Derivatives and Other Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Other Financial Instruments

Note 8. 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 currency 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 June 30, 2015, we marked these contracts to market, recording $21,000 as a current liability on the condensed consolidated balance sheet.

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 condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, in thousands:

Liability Derivatives
Derivative Instrument	Location	June 30, 2015		December 31, 2014
Foreign Currency Exchange Contracts	Other Current Assets	$	21	$	26

For the three and six month periods ended June 30, 2015, we recorded a net loss on these contracts of $21,000 and $27,000, respectively, as a component of our net loss. For the three and six month periods ended June 30, 2014, we recorded a net gain $14,000 and $23,000, respectively as a component of our net income.

The following table summarizes, in thousands, the impact of the Company’s derivatives on the condensed consolidated financial statements of operations for the three and six month periods ended June 30, 2015 and 2014:

		Amount of Gain (Loss) Recognized in Operations
Derivative	Location of Gain (loss) on Derivative	Three Months Ended June 30,					Six Month Ended June 30,
Instrument	Instrument	2015			2014		2015			2014
Foreign Currency  Exchange Contracts	Gain (loss) on foreign currency exchange rate	$	(21	)	$	14	$	(27	)	$	23