Derivatives and Other Financial Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Other Financial Instruments

14. Derivatives and Other Financial Instruments

The Company has exposure to certain risks relating to its ongoing business operations, including financial, market, political and economic risks. The following discussion provides information regarding our exposure to the risks of changing foreign currency exchange rates. The Company has not entered into these contracts for trading or speculative purposes in the past, nor do we currently anticipate entering into such contracts for trading or speculative purposes in the future. The foreign exchange contracts are used to mitigate uncertainty and volatility, and to cover underlying exposures.

Foreign Currency Forward Contracts

We manage the risk of changes in foreign currency exchange rates, primarily at our Malaysian operation, through the use of foreign currency contracts. Foreign exchange contracts are used to protect the Company from the risk that the eventual cash flows resulting from transactions in foreign currencies, including sales and purchases transacted in a currency other than the functional currency, will be adversely affected by changes in exchange rates. We report the fair value of the derivatives on our consolidated balance sheets and changes in the fair value are recognized in earnings in the period of the change.

At December 31, 2014, we marked these contracts to market, recording $26,000 as a current liability on the consolidated balance sheets. For the years ended December 31, 2014 and 2013, we recorded a net loss on these contracts of $24,000 and $14,000, respectively, as a component of our net loss.

The following table summarizes the gross fair market value of all derivative instruments, which are not designated as hedging instruments and their location in our consolidated balance sheets:

(In thousands)
Liability Derivatives
Derivative Instrument	Location	December 31, 2014			December 31, 2013
Foreign Currency Exchange Contracts	Accrued Expenses	$	26	$	14

The following table summarizes the impact of the Company’s derivatives on the consolidated financial statements of operations for the years ended December 31, 2014 and 2013:

(In thousands)
			Amount of Loss Recognized in Operations
Derivative	Location of Loss on		Year Ended Decenber 31,
Instrument	Derivative Instrument		2014	2013
Foreign Currency Exchange Contracts	Loss on foreign currency exchange rate	$	24	$	13