ordinary course of business consistent with past practices through the Effective Time. The transaction is expected to be completed in the fourth quarter of 2015. The Merger Agreement includes a “go-shop” period, during which the Company will actively solicit alternative proposals from third parties for a period of 30 days from the date of the Merger Agreement continuing through August 20, 2015. The Merger Agreement provides for the Company to pay a termination fee of approximately $30 million to St. Jude Medical if the Company terminates the Merger Agreement in connection with a superior proposal that arises during the go-shop period and a termination fee of approximately $111 million if the Company terminates the Merger Agreement in connection with a superior proposal that arises following the go-shop period. See also Note 8 titled “ Legal Proceedings — Purported Shareholder Class Action Lawsuit, filed July 2015 ” for a discussion on litigation related to the proposed Merger.

Operations and Significant Ac22

Operations and Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 04, 2015
Operations and Significant Accounting Policies
Basis of Presentation	Basis of Presentation The interim unaudited condensed consolidated financial statements of Thoratec Corporation (“we,” “our,” “us,” or the “Company”) have been prepared and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”), without audit, and reflect all adjustments necessary (consisting only of normal recurring adjustments) to present fairly our financial position, results of operations and cash flows as of and for the periods presented. Certain information and footnote disclosures normally included in our annual financial statements, prepared in accordance with GAAP, have been condensed or omitted. The accompanying financial statements should be read in conjunction with our consolidated financial statements, and the accompanying notes thereto, filed with the SEC in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015 (the “2014 Annual Report”). The operating results for any interim period are not necessarily indicative of the results that may be expected for any future period. The preparation of our unaudited condensed consolidated financial statements necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the unaudited condensed consolidated balance sheet dates and the reported amounts of revenues and expenses for the periods presented. Significant items subject to management’s estimates include revenue recognition, the useful lives of property and equipment, allowance for doubtful accounts, valuation allowance for deferred tax assets, stock-based compensation, income tax uncertainties, valuation of goodwill and intangible assets, warranty accrual and contingent consideration. The actual amounts could differ from those estimated amounts.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for revenue recognition. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. The guidance in this ASU supersedes the revenue recognition requirements in Topic 605, Revenue Recognition , and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts . On July 9, 2015, FASB voted to defer the effective date of this standard by one year to December 15, 2017. This standard will be effective for the Company starting in the fiscal year 2018. We are currently evaluating the impact of the adoption of this ASU on our condensed consolidated financial statements. In February 2015, the FASB issued ASU No. 2015-02, Amendments to the Consolidation Analysis . The new standard amends the guidelines for determining whether certain legal entities should be consolidated and reduces the number of consolidation models. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the impact, if any, of adopting this new accounting guidance on our condensed consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new standard amends the guidelines for the measurement of inventory from lower of cost or market to the lower of cost and net realizable value (NRV). NRV is defined as the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Under existing standards, inventory is measured at lower of cost or market, which requires the consideration of replacement cost, NRV, and NRV less an amount that approximates a normal profit margin. This ASU eliminates the requirement to determine and consider replacement cost or NRV less an approximately normal profit margin for inventory measurement. The new standard is effective prospectively beginning January 1, 2017, with early adoption permitted. We are currently evaluating the impact, if any, of adopting this new accounting guidance on our condensed consolidated financial statements.

Acquisitions (Tables)

Acquisitions (Tables) - Apica Acquisition	6 Months Ended
	Jul. 04, 2015
Summary of purchase price allocation as of the acquisition date	The purchase price allocation as of the acquisition date (as adjusted) is summarized as follows (in thousands): Current assets (excluding cash) $ Identifiable intangible assets: Developed technology (ASC) IPR&D asset (SIS) Goodwill Total assets Less: Liabilities assumed Deferred tax liability Total estimated purchase price consideration Less: Contingent consideration Cash paid or payable at the acquisition closing $
Schedule of pro forma financial information	Six months Ended June 28, 2014 Product sales $ Income before taxes Net income

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jul. 04, 2015
Fair Value Measurements
Financial assets and financial liabilities measured at fair value on a recurring basis	Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) At July 4, 2015 : Cash equivalents: Money market funds $ $ $ — $ — Corporate bonds — — Municipal bonds — — Short-term investments: Municipal bonds — — U.S. government agency securities — — Corporate bonds — — Commercial paper — — Asset-backed securities — — Prepaid expenses and other assets: Foreign exchange contracts — — Long-term investments: Auction rate securities — — Other long-term assets: Investments included in our deferred compensation plan — — Marketable equity securities — — Other accrued liabilities: Foreign exchange contracts — — Contingent consideration (current and long-term portions) $ $ — $ — $ Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) At January 3, 2015 : Cash equivalents: Money market funds $ $ $ — $ — Commercial paper — — Corporate bonds — — Municipal bonds — — Short-term investments: Municipal bonds — — U.S. government agency securities — — Corporate bonds — — Commercial paper — — Asset-backed securities — — Prepaid expenses and other assets: Foreign exchange contracts — — Long-term investments: Auction rate securities — — Other long-term assets: Investments included in our deferred compensation plan — — Marketable equity securities — — Other accrued liabilities: Foreign exchange contracts — — Contingent consideration (current and long-term portions) $ $ — $ — $
Summary of aggregate market value, cost basis and gross unrealized gains and losses for available-for-sale investments	Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) At July 4, 2015 : Short-term investments: Municipal bonds $ $ $ ) $ U.S. government agency securities — ) Corporate bonds ) Commercial paper — — Asset-backed securities — — Total short-term investments $ $ $ ) $ Long-term investments: Auction rate securities $ $ — $ ) $ Other long-term assets: Marketable equity securities — ) Total long-term $ $ — $ ) $ At January 3, 2015 : Short-term investments: Municipal bonds $ $ $ ) $ U.S. government agency securities — ) Corporate bonds ) Commercial paper — — Asset-backed securities — ) Total short-term investments $ $ $ ) $ Long-term investments: Auction rate securities $ $ — $ ) $ Other long-term assets: Marketable equity securities — ) Total long-term $ $ — $ ) $
Schedule of amortized cost and fair value of available-for-sale debt investments, by contractual maturity	Amortized Cost Fair Value (in thousands) At July 4, 2015 : Maturing within 1 year $ $ Maturing after 1 year through 5 years Short-term available-for-sale investments Maturing after 5 years $ $
Schedule of roll forward of fair value, as determined by Level 3 inputs, of auction rate securities and contingent consideration (current and long-term portions)	The following table provides a roll forward of the fair value, as determined by Level 3 inputs, of the auction rate securities during the first six months of 2015: Auction Rate Securities (in thousands) Balance as of January 3, 2015 $ Unrealized holding loss on auction rate securities, included in other comprehensive income ) Balance as of July 4, 2015 $ The following table provides a roll forward of the fair value, as determined by Level 3 inputs, of contingent consideration during the first six months of 2015: Contingent Consideration (in thousands) Balance as of January 3, 2015 $ Payments ) Change in fair value Balance as of July 4, 2015 $
Schedule of quantitative information for Level 3 Fair Value Measurements	Fair Value at July 4, 2015 (in thousands) Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Auction rate securities $ Discounted cash flow Discount rate % Market credit spread % Liquidity factor % Levitronix Medical Contingent consideration $ Multiple outcome discounted cash flow Revenue $30.0 million DuraHeart II Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2017 to 2026 Discount rate 5.26% to 25% Percent probabilities assigned to scenarios 5% to 67% Apica Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2016 to 2020 Discount rate % Percent probabilities assigned to scenarios 7.5% to 30% Fair Value at January 3, 2015 (in thousands) Valuation Methodology Significant Unobservable Input Weighted Average (range, if applicable) Auction rate securities $ Discounted cash flow Discount rate % Market credit spread % Liquidity factor % Levitronix Medical Contingent consideration $ Multiple outcome discounted cash flow Revenue $29.4 million for fiscal year 2015; $50.0 million for fiscal year 2014 DuraHeart II Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2017 to 2026 Discount rate 4.63% to 22.5% Percent probabilities assigned to scenarios 5% to 67% Apica Contingent consideration $ Multiple outcome discounted cash flow Milestone dates 2016 to 2020 Discount rate % Percent probabilities assigned to scenarios 7.5% to 30%

Foreign Exchange Instruments (T

Foreign Exchange Instruments (Tables)	6 Months Ended
	Jul. 04, 2015
Foreign Exchange Instruments
Schedule of notional amount of foreign currency contracts, which do not qualify for hedge accounting	July 4, 2015 January 3, 2015 Forward contracts: Euro (sell) € 11.4 million € 15.8 million British Pound Sterling (sell) £ 1.3 million £ 1.5 million U.S. Dollar (sell) $ 40.8 million $ 21.2 million U.S. Dollar (buy) $ 76.8 million $ 59.0 million
Schedule of derivative instruments measured at gross fair value reported on the consolidated balance sheets	As of July 4, 2015 As of January 3, 2015 Prepaid expenses and other assets Other accrued liabilities Prepaid expenses and other assets Other accrued liabilities (in thousands) Derivatives not designated as hedging instruments (forward contracts) $ $ $ $
Schedule of effect of derivative instruments not designated as hedging instruments and foreign currency transactions gains and losses	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Foreign currency exchange gain (loss) on foreign contracts $ ) $ ) $ $ ) Foreign currency transactions gain (loss) ) )

Balance Sheet and Statement o26

Balance Sheet and Statement of Operations Information (Tables)	6 Months Ended
	Jul. 04, 2015
Balance Sheet and Statement of Operations Information
Schedule of Inventories	July 4, 2015 January 3, 2015 (in thousands) Finished goods $ $ Work in process Raw materials Total $ $
Schedule of Property, Plant and Equipment, net	July 4, 2015 January 3, 2015 (in thousands) Land, building and improvements $ $ Equipment and capitalized software Furniture and leasehold improvements Total Less accumulated depreciation ) ) Total $ $
Changes in the warranty provision	July 4, 2015 June 28, 2014 (in thousands) Balance, beginning of the period $ $ Additions Change in estimate — Settlements ) ) Balance, end of the period $ $
Schedule of changes in accumulated other comprehensive losses by component	Foreign currency items (A) Unrealized gain (loss) on available-for-sale securities (A) Total (in thousands) Balance as of January 3, 2015 $ ) $ ) $ ) Other comprehensive loss before reclassification ) Net current period other comprehensive loss ) Balance as of July 4, 2015 $ ) $ ) $ ) (A) All amounts are net of tax.
Schedule of accrued liabilities	July 4, 2015 January 3, 2015 (in thousands) Deferred revenue $ $
Summary of Interest income and other income	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Interest income $ $ $ $ Foreign currency, net ) ) Other Total interest income and other

Goodwill and Purchased Intang27

Goodwill and Purchased Intangible Assets, net (Tables)	6 Months Ended
	Jul. 04, 2015
Goodwill and Purchased Intangible Assets, net
Schedule of changes in carrying amount of goodwill	The carrying amount of goodwill and the changes in the balance for the six months ended July 4, 2015 were as follows (in thousands): Balance as of January 3, 2015 $ Foreign currency translation impact Balance as of July 4, 2015 $
Schedule of intangible assets on the condensed consolidated balance sheets	At July 4, 2015 Gross Amount Accumulated Amortization Accumulated Impairment Net Amount (in thousands) Intangible assets subject to amortization: Patents and trademarks $ $ ) $ — $ Core technology ) ) Developed technology ) ) Customer based relationships and other ) — Pre-existing license agreement ) — Foreign currency translation impact — — ) ) Intangible assets not yet subject to amortization: DuraHeart II IPR&D — ) Apica VAD Tool IPR&D — — Foreign currency translation impact ) — — ) Total intangible assets $ $ ) $ ) $ At January 3, 2015 Gross Amount Accumulated Amortization Accumulated Impairment Net Amount Intangible assets subject to amortization: Patents and trademarks $ $ ) $ — $ Core technology ) ) Developed technology ) ) Customer based relationships and other ) — Pre-existing license agreement ) — Foreign currency translation impact ) — — ) ) ) Intangible assets not yet subject to amortization: DuraHeart II IPR&D — ) Apica VAD Tool IPR&D — — Foreign currency translation impact ) — — ) Total intangible assets $ $ ) $ ) $
Schedule of estimated amortization expense for the next five fiscal years and all years thereafter	(in thousands) Fiscal year: Remainder of 2015 $ 2016 2017 2018 2019 Thereafter Total $

Share-Based Compensation (Table

Share-Based Compensation (Tables)	6 Months Ended
	Jul. 04, 2015
Share-Based Compensation
Schedule of share-based compensation	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Cost of product sales $ $ $ $ Selling, general and administrative expenses Research and development Total share-based compensation expense before taxes Tax benefit for share-based compensation expense Total share-based compensation (net of taxes) $ $ $ $
Schedule of assumptions used to estimate the grant date fair value of options	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Risk free interest rate (weighted average) % % % % Expected volatility % % % % Expected option term (years) 5.14 to 5.82 4.54 to 5.04 Dividends None None None None
Summary of stock option activity	Number of Options (in thousands) Weighted Average Exercise Price Per Share Weighted Average Remaining Contract Life (years) Outstanding options as of January 3, 2015 $ Granted Exercised ) Forfeited or expired ) Outstanding options as of July 4, 2015 Outstanding options exercisable as of July 4, 2015 Outstanding options vested as of July 4, 2015 and expected to vest $
Summary of restricted stock unit activity	Number of Units (in thousands) Weighted Average Grant-Date Fair Value Weighted Average Remaining Contract Life (in years) Outstanding units as of January 3, 2015 $ Granted Released ) Forfeited or expired ) Outstanding units as of July 4, 2015 $

Segment and Geographic Inform29

Segment and Geographic Information (Tables)	6 Months Ended
	Jul. 04, 2015
Segment and Geographic Information
Schedule of product sales by geographic location	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by geographic location: Domestic $ $ $ $ International Total $ $ $ $
Schedule of product sales by product line	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by product line: HeartMate $ $ $ $ CentriMag PVAD and IVAD Other Total $ $ $ $
Schedule of product sales by category	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Product sales by category: Pump $ $ $ $ Non-Pump Other Total $ $ $ $

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Jul. 04, 2015
Net Income Per Share
Schedule of Basic and diluted income per common share attributable to common shareholders under the two-class method	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands, except per share data) Numerator: Net Income $ $ $ $ Denominator: Weighted average shares used to compute basic EPS Dilutive effect of share-based compensation plans Weighted average shares used to compute diluted EPS Net income per share: Basic $ $ $ $ Diluted $ $ $ $
Schedule of potential common share equivalents excluded where the inclusion would be anti-dilutive	Three Months Ended Six Months Ended July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 (in thousands) Options to purchase shares not included in the computation of diluted net income per share because their inclusion would be anti-dilutive

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Thousands	Jul. 02, 2014	Jun. 29, 2013	Aug. 27, 2011	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Summary of purchase price allocation
Goodwill				$ 226,578		$ 225,293
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration				818	$ (1,436)
Apica Acquisition
Acquisition
Cash paid	$ 35,100
Acquisition-related costs	2,300
Summary of purchase price allocation
Current assets (excluding cash)	548
Goodwill	31,491
Total assets	63,839
Less: Liabilities assumed	463
Deferred tax liability	2,562
Total estimated purchase price consideration	60,814
Less: Contingent consideration	25,700
Cash paid or payable at the acquisition closing	$ 35,114
Discount rate (as a percent)	23.00%
Pro forma financial information
Product sales					243,760
Income before taxes					49,793
Net income					33,579
Increase( decrease ) in fair value of contingent consideration				300
Apica Acquisition | Research and development
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration				310
Apica Acquisition | Selling, general and administrative expenses
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration				(10)
Apica Acquisition | IPR&D asset
Summary of purchase price allocation
Identifiable intangible assets	$ 26,500
Apica Acquisition | Developed technology
Summary of purchase price allocation
Finite-lived identifiable intangible assets	5,300
Apica Acquisition | Contingent consideration payable upon reaching commercial sales milestone
Acquisition
Potential future milestone payments	$ 40,000
DuraHeart II Acquisition
Acquisition
Cash paid		$ 13,000
Potential future milestone payments		$ 43,500
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration				300	(3,200)
DuraHeart II Acquisition | Research and development
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration					(2,200)
DuraHeart II Acquisition | Selling, general and administrative expenses
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration					(1,000)
Levitronix Medical
Pro forma financial information
Percentage of sales above threshold for earn-out payments			36.00%
Contingent Consideration paid				9,400	7,000
Levitronix Medical | Selling, general and administrative expenses
Pro forma financial information
Increase( decrease ) in fair value of contingent consideration				$ 200	$ 1,700

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Financial assets and liabilities measured at fair value on a recurring basis
Transfers between the levels within the fair value hierarchy	$ 0	$ 0
Liabilities:
Cash flow model discount period	5 years
Commercial Paper
Assets:
Investments	$ 12,792		$ 10,297
Corporate bonds
Assets:
Investments	22,419		19,632
Municipal bonds
Assets:
Investments	86,358		117,681
U.S. government agency securities
Assets:
Investments	6,900		8,340
Asset-backed securities
Assets:
Investments	573		1,714
Auction rate securities
Assets:
Investments	4,212		4,239
Marketable equity securities
Assets:
Investments	1,451		1,836
Recurring basis | Total fair value
Assets:
Prepaid expenses and other assets - Foreign exchange contracts	188		3,759
Other long term assets: Investments included in our deferred compensation plan	1,870		1,552
Liabilities:
Other accrued liabilities - Foreign exchange contracts	611		913
Contingent consideration (current and long-term portions)	38,019		46,558
Recurring basis | Total fair value | Money market funds
Assets:
Cash equivalents	131,198		34,742
Recurring basis | Total fair value | Commercial Paper
Assets:
Cash equivalents			5,000
Investments	12,792		10,297
Recurring basis | Total fair value | Corporate bonds
Assets:
Cash equivalents	2,006		1,006
Investments	22,419		19,632
Recurring basis | Total fair value | Municipal bonds
Assets:
Cash equivalents	3,063		2,691
Investments	86,358		117,681
Recurring basis | Total fair value | U.S. government agency securities
Assets:
Investments	6,900		8,340
Recurring basis | Total fair value | Asset-backed securities
Assets:
Investments	573		1,714
Recurring basis | Total fair value | Auction rate securities
Assets:
Investments	4,212		4,239
Recurring basis | Total fair value | Marketable equity securities
Assets:
Investments	1,451		1,836
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Money market funds
Assets:
Cash equivalents	131,198		34,742
Recurring basis | Quoted prices in active markets for identical assets (Level 1) | Marketable equity securities
Assets:
Investments	1,451		1,836
Recurring basis | Significant other observable inputs (Level 2)
Assets:
Prepaid expenses and other assets - Foreign exchange contracts	188		3,759
Other long term assets: Investments included in our deferred compensation plan	1,870		1,552
Liabilities:
Other accrued liabilities - Foreign exchange contracts	611		913
Recurring basis | Significant other observable inputs (Level 2) | Commercial Paper
Assets:
Cash equivalents			5,000
Investments	12,792		10,297
Recurring basis | Significant other observable inputs (Level 2) | Corporate bonds
Assets:
Cash equivalents	2,006		1,006
Investments	22,419		19,632
Recurring basis | Significant other observable inputs (Level 2) | Municipal bonds
Assets:
Cash equivalents	3,063		2,691
Investments	86,358		117,681
Recurring basis | Significant other observable inputs (Level 2) | U.S. government agency securities
Assets:
Investments	6,900		8,340
Recurring basis | Significant other observable inputs (Level 2) | Asset-backed securities
Assets:
Investments	573		1,714
Recurring basis | Significant unobservable inputs (Level 3)
Liabilities:
Contingent consideration (current and long-term portions)	38,019		46,558
Recurring basis | Significant unobservable inputs (Level 3) | Auction rate securities
Assets:
Investments	$ 4,212		$ 4,239

Fair Value Measurements (Deta33

Fair Value Measurements (Details 2) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Available-for-sale investments by major security type:
Total Amortized Cost	$ 133,945
Other long-term assets - investments - deferred compensation plan
Deferred compensation plan assets	6,400	$ 6,000
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	133,945
Contractual maturities of available-for-sale investments, Fair Value
Total Fair Value	133,254
Short-term investments
Available-for-sale investments by major security type:
Total Amortized Cost	129,045	157,622
Gross Unrealized Gains	49	84
Gross Unrealized Losses	(52)	(42)
Fair Value	129,042	157,664
Contractual maturities of available-for-sale investments, Amortized Cost
Maturing within 1 year	80,742
Maturing after 1 year through 5 years	48,303
Total Amortized Cost	129,045	157,622
Maturing after 5 years	4,900
Contractual maturities of available-for-sale investments, Fair Value
Maturing within 1 year	80,746
Maturing after 1 year through 5 years	48,296
Total Fair Value	129,042
Maturing after 5 years	4,212
Municipal bonds
Available-for-sale investments by major security type:
Total Amortized Cost	86,339	117,614
Gross Unrealized Gains	49	83
Gross Unrealized Losses	(30)	(16)
Fair Value	86,358	117,681
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	86,339	117,614
U.S. government agency securities
Available-for-sale investments by major security type:
Total Amortized Cost	6,901	8,341
Gross Unrealized Losses	(1)	(1)
Fair Value	6,900	8,340
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	6,901	8,341
Corporate bonds
Available-for-sale investments by major security type:
Total Amortized Cost	22,440	19,655
Gross Unrealized Gains		1
Gross Unrealized Losses	(21)	(24)
Fair Value	22,419	19,632
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	22,440	19,655
Commercial Paper
Available-for-sale investments by major security type:
Total Amortized Cost	12,792	10,297
Fair Value	12,792	10,297
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	12,792	10,297
Asset-backed securities
Available-for-sale investments by major security type:
Total Amortized Cost	573	1,715
Gross Unrealized Losses		(1)
Fair Value	573	1,714
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	573	1,715
Long-term investments
Available-for-sale investments by major security type:
Total Amortized Cost	7,896	7,896
Gross Unrealized Losses	(2,233)	(1,821)
Fair Value	5,663	6,075
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	7,896	7,896
Auction rate securities
Available-for-sale investments by major security type:
Total Amortized Cost	4,900	4,900
Gross Unrealized Losses	(688)	(661)
Fair Value	4,212	4,239
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	4,900	4,900
Marketable equity securities
Available-for-sale investments by major security type:
Total Amortized Cost	2,996	2,996
Gross Unrealized Losses	(1,545)	(1,160)
Fair Value	1,451	1,836
Contractual maturities of available-for-sale investments, Amortized Cost
Total Amortized Cost	$ 2,996	$ 2,996

Fair Value Measurements (Deta34

Fair Value Measurements (Details 3) $ in Thousands	6 Months Ended
	Jul. 04, 2015USD ($)
Auction rate securities
Reconciliation of the beginning and ending balances for the assets measured as fair value using significant unobservable inputs (Level 3):
Balance, beginning of the fiscal year	$ 4,239
Unrealized holding loss on auction rate securities, included in other comprehensive income	(27)
Balance, end of the fiscal year	4,212
Contingent consideration
Changes in liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3)
Balance, beginning of the fiscal year	46,558
Payments	(9,357)
Change in fair value	818
Balance, end of the fiscal year	$ 38,019

Fair Value Measurements (Deta35

Fair Value Measurements (Details 4) - Auction rate securities - Discounted cash flow - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Quantitative information for Level 3 Fair Value Measurements Assets
Fair value Assets	$ 4,212	$ 4,239
Discount rate (as a percent)	1.64%	1.61%
Market credit spread (as a percent)	2.95%	2.83%
Liquidity factor (as a percent)	0.00%	0.00%

Fair Value Measurements (Deta36

Fair Value Measurements (Details 5) - USD ($) $ in Thousands	Jul. 02, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Quantitative information for Level 3 Fair Value Measurements Liabilities
Impairment charge related to intangible assets		$ 0	$ 0
Apica Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Discount rate (as a percent)	23.00%
Multiple outcome discounted cash flow | Levitronix Medical
Quantitative information for Level 3 Fair Value Measurements Liabilities
Fair value Liabilities		5,782		$ 14,902
Revenue		30,000		50,000
Multiple outcome discounted cash flow | DuraHeart II Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Fair value Liabilities		5,501		5,189
Multiple outcome discounted cash flow | Apica Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Fair value Liabilities		$ 26,736		$ 26,467
Discount rate (as a percent)		5.26%		4.63%
Multiple outcome discounted cash flow | Minimum | DuraHeart II Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Probability of occurrence (as a percent)		5.00%		5.00%
Discount rate (as a percent)		5.26%		4.63%
Multiple outcome discounted cash flow | Minimum | Apica Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Probability of occurrence (as a percent)		7.50%		7.50%
Multiple outcome discounted cash flow | Maximum | DuraHeart II Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Probability of occurrence (as a percent)		67.00%		67.00%
Discount rate (as a percent)		25.00%		22.50%
Multiple outcome discounted cash flow | Maximum | Apica Acquisition
Quantitative information for Level 3 Fair Value Measurements Liabilities
Probability of occurrence (as a percent)		30.00%		30.00%

Foreign Exchange Instruments (D

Foreign Exchange Instruments (Details) $ in Thousands, € in Millions, £ in Millions	3 Months Ended		6 Months Ended
	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)	Jul. 04, 2015GBP (£)	Jul. 04, 2015EUR (€)	Jul. 04, 2015USD ($)	Jan. 03, 2015GBP (£)	Jan. 03, 2015EUR (€)	Jan. 03, 2015USD ($)
Foreign currency forward exchange details
Foreign currency exchange gain (loss) on foreign contracts	$ (1,547)	$ (420)	$ 7,943	$ (67)
Foreign currency transactions gain (loss)	$ 1,887	$ 291	$ (7,383)	$ (119)
Prepaid expenses and other assets
Foreign currency forward exchange details
Gross fair value of Derivatives not designated as hedging instruments (forward contracts)							$ 188			$ 3,759
Other accrued liabilities
Foreign currency forward exchange details
Gross fair value of Derivatives not designated as hedging instruments (forward contracts)							611			913
Not Designated | Maximum
Foreign currency forward exchange details
Approximate period forward contracts			3 months
Foreign Currency Derivatives, Hedge Term			3 months
Not Designated | Euro (sell)
Foreign currency forward exchange details
Gross notional amounts for outstanding derivatives | €						€ 11.4			€ 15.8
Not Designated | British Pound Sterling (sell)
Foreign currency forward exchange details
Gross notional amounts for outstanding derivatives | £					£ 1.3			£ 1.5
Not Designated | U.S. Dollar (sell)
Foreign currency forward exchange details
Gross notional amounts for outstanding derivatives							40,800			21,200
Not Designated | U.S. Dollar (buy) 1
Foreign currency forward exchange details
Gross notional amounts for outstanding derivatives							$ 76,800			$ 59,000

Balance Sheet and Statement o38

Balance Sheet and Statement of Operations Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Inventories
Finished goods	$ 27,457		$ 27,457		$ 24,871
Work-in-process	22,944		22,944		18,135
Raw materials	20,458		20,458		19,198
Total inventories	70,859		70,859		62,204
Property, plant and equipment, gross	104,368		104,368		103,006
Less accumulated depreciation and amortization	(54,997)		(54,997)		(51,775)
Total	49,371		49,371		51,231
Depreciation expense	2,300	$ 2,300	4,600	$ 4,400
Land, building and improvements
Inventories
Property, plant and equipment, gross	20,600		20,600		20,600
Equipment and capitalized software
Inventories
Property, plant and equipment, gross	57,295		57,295		56,696
Equipment and capitalized software | DuraHeart II Acquisition
Inventories
Property, plant and equipment, gross	1,600		1,600
Furniture and leasehold improvements
Inventories
Property, plant and equipment, gross	$ 26,473		$ 26,473		$ 25,710

Balance Sheet and Statement o39

Balance Sheet and Statement of Operations Information (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Changes in the warranty provision
Balance, beginning of the fiscal year			$ 10,639	$ 9,899
Additions			2,480	1,710
Change in estimate			614
Settlements			(5,085)	(2,258)
Balance, end of the period	$ 8,648	$ 9,351	8,648	9,351
Changes in accumulated other comprehensive loss
Balance at the beginning of the period			(22,022)
Other comprehensive loss before reclassification			4,122
Total other comprehensive income (loss)	1,385	(777)	4,122	(729)
Balance at the end of the period	$ (17,900)		$ (17,900)
Other accrued liabilities
Minimum percentage of other accrued liabilities to total current liabilities	5.00%		5.00%
Deferred revenue	$ 7,066		$ 7,066		$ 5,063
Interest Income and other
Interest income	177	201	325	425
Foreign currency, net	340	(130)	560	(187)
Other	170	488	619	568
Total interest income and other	687	$ 559	1,504	$ 806
Foreign currency items
Changes in accumulated other comprehensive loss
Balance at the beginning of the period			(20,781)
Other comprehensive loss before reclassification			4,396
Total other comprehensive income (loss)			4,396
Balance at the end of the period	(16,385)		(16,385)
Unrealized gain (loss) on available-for-sale securities
Changes in accumulated other comprehensive loss
Balance at the beginning of the period			(1,241)
Other comprehensive loss before reclassification			(274)
Total other comprehensive income (loss)			(274)
Balance at the end of the period	$ (1,515)		$ (1,515)

Goodwill and Intangible Assets,

Goodwill and Intangible Assets, net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Changes in carrying amount of goodwill
Balance, beginning of the period			$ 225,293
Foreign currency translation impact			1,285
Balance, end of period	$ 226,578		226,578		$ 225,293
Intangible assets subject to amortization:
Accumulated amortization before adjustments	(154,899)		(154,899)		(152,254)
Accumulated impairment before adjustments	(54,721)		(54,721)		(54,721)
Foreign currency translation adjustments, gross	95		95		(411)
Foreign currency translation adjustments, net	95		95		(411)
Gross Carrying Amount	223,723		223,723		223,217
Accumulated Amortization	(154,899)		(154,899)		(152,254)
Total	14,103		14,103		16,242
Accumulated impairment after adjustments	(62,421)		(62,421)		(62,421)
Total purchased intangible assets, gross	257,633		257,633		259,163
Total purchased intangible assets, net	40,313		40,313		44,488
Foreign currency translation adjustments			(4,990)		(2,954)
Amortization expense related to identifiable intangible assets (subject to amortization)	1,200	$ 1,900	2,400	$ 3,800
Estimated amortization expense for the next five fiscal years and all years thereafter
Remainder of 2015	2,306		2,306
2,016	3,392		3,392
2,017	2,520		2,520
2,018	2,106		2,106
2,019	1,712		1,712
Thereafter	2,067		2,067
Total	14,103		14,103		16,242
IPR&D asset | Apica Acquisition
Intangible assets subject to amortization:
Gross carrying amount before adjustments	26,500		26,500		26,500
Net carrying amount before adjustments	26,500		26,500		26,500
IPR&D asset | DuraHeart II Acquisition
Intangible assets subject to amortization:
Gross carrying amount before adjustments	12,400		12,400		12,400
Accumulated impairment before adjustments	(7,700)		(7,700)		(7,700)
Net carrying amount before adjustments	4,700		4,700		4,700
Patents and trademarks
Intangible assets subject to amortization:
Gross carrying amount before adjustments	43,532		43,532		43,532
Accumulated amortization before adjustments	(36,782)		(36,782)		(36,095)
Net carrying amount before adjustments	6,750		6,750		7,437
Core technology
Intangible assets subject to amortization:
Gross carrying amount before adjustments	37,180		37,180		37,180
Accumulated amortization before adjustments	(24,063)		(24,063)		(23,854)
Accumulated impairment before adjustments	(12,642)		(12,642)		(12,642)
Net carrying amount before adjustments	475		475		684
Developed technology
Intangible assets subject to amortization:
Gross carrying amount before adjustments	133,373		133,373		133,373
Accumulated amortization before adjustments	(86,721)		(86,721)		(85,613)
Accumulated impairment before adjustments	(42,079)		(42,079)		(42,079)
Net carrying amount before adjustments	4,573		4,573		5,681
Customer based relationships and other
Intangible assets subject to amortization:
Gross carrying amount before adjustments	7,243		7,243		7,243
Accumulated amortization before adjustments	(6,046)		(6,046)		(5,569)
Net carrying amount before adjustments	1,197		1,197		1,674
Pre-existing license agreements
Intangible assets subject to amortization:
Gross carrying amount before adjustments	2,300		2,300		2,300
Accumulated amortization before adjustments	(1,287)		(1,287)		(1,123)
Net carrying amount before adjustments	$ 1,013		$ 1,013		$ 1,177

Credit Facility (Details)

Credit Facility (Details) - Credit Facility - USD ($) $ in Millions	6 Months Ended
	Jul. 04, 2015	Dec. 19, 2011
Credit facility
Maximum borrowing capacity		$ 50
Minimum | LIBOR
Credit facility
Margin rate (as a percent)	0.75%
Maximum | LIBOR
Credit facility
Margin rate (as a percent)	1.25%

Legal Proceeding (Details)

Legal Proceeding (Details)	Jan. 24, 2014item
Legal Proceeding
Number of present and former officers named as defendants in a complaint filed in the United States District Court	3

Share-Based Compensation (Detai

Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Share-based compensation
Share-based compensation cost	$ 9,453	$ 7,833	$ 18,850	$ 14,615
Tax benefit for share-based compensation expense	3,141	2,731	6,101	5,003
Total share-based compensation (net of taxes)	$ 6,312	$ 5,102	$ 12,749	$ 9,612
Options
Share-based compensation
Remaining shares available for future issuance	3,200		3,200
Percentage of conversion target			100.00%
Method and assumptions on valuation of stock options
Risk free interest rate (weighted average)	1.50%	2.21%	1.52%	2.19%
Expected volatility (as a percent)	35.00%	35.00%	37.00%	37.00%
Expected option term (years)	5 years 7 months 6 days	5 years 10 months 17 days
Dividends (as a percent)	0.00%	0.00%	0.00%	0.00%
Number of options
Outstanding options at the beginning of the period (in shares)			2,737
Granted (in shares)			211
Exercised (in shares)			(802)
Forfeited or expired (in shares)			(62)
Outstanding options at the end of the period (in shares)	2,084		2,084		2,737
Outstanding options exercisable at the end of the period (in shares)	933		933
Outstanding options vested and expected to vest	1,992		1,992
Stock options, Weighted-Average Exercise Price Per Share
Outstanding options at the beginning of the period (in dollars per share)			$ 31.04
Granted (in dollars per share)			41.22
Exercised (in dollars per share)			29.25
Forfeited or expired (in dollars per share)			35.83
Outstanding options at the end of the period (in dollars per share)	$ 32.61		32.61		$ 31.04
Outstanding options exercisable at the end of the period (in dollars per share)	29.82		29.82
Outstanding options vested as of July 4, 2015 and expected	$ 32.48		$ 32.48
Weighted Average Remaining Contract Life (years)
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2			7 years 3 months 22 days		6 years 11 months 12 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2			7 years 3 months 22 days		6 years 11 months 12 days
Outstanding options exercisable			5 years 9 months 7 days
Outstanding options vested or expected			7 years 2 months 27 days
Unrecognized compensation expenses, net of estimated forfeitures	$ 8,300		$ 8,300
Weighted average period for unrecognized compensation cost expected to be recognized			1 year 7 months 2 days
Weighted average grant-date fair value (in dollars per share)			$ 14.22
Options | Minimum
Method and assumptions on valuation of stock options
Expected option term (years)			5 years 1 month 21 days	4 years 6 months 15 days
Options | Maximum
Method and assumptions on valuation of stock options
Expected option term (years)			5 years 9 months 26 days	5 years 15 days
Cost of product sales
Share-based compensation
Share-based compensation cost	675	$ 756	$ 1,458	$ 1,377
Selling, general and administrative expenses
Share-based compensation
Share-based compensation cost	6,198	4,794	12,855	8,819
Research and development
Share-based compensation
Share-based compensation cost	$ 2,580	$ 2,283	$ 4,537	$ 4,419

Share-Based Compensation (Det44

Share-Based Compensation (Details 2) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	6 Months Ended	12 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Number of units
Outstanding unvested restricted stock at the beginning of the period (in shares)	1,573
Granted (in shares)	654
Released (in shares)	(500)
Forfeited or expired (in shares)	(127)
Outstanding unvested restricted stock at the end of the period (in shares)	1,600	1,573
Weighted Average Grant-Date fair Value
Outstanding unvested restricted stock at the beginning of the year (in dollars per share)	$ 33.31
Granted (in dollars per share)	41.06
Released (in dollars per share)	33.33
Forfeited or expired (in dollars per share)	34.82
Outstanding unvested restricted stock at the end of the year (in dollars per share)	$ 36.35	$ 33.31
Weighted Average Remaining Contract Life (in years)
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms	1 year 8 months 5 days	1 year 4 months 10 days
ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsOutstandingWeightedAverageRemainingContractualTerms	1 year 8 months 5 days	1 year 4 months 10 days
Unrecognized compensation expenses, net of estimated forfeitures	$ 48.8
Weighted average period for unrecognized compensation cost expected to be recognized	2 years 8 months 27 days

Share-Based Compensation (Det45

Share-Based Compensation (Details 3) - USD ($) $ in Thousands	Sep. 22, 2014	Jul. 04, 2015	Apr. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014	Jan. 03, 2015
Share-Based Compensation
Share-based compensation cost		$ 9,453		$ 7,833	$ 18,850	$ 14,615
Performance share units
Share-Based Compensation
Shares of common stock issued							69,000
Granted (in shares)	188,000		115,000
Share-based compensation cost		1,300			$ 1,900
Number of shares issuable upon vesting					0
Change in estimate of shares					0
Unrecognized compensation expenses, net of estimated forfeitures		$ 9,900			$ 9,900
Weighted average period for unrecognized compensation cost expected to be recognized					2 years 26 days
Performance share units | Minimum
Share-Based Compensation
Percentage range of shares of common stock issued		0.00%			0.00%
Vesting period					3 years
Performance share units | Maximum
Share-Based Compensation
Percentage range of shares of common stock issued		200.00%			200.00%
Vesting period					4 years

Common and Preferred Stock (Det

Common and Preferred Stock (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 04, 2015	Jul. 04, 2015	Jan. 03, 2015	Dec. 05, 2013
Common and Preferred Stock
Unsettled and accrued liability	$ 22,391	$ 22,391	$ 20,441
Aggregate amount of common stock agreed to be repurchased		6,000
Decrease in additional-paid-in-capital		1,900
Decrease in retained earnings		4,100
December 2013 program
Common and Preferred Stock
Maximum amount for repurchase of common stock				$ 200,000
Repurchases of shares of our common stock under stock repurchase programs	4,600	22,900
Unsettled and accrued liability	300	300
Repurchased shares of common stock accrued on the consolidated balance sheet	72,100	72,100
Repurchases of shares of our common stock under stock repurchase programs	$ 22,900	22,900
Decrease in additional-paid-in-capital		8,000
Decrease in retained earnings		$ 14,900

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jul. 04, 2015	Apr. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Income Taxes
Income tax expense out of period adjustment		$ 2.3
Effective Income Tax Rate Reconciliation, Percent	30.40%		32.50%	36.40%	32.60%
Reasonably possible potential reduction in unrecognized tax benefits over the next 12 months	$ 1.5			$ 1.5

Segment and Geographic Inform48

Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 04, 2015USD ($)	Jun. 28, 2014USD ($)	Jul. 04, 2015USD ($)segment	Jun. 28, 2014USD ($)
Segment and Geographic Information
Number of operating and reporting segment | segment			1
Segment information
Product sales	$ 128,692	$ 118,063	$ 250,000	$ 243,760
HeartMate
Segment information
Product sales	113,684	101,975	218,740	211,986
CentriMag
Segment information
Product sales	13,373	13,111	27,215	26,105
PVAD and IVAD
Segment information
Product sales	815	2,497	2,546	4,749
Other
Segment information
Product sales	820	480	1,499	920
Pump
Segment information
Product sales	93,042	81,583	179,938	170,883
Non-Pump
Segment information
Product sales	34,830	36,000	68,563	71,957
Other
Segment information
Product sales	820	480	1,499	920
Domestic (i.e. United States)
Segment information
Product sales	104,293	94,172	200,386	189,777
International
Segment information
Product sales	$ 24,399	$ 23,891	$ 49,614	$ 53,983

Net Income Per Share (Details)

Net Income 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
Numerator:
Net income	$ 13,248	$ 17,413	$ 24,028	$ 35,652
Denominator:
Weighted average shares used to compute basis EPS	54,481	56,723	54,246	56,781
Dilutive effect of share-based compensation plans	780	465	909	757
Weighted average shares used to compute diluted EPS	55,261	57,188	55,155	57,538
Net income per share:
Basic (in dollars per share)	$ 0.24	$ 0.31	$ 0.44	$ 0.63
Diluted (in dollars per share)	$ 0.24	$ 0.30	$ 0.44	$ 0.62
Options
Potential common share equivalents excluded
Options to purchase shares not included in the computation of diluted net income per share because their inclusion would be anti-dilutive	184	461	257	749

Subsequent Event (Details)

Subsequent Event (Details) - Jul. 21, 2015 - Subsequent events - Merger Sub - USD ($) $ / shares in Units, $ in Millions	Total
Subsequent Event
Share price as payable consideration (in dollars per share)	$ 63.50
Number of days in go-shop period	30 days
Events occurring during Go-shop Period
Subsequent Event
Termination costs	$ 30
Events occurring after the Go-shop period
Subsequent Event
Termination costs	$ 111