8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2007

JAZZ TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-32832	20-3320580
(Commission File Number)	(IRS Employer Identification No.)

4321 Jamboree Road

Newport Beach, California 92660

(Address of principal executive offices, including Zip Code)

Registrant's telephone number, including area code: (949) 435-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

          On May 14, 2007, Jazz Technologies, Inc. (the “Company”) issued a press release announcing its fiscal 2007 first quarter financial results. A copy of the press release is attached as Exhibit 99.1 to this current report and is incorporated herein by reference.

          The information in the item, including Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

On May 8, 2007, the Board of Directors (the “Board”) of the Company adopted, as recommended by the Compensation Committee, a new policy for the compensation of non-employee directors effective February 19, 2007. Non-employee directors of the Company will receive, until changed by the Board, fees for service on the Board and its committees as listed in the table below:

Annual retainer for non-employee directors	$	25,000
Fee to non-employee directors for attending an in-person Board meeting	$	2,500
Fee to non-employee directors for attending a telephonic Board meeting	$	1,250
Annual retainer for Chairman of the Audit Committee	$	10,000
Annual retainer for Chairman of the Compensation Committee	$	5,000
Annual retainer for Chairman of the Nominating and Corporate Governance Committee	$	5,000

Annual retainers as specified above are to be paid quarterly in advance. Fees for attendance at Board meetings during any quarter are to be paid quarterly at the beginning of the quarter following the applicable Board meeting(s). In addition, Board members will continue to be entitled to reimbursement of reasonable out-of-pocket expenses incurred by them in attending Board meetings.

Also, on May 8, 2007, the Board, as recommended by the Compensation Committee, approved a change to the annual base salary for the fiscal year 2007 for one of the Company’s executives as follows, with such amended annual base salary to be effective at the beginning of the next pay period commencing after May 8, 2007:

Officer Name	Annual Base Salary
Allen R. Grogan Senior Vice President, Chief Legal Officer and Secretary	$350,000

2007 Executive and Management Bonus Targets

The Compensation Committee and the Board established on May 8, 2007 target bonuses for certain executive officers. Bonus amounts will be based upon performance objectives to be established by the Compensation Committee.

The Compensation Committee and the Board established a target bonus for the Company’s Chief Executive Officer at 300% of his year-end annualized base salary, a target bonus for the Company’s Chief Financial and Administrative Officer at 200% of his year-end annualized base salary, and a target bonus for the Company’s Chief Legal Officer at 75% of his year end annualized base salary. The actual bonus award payable to any of these executives will be between 0% and 100% of the target bonus, based on performance objectives to be established and subject to the discretion of the Compensation Committee to reduce the amount payable.

Stock Option Grants

The Board approved on May 8, 2007, upon the recommendation of the Compensation Committee, the grant of options to purchase shares of the Company’s common stock pursuant to the 2006 Equity Incentive Plan to the executive officers and directors named below, such grants to be effective upon the effective date of the Form S-8 registration statement registering the common stock subject to the 2006 Equity Incentive Plan. Each of the stock options will be governed by the terms of the Jazz Technologies, Inc. 2006 Equity Incentive Plan Option Agreement, will have an exercise price equal to the fair market value on the date of the grant, and will expire ten years from the date of grant. The first 33-1/3 percent of the shares subject to the option vest upon the first anniversary of the date of grant and the remaining option shares vest over the following two years on a quarterly basis so long as the executive officer remains in service with the Company, subject to the Change of Control Agreements described below.

Officer or Director Name and Title	Number of shares of common stock subject to option grant
Gilbert F. Amelio, Ph.D Chairman and Chief Executive Officer		695,000
Paul A. Pittman Executive Vice President and Chief Financial and Administrative Officer		625,000
Allen R. Grogan Senior Vice President, Chief Legal Officer and Secretary		250,000
Jon C. Madonna Director and Chair of Audit Committee		43,000
Harold L. Clark, Ed.D Director and Chair of Compensation Committee		39,000
John P. Kensey Director and Chair of Nominating and Governance Committee		35,000
Liad Meidar Director		35,000

Change of Control Agreements

On May 8, 2007, the Board, upon recommendation of the Compensation Committee, also approved Change of Control Agreements for certain of the Company’s executive officers, providing for payment of severance benefits and acceleration of vesting of equity grants. Under these change in control agreements, Dr. Amelio will receive 2.99 times his annual base salary plus his target bonus and 18 months of continued COBRA coverage, if a change of control occurs and he is terminated without cause or for good reason within one year of the change of control. Similarly, Messrs. Pittman and Grogan will receive twice their annual base salary plus target bonus and 18 months of continued COBRA coverage, if a change of control occurs and they are terminated without cause or for good reason within one year of the change of control. In addition, if Dr. Amelio or Messrs. Pittman or Grogan are terminated without cause or for good reason within one year of a change of control, all stock options grants or similar equity arrangements that are otherwise subject to vesting over a period of 48 months following the termination will immediately accelerate and become vested.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.	Exhibit Description
99.1	Press release dated May 14, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Jazz Technologies, Inc. Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Jazz Technologies, Inc.
Dated: May 14, 2007	By:	/s/ Allen R. Grogan
		Allen R. Grogan
		Chief Legal Officer and Secretary

EXHIBIT INDEX

Exhibit No.	Exhibit Description
99.1	Press release dated May 14, 2007.

EX-99.1

	Investor Relations Contacts
	Kate Sidorovich
	(415) 445-3236
	kate@marketstreetpartners.com
	Jon Avidor
	(415) 445-3234
	jon@marketstreetpartners.com

Jazz Technologies, Inc. Announces First Quarter 2007 Financial Results

Newport Beach, CA - (May 14^th, 2007) - Jazz Technologies (Amex: JAZ) today announced financial results for its fiscal first quarter ended March 30, 2007. Jazz Technologies consummated its acquisition of Jazz Semiconductor, Inc. on February 16, 2007 and, accordingly, Jazz Semiconductor’s financial results for the period between January 1, 2007 and February 16, 2007 are not reflected in Jazz Technologies’ first quarter GAAP results.

First Quarter Financial Highlights

· First quarter GAAP revenue was $22.5 million and pro forma revenue was $48.1 million;

· First quarter GAAP net loss was $11.7 million; and pro forma net loss was $20.8 million;

· First quarter pro forma adjusted EBITDA of Jazz Semiconductor as a stand-alone entity was $0.5 million.

The pro forma results assume the acquisition of Jazz Semiconductor occurred on January 1, 2007 and are derived from the unaudited consolidated financial statements of Jazz Semiconductor for the period from January 1, 2007 to February 16, 2007 and the unaudited consolidated financial statements of Jazz Technologies for the three months ended March 30, 2007. Pro forma net loss excludes approximately $3.8 million in non-recurring charges relating to the write off of IP R&D incurred in connection with the acquisition.

Revenue Performance

On a pro forma basis, Jazz posted $48.1 million in revenue, a net decline of 13.9% from $55.9 million for the three months ended March 31, 2006. The revenue decline was driven primarily by lower than expected contribution from the standard process technologies business, which was impacted by the industry-wide inventory correction. Pro forma revenue from the specialty process technologies has increased year-over-year to $38.5 million.

“While we intend to continue offering our standard processes to our customers, we believe that our true competitive advantage is in our specialty process technologies offerings,” said Gil Amelio, chairman and chief executive officer of Jazz Technologies. “Going forward, revenue from standard processes should remain stable but may contribute a smaller percentage of total revenues as our specialty business expands.”

Net Income (loss)

Pro forma net loss was $20.8 million compared to a net loss of $11.2 million in the first quarter of 2006. The increase in pro forma net loss year-over-year reflects a decline in capacity utilization and an increase in the company’s operating expenses, attributable primarily to costs related to the acquisition of Jazz Semiconductor, personnel reductions, and other public company expenses.

Business Highlights

· Capacity expansion at the Newport Beach fab;

· Introduced new specialty process technologies offerings, including a 0.18-micron Bipolar CMOS DMOS (BCD) high voltage process enabling System-on-Chip (SOC) architectures for complex power management applications and a 0.13-micron SiGe BiCMOS process designed for high speed wireless and optical communication applications;

· Launched a comprehensive cost reduction program.

Cost Reduction Program

During the first quarter, Jazz Technologies initiated a workforce reduction of approximately 55 people. Total fiscal year 2007 savings from this initiative are forecasted at approximately $3.6 million, net of severance. The 2008 year impact is estimated at approximately $6.0 million.

Share Buy Backs

On January 11, 2007, Jazz Technologies’ Board of Directors authorized a stock and warrant repurchase program of up to $50 million. As of April 30, 2007, the company had repurchased 2.96 million shares and 16.53 million warrants in the open market, using approximately $28.8 million in cash.

Second Quarter 2007 Business Outlook

Based upon current business conditions, Jazz currently expects second quarter 2007 sales to be in the $48 to $50 million range. 

“The underlying industry weakness and operating inefficiencies inherited from Jazz Semiconductor have presented the new management team with temporary challenges,” added Amelio. “We believe that the inventory correction is largely behind us and expect to have sequential revenue growth during the rest of 2007 as we gradually exit the correction. The improved utilization rates and cost reduction measures should also have a positive impact on our performance.”

Said Paul Pittman, chief financial and administrative officer of Jazz Technologies, “Our goal is to manage our cost structure in a way that allows us to generate free cash flow at any reasonable level of fab loading. This can be achieved through creation of more efficient purchasing processes, increased operating flexibility to respond more quickly to the cyclical changes of the semiconductor industry as well as thoughtful cost cutting. We will provide regular updates on our progress toward this goal.”

Reconciliation of Pro Forma Net Loss to Pro Forma Adjusted EBITDA

Jazz Technologies’ management team believes that pro forma Adjusted Earnings before Interest, Income Taxes, Depreciation and Amortization (“Adjusted EBITDA”) provides a valuable perspective on the underlying operating performance of the Company in the presence of significant non-cash and one-time charges incurred in connection with the acquisition of Jazz Semiconductor. In addition, Adjusted EBITDA is presented because management believes EBITDA and similar measures are frequently used by securities analysts, investors and others in the evaluation of semiconductor companies. Adjusted EBITDA is calculated, and reconciled to net loss, as follows:

(All figures in thousands)	Pro-Forma
	Q107
Pro-Forma Net loss	$	(20,776	)
Interest (Income)		(2,408	)
Interest Expense		3,778
Income & Other Taxes		117
Depreciation, Amortization and Purchase Price Accounting Impact of D&A1		13,913
Merger Cost2		2,973
Restructuring Cost3		1,568
Parent/Public Company Cost4		904
Other5		410
Adjusted EBITDA6	$	479

¹ Includes additional depreciation and amortization expense as a result of fair market valuation and the purchase price accounting impact of the same.

² Acquisition related cost that Jazz Semiconductor expensed prior to its acquisition on February 16, 2007.

³ Costs associated with the departure of the former chief executive officer of Jazz Semiconductor and reduction in personnel announced by Jazz Technologies in Q1 2007.

⁴ Includes expenses incurred by the Company related to reporting, filing and other costs associated with a publicly traded company, and additional management costs incurred during the first quarter of 2007, following the acquisition of Jazz Semiconductor.

⁵ Includes Jazz Semiconductor R&D expense related to the purchase of technology from Polar Fab, management fees and stock compensation expense incurred prior to its acquisition.

⁶ This represents the pro forma adjusted EBITDA of Jazz Semiconductor as a stand-alone entity, excluding any one-time charges, expenses as a result of the acquisition or parent/public company costs incurred during the first quarter of 2007.

Adjusted EBITDA is not defined under GAAP and should not be considered in isolation or as a substitute for net earnings and other consolidated earnings data prepared in accordance with GAAP or as a measure of the Company’s profitability. Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

About Jazz Technologies and Jazz Semiconductor

Jazz Technologies™ (AMEX: JAZ) is the parent company of its wholly owned subsidiary, Jazz Semiconductor, Inc.  Jazz Semiconductor^® is an independent wafer foundry focused primarily on specialty CMOS process technologies, including High Voltage CMOS, SiGe BiCMOS and RFCMOS for the manufacture of highly integrated analog and mixed-signal semiconductor devices. The company's specialty process technologies are designed for customers who seek to produce analog and mixed-signal semiconductor devices that are smaller and more highly integrated, power-efficient, feature-rich and cost-effective than those produced using standard process technologies. Jazz Semiconductor’s customers target the wireless and high-speed wireline communications, consumer electronics, automotive and industrial end markets. Jazz Semiconductor's U.S. wafer fabrication facilities, and its and Jazz Technologies’ executive offices, are located in Newport Beach, CA.     For more information, please visit and http://www.jazztechnologies.com and http://www.jazzsemi.com.       

Forward-looking Statements

This press release, and other statements Jazz Technologies or Jazz Semiconductor may make, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements relating to Jazz Technologies’ future financial or business performance, the industry and business outlook for the second quarter of 2007 and 2007 as a whole, the anticipated impact of cost reductions, and expected changes in the ratio of standard and specialty processes. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “expect,” “anticipate,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” “result” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” and similar expressions.

Forward-looking statements are based largely on expectations and projections about expected financial and business performance for 2007 as well as future events and future trends and are subject to numerous assumptions, risks and uncertainties, which change over time. Jazz Technologies’ actual results could differ materially from those anticipated in this press release and you should not place any undue reliance on such forward looking statements. Factors that could cause actual performance to differ from these forward-looking statements include industry conditions, Jazz Technologies’ ability to implement, and the effectiveness of, cost saving measures, Jazz Technologies’ ability to continue to grow its specialty business and the other risk factors and uncertainties disclosed in Jazz Technologies’ filings with the SEC and general economic and financial market conditions. Jazz Technologies’ filings with the SEC are accessible on the SEC’s website at http://www.sec.gov. Forward-looking statements speak only as of the date they are made.

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