Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended |
Jun. 30, 2014 | |
Document and Entity Information [Abstract] | ' |
Document Type | '10-Q |
Amendment Flag | 'false |
Entity Registrant Name | 'Jazz Technologies, Inc. |
Entity Central Index Key | '0001337675 |
Document Period End Date | 30-Jun-14 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q2 |
Current Fiscal Year End Date | '--12-31 |
Entity Filer Category | 'Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 100 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $67,958 | $51,351 |
Receivables: | ' | ' |
Trade receivables, net of allowance for doubtful accounts of $0 at June 30, 2014 and December 31, 2013 | 21,367 | 20,426 |
Other receivables | 4,532 | 9,835 |
Inventories | 29,952 | 26,297 |
Deferred tax asset | 3,944 | 3,846 |
Other current assets | 1,223 | 1,303 |
Total current assets | 128,976 | 113,058 |
Long-term investments | 1,071 | 778 |
Property, plant and equipment, net | 73,331 | 78,345 |
Intangible assets, net | 26,121 | 28,302 |
Goodwill | 7,000 | 7,000 |
Other assets | 4,140 | 3,333 |
Total assets | 240,639 | 230,816 |
Current liabilities: | ' | ' |
Current maturities of debentures | 40,592 | ' |
Accounts payable | 22,699 | 15,290 |
Accrued compensation and benefits | 5,735 | 5,985 |
Deferred revenues | 2,052 | 2,492 |
Other current liabilities | 4,430 | 5,205 |
Total current liabilities | 75,508 | 28,972 |
Long term liabilities: | ' | ' |
Long-term debt from banks | 19,100 | 19,100 |
Notes | 41,596 | 81,181 |
Deferred tax liability | 4,510 | 2,429 |
Employee related liabilities | 2,551 | 2,551 |
Other long-term liabilities | 13,442 | 12,780 |
Total liabilities | 156,707 | 147,013 |
Stockholders' equity: | ' | ' |
Ordinary shares of $1 par value; Authorized: 200 shares; Issued: 100 shares; Outstanding: 100 shares; | ' | ' |
Additional paid-in capital | 74,986 | 63,576 |
Cumulative stock based compensation | 2,481 | 2,173 |
Accumulated other comprehensive earnings | 2,227 | 3,357 |
Retained earnings | 4,238 | 14,697 |
Total stockholders' equity | 83,932 | 83,803 |
Total liabilities and stockholders' equity | $240,639 | $230,816 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Condensed Consolidated Balance Sheets [Abstract] | ' | ' |
Trade receivables, allowance for doubtful accounts | $0 | $0 |
Ordinary shares, par value | $1 | $1 |
Ordinary shares, authorized | 200 | 200 |
Ordinary shares, issued | 100 | 100 |
Ordinary shares, outstanding | 100 | 100 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed Consolidated Statements of Operations [Abstract] | ' | ' | ' | ' |
Revenues | $47,458 | $37,407 | $94,377 | $74,181 |
Cost of revenues | 38,636 | 30,465 | 78,555 | 60,364 |
Gross profit | 8,822 | 6,942 | 15,822 | 13,817 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 2,845 | 3,097 | 5,560 | 5,976 |
Selling, general and administrative | 3,494 | 3,085 | 6,749 | 5,821 |
Amortization related to a lease agreement early termination | ' | 1,866 | ' | 3,732 |
Total operating expenses | 6,339 | 8,048 | 12,309 | 15,529 |
Operating income (loss) | 2,483 | -1,106 | 3,513 | -1,712 |
Financing expense, net | -4,522 | -3,562 | -18,322 | -7,047 |
Loss before income taxes | -2,039 | -4,668 | -14,809 | -8,759 |
Income tax benefit | 710 | 1,545 | 4,350 | 3,215 |
Net loss | ($1,329) | ($3,123) | ($10,459) | ($5,544) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed Consolidated Statements of Comprehensive Loss [Abstract] | ' | ' | ' | ' |
Net loss | ($1,329) | ($3,123) | ($10,459) | ($5,544) |
Change in employees plan assets and benefit obligations | -565 | -440 | -1,130 | -880 |
Comprehensive loss | ($1,894) | ($3,563) | ($11,589) | ($6,424) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities: | ' | ' |
Net loss | ($10,459) | ($5,544) |
Adjustments to reconcile net loss for the period to net cash provided by operating activities: | ' | ' |
Loss from notes exchange | 9,817 | ' |
Depreciation and amortization of intangible assets | 21,591 | 21,749 |
Notes accretion and amortization of deferred financing costs | 3,907 | 3,284 |
Stock based compensation expense | 308 | 82 |
Changes in operating assets and liabilities: | ' | ' |
Trade receivables | -941 | -709 |
Inventories | -3,655 | -6,090 |
Other receivables and assets | 1,942 | -5,683 |
Accounts payable | 2,813 | 4,650 |
Due to related parties, net | 1,591 | 847 |
Accrued compensation and benefits | -250 | -458 |
Deferred Revenue | -440 | 191 |
Other current liabilities | -1,027 | -495 |
Deferred tax liability, net | -4,162 | ' |
Employee related liabilities and other long-term liabilities | 519 | -72 |
Net cash provided by operating activities | 21,554 | 11,752 |
Investing activities: | ' | ' |
Purchases of property and equipment | -11,135 | -9,273 |
Proceeds related to property and equipment | 1,224 | 911 |
Net cash used in investing activities | -9,911 | -8,362 |
Financing activities: | ' | ' |
Proceeds from issuance of notes, net | 9,214 | ' |
Debt repayment | -4,250 | ' |
Net cash provided by financing activities | 4,964 | ' |
Net increase in cash and cash equivalents | 16,607 | 3,390 |
Cash and cash equivalents at beginning of period | 51,351 | 43,306 |
Cash and cash equivalents at end of period | 67,958 | 46,696 |
Non cash activities: | ' | ' |
Investments in property, plant and equipment | 5,498 | 2,640 |
Equity increase arising from exchange of straight to convertible debt | 9,609 | ' |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid during the period for interest | 4,835 | 3,756 |
Cash paid during the period for income taxes | ' | ' |
Business_and_Formation
Business and Formation | 6 Months Ended |
Jun. 30, 2014 | |
Business and Formation [Abstract] | ' |
Business and Formation | ' |
Note 1: Business and Formation | |
Unless specifically noted otherwise, as used throughout these notes to the consolidated financial statements, "Jazz", "Company" refers to the business of Jazz Technologies, Inc. including its wholly owned subsidiaries, and "Jazz Semiconductor" refers only to the business of Jazz Semiconductor, Inc. | |
The Company | |
Since the merger with Tower in 2008, the Company is a 100% subsidiary of Tower. | |
The Company is based in Newport Beach, California and is an independent semiconductor foundry focused on specialty process technologies for the manufacture of analog intensive mixed-signal semiconductor devices. The Company's specialty process technologies include advanced analog, radio frequency, high voltage, bipolar and silicon germanium bipolar complementary metal oxide ("SiGe") semiconductor processes, for the manufacture of analog and mixed-signal semiconductors. Its customers' analog and mixed-signal semiconductor devices are used in cellular phones, wireless local area networking devices, digital TVs, set-top boxes, gaming devices, switches, routers and broadband modems. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Summary of Significant Accounting Policies | ' | ||||||||||||||||
Note 2: Summary of Significant Accounting Policies | |||||||||||||||||
Basis of Presentation and Consolidation | |||||||||||||||||
The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles ("US GAAP") requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company's most recent Annual Report on Form 10-K. | |||||||||||||||||
The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company's consolidated financial position at June 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows for the three months and six months ended June 30, 2014 and June 30, 2013. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2014 presentation. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. | |||||||||||||||||
Concentrations | |||||||||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable. | |||||||||||||||||
The Company generally does not require collateral for insurance of receivables. An allowance for doubtful accounts is provided for those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers . | |||||||||||||||||
Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of June 30, 2014 and December 31, 2013 consists of: | |||||||||||||||||
30-Jun-14 | December 31, 2013 | ||||||||||||||||
Customer 1 | 37 | % | 36 | % | |||||||||||||
Customer 2 | * | 12 | |||||||||||||||
Net revenues from significant customers representing 10% or more of net revenues consist of: | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Customer A | 32 | % | 26 | % | 31 | % | 23 | % | |||||||||
Customer B | * | * | * | 10 | |||||||||||||
Customer C | * | * | * | 10 | |||||||||||||
* Indicates less than 10% | |||||||||||||||||
As a result of the Company's concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position, could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. | |||||||||||||||||
The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company. | |||||||||||||||||
Initial Adoption of New Standards | |||||||||||||||||
In May 2014, the FASB and IASB issued their final standard on revenue from contracts with customers. The core principle of the standard, issued as ASU 2014-9 by the FASB and IFRS 15 by the IASB, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. | |||||||||||||||||
The guidance sets out five steps an entity should undertake to fulfill the core principle of the standard as follows: identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||||||
For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods therein. Early application is not permitted. Adoption of this guidance is not expected to have a significant impact on the Company's financial position or results of operations. |
Other_Balance_Sheet_Details
Other Balance Sheet Details | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Other Balance Sheet Details [Abstract] | ' | ||||||||||||||||
Other Balance Sheet Details | ' | ||||||||||||||||
Note 3: Other Balance Sheet Details | |||||||||||||||||
Inventories | |||||||||||||||||
Inventories, net of reserves, consist of the following on June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
30-Jun-14 | December 31, 2013 | ||||||||||||||||
Raw material | $ | 3,585 | $ | 4,434 | |||||||||||||
Work in process | 22,867 | 15,618 | |||||||||||||||
Finished goods | 3,500 | 6,245 | |||||||||||||||
$ | 29,952 | $ | 26,297 | ||||||||||||||
Property, Plant and Equipment | |||||||||||||||||
Property, plant and equipment consist of the following on June 30, 2014 and December 31, 2013 (in thousands): | |||||||||||||||||
Useful life | 30-Jun-14 | 31-Dec-13 | |||||||||||||||
(in years) | |||||||||||||||||
Building improvements | 14-Oct | $ | 27,016 | $ | 26,809 | ||||||||||||
Machinery and equipment | 7-Mar | 211,002 | 196,812 | ||||||||||||||
238,018 | 223,621 | ||||||||||||||||
Accumulated depreciation | (164,687 | ) | (145,276 | ) | |||||||||||||
$ | 73,331 | $ | 78,345 | ||||||||||||||
Intangible Assets | |||||||||||||||||
Intangible assets consist of the following on June 30, 2014 (in thousands): | |||||||||||||||||
Useful life (in years) | Cost | Accumulated Amortization | Net | ||||||||||||||
Technology | 4;9 | $ | 3,300 | $ | 2,367 | $ | 933 | ||||||||||
Patents and other core technology rights | 9 | 15,100 | 9,709 | 5,391 | |||||||||||||
In-process research and development | -- | 1,800 | 1,800 | -- | |||||||||||||
Customer relationships | 15 | 2,600 | 1,003 | 1,597 | |||||||||||||
Trade name | 9 | 5,200 | 3,343 | 1,857 | |||||||||||||
Facilities lease | 19 | 33,500 | 17,157 | 16,343 | |||||||||||||
Total identifiable intangible assets | $ | 61,500 | $ | 35,379 | $ | 26,121 | |||||||||||
Intangible assets consist of the following on December 31, 2013 (in thousands): | |||||||||||||||||
Useful life (in years) | Cost | Accumulated Amortization | Net | ||||||||||||||
Technology | 4;9 | $ | 3,300 | $ | 2,046 | $ | 1,254 | ||||||||||
Patents and other core technology rights | 9 | 15,100 | 8,870 | 6,230 | |||||||||||||
In-process research and development | -- | 1,800 | 1,800 | -- | |||||||||||||
Customer relationships | 15 | 2,600 | 916 | 1,684 | |||||||||||||
Trade name | 9 | 5,200 | 3,054 | 2,146 | |||||||||||||
Facilities lease | 19 | 33,500 | 16,512 | 16,988 | |||||||||||||
Total identifiable intangible assets | $ | 61,500 | $ | 33,198 | $ | 28,302 | |||||||||||
The amortization related to technology, patents and other core technologies rights, and facilities lease is charged to cost of revenues. The amortization related to customer relationships and trade name is charged to operating expenses. |
Wells_Fargo_AssetBased_Revolvi
Wells Fargo Asset-Based Revolving Credit Line | 6 Months Ended |
Jun. 30, 2014 | |
Wells Fargo Asset-Based Revolving Credit Line [Abstract] | ' |
Wells Fargo Asset-Based Revolving Credit Line | ' |
Note 4: Wells Fargo Asset-Based Revolving Credit Line | |
In December 2013, the Company entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company ("Wells Fargo"), to amend the previous loan and security agreement, for a five-year secured asset-based revolving credit line in the total amount of up to $70 million, maturing in December 2018 (the "Credit Line Agreement"). Loans under the Credit Line Agreement bear interest at a rate equal to, at lender's option, either the lender's prime rate plus a margin ranging from 0.50% to 1.0% or the LIBOR rate plus a margin ranging from 1.75% to 2.25% per annum. | |
The outstanding borrowing availability varies from time to time based on the levels of the Company's eligible accounts receivable, eligible equipment, eligible inventories and other terms and conditions described in the Credit Line Agreement. The Credit Line Agreement is secured by the assets of the Company. The Credit Line Agreement contains customary covenants and other terms, including customary events of default. If any event of default occurs, Wells Fargo may declare due immediately, all borrowings under the facility and foreclose on the collateral. Furthermore, an event of default under the Credit Line Agreement would result in an increase in the interest rate on any amounts outstanding. The Company's obligations pursuant to the Credit Line Agreement are not guaranteed by Tower. | |
Borrowing availability under the Credit Line Agreement as of June 30, 2014 was approximately $49 million , of which approximately $23.7 million has been utilized as such date . As of June 30, 2014, the Company was in compliance with all the covenants under this facility. |
Notes
Notes | 6 Months Ended |
Jun. 30, 2014 | |
Notes [Abstract] | ' |
Notes | ' |
Note 5: Notes | |
Introduction | |
As of June 30, 2014, the Company had approximately $45million principal amount of Notes outstanding due June 2015 and approximately $58 million principal amount of Notes outstanding due December 2018. Description and composition are as follows: | |
$45 million Jazz 2010 Notes due June 2015: | |
In July 2010, the Company issued notes in the principal amount of approximately $94 million due June 2015 (the "2010 Notes"). Interest on the 2010 Notes at a rate of 8% per annum is payable semiannually. As of June 30, 2014 the outstanding principal amount of 2010 Notes was $45 million, see also the 2014 Exchange Agreement (as defined and discussed below). | |
The 2010 Notes are unsecured obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2014 Notes (as defined below) and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company's up to $70 million secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2010 Notes are not guaranteed by Tower. The 2010 Notes shall rank senior to all existing and future subordinated debt of the Company. | |
Since July 1, 2013, the Company has had the right to redeem some or all of the 2010 Notes for cash at a redemption price equal to par plus accrued and unpaid interest plus a redemption premium equal to 4% if redemption occurs prior to July 1, 2014 and 2% if redemption occurs between July 1, 2014 and maturity. | |
Holders of the 2010 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2010 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture. | |
The indenture governing the 2010 Notes contains certain customary covenants as set forth in the Indenture. | |
If there is an event of default on the 2010 Notes, all of the 2010 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture. | |
The Company's obligations under the 2010 Notes are guaranteed by the Company's wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor. | |
$58 million Jazz 2014 Notes due December 2018: | |
In March 2014, the Company, certain of its domestic subsidiaries and Tower entered into an exchange agreement (the "2014 Exchange Agreement") with certain note-holders (the "2014 Participating Holders") according to which the Company issued new unsecured 8% convertible senior notes due December 2018 (the "2014 Notes") in exchange for approximately $45 million in aggregate principal amount of 2010 Notes. | |
In addition, the Company, Tower and certain of the 2014 Participating Holders (the "Purchasers") entered into a purchase agreement (the "Purchase Agreement") pursuant to which the Purchasers purchased $10 million aggregate principal amount of 2014 Notes for cash considerations. | |
The 2014 Participating Holders and Purchasers may submit a conversion request with the Company with respect to their 2014 Notes to be settled at the Company's discretion through cash from Jazz or ordinary shares from Tower, in which event Tower has to issue ordinary shares based on a conversion price of $10.07 per share, reflecting a 20 percent premium over the average closing price for Tower's ordinary shares for the five trading days ending on the day prior to the signing date of the 2014 Exchange Agreement and Purchase Agreement. | |
The 2014 Notes are unsecured senior obligations of the Company, rank equally with all other existing and future unsecured senior indebtedness of the Company, including the 2010 Notes, and are effectively subordinated to all existing and future secured indebtedness of the Company, including the Company's secured Credit Line Agreement with Wells Fargo (see Note 4 above), to the extent of the value of the collateral securing such indebtedness. The 2014 Notes rank senior to all existing and future subordinated debt. The 2014 Notes are jointly and severally guaranteed on a senior unsecured basis by the Company's domestic subsidiaries. The 2014 Notes are not guaranteed by Tower. | |
Holders of the 2014 Notes are entitled, subject to certain conditions and restrictions, to require the Company to repurchase the 2014 Notes at par plus accrued interest and a 1% redemption premium in the event of certain change of control transactions as set forth in the Indenture governing the 2014 Notes. | |
The Indenture contains certain customary covenants including covenants restricting the Company's ability and the ability of its subsidiaries to, among other things, incur additional debt, incur additional liens, make specified payments and make certain asset sales. | |
If there is an event of default on the 2014 Notes, all of the 2014 Notes may become immediately due and payable, subject to certain conditions set forth in the Indenture. | |
Jazz's obligations under the 2014 Notes are guaranteed by Jazz's wholly owned domestic subsidiaries. The Company has not provided condensed consolidated financial information for such subsidiaries because the subsidiaries have no independent assets or operations, the subsidiary guarantees are full and unconditional and joint and several and the subsidiaries of the Company, other than the subsidiary guarantors, are minor. | |
As of June 30, 2014, approximately $58 million principal amount of 2014 Notes was outstanding. | |
The Company concluded the exchange should not be recognized as a troubled debt restructuring in accordance with the provisions of ASC 470-60 "Modifications and Extinguishments". In accordance with the provisions of ASC 470-50 the Company concluded that the exchange resulted in an extinguishment of the old debt and the issuance of a new convertible debt to be recorded at fair value. As described above, certain of the 2014 Notes were issued in exchange for certain of the 2010 Notes. Since the 2014 Notes were not traded and no quotes were available, the Company determined the fair value of the 2014 Notes using the present value technique. The 2014 Exchange Agreement resulted in an expense of approximately $9.8 million, which has been recorded in the statement of operations report as non-cash one-time financing expense for the six months ended June 30, 2014 and the convertible feature has been recorded in equity. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Taxes [Abstract] | ' |
Income Taxes | ' |
Note 6: Income Taxes | |
In 2013, the U.S. tax authorities commenced an audit of the Company's 2011 tax returns, and asked the Company for certain reports and data in connection with said year's tax returns. While there is no assurance that the Company will not be required to pay additional taxes pursuant to said audit, no tax adjustments have been requested to date. | |
As described above, the 2014 Exchange Agreement resulted in the recognition of a $9.8 million one-time non cash cost included in financing expenses, net. The tax benefit has been recorded entirely in the statements of operations for the three months ended March 31, 2014 and this one-time non cash cost has not and will not impact the Company's projected annual effective tax rate to be applied to year-to-date net profit or loss before income taxes excluding this one-time non cash cost. |
Employee_Benefit_Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2014 | |
Employee Postretirement Benefit Plans [Abstract] | ' |
Employee Postretirement Benefit Plans | ' |
Note 7: Employee Benefit Plans | |
The pension and other post retirement benefit plans amount to $0.5 million and $0.4 million income for the three months ended June 30, 2014 and 2013, respectively. For the six months ended June 30, 2014 and 2013 amounts were $1.1 million and $0.8 million income, respectively. |
Employee_Stock_Option_Expense
Employee Stock Option Expense | 6 Months Ended |
Jun. 30, 2014 | |
Employee Stock Option Expense [Abstract] | ' |
Employee Stock Option Expense | ' |
Note 8: Employee Stock Option Expense | |
During the six months ended June 30, 2014, 5,000 options were awarded. For the three months ended June 30, 2014 and 2013, the Company recorded $0.1 million and immaterial amount, respectively of compensation expenses relating to options granted to employees. For the six months ended June 30, 2014 and 2013, the Company recorded $0.3 million and $0.1 million, respectively of compensation expenses relating to options granted to employees, respectively. |
Related_Party_Transactions
Related Party Transactions | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Related Party Transactions | ' | ||||||||
Note 9: Related Party Transactions: | |||||||||
Related Party Transactions consist of the following (in thousands): | |||||||||
As of June 30, 2014 | As of December 31, 2013 | ||||||||
Due from related parties (included in the accompanying balance sheets) | $ | 4,721 | $ | 6,406 | |||||
Due to related parties (included in the accompanying balance sheets) | $ | 398 | $ | 146 | |||||
Related parties' balances are with Tower and TowerJazz Japan Ltd. ("TJP") and are mainly for purchases and payments on behalf of the other party, capital expenditures' related transactionsand service charges. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
Note 10: Commitments and Contingencies | |
Leases | |
The Company leases its fabrication facilities and headquarters under lease contracts that may be extended until 2027, through the exercise of options at Jazz's sole discretion to extend the lease periods from 2017 to 2022 and from 2022 to 2027. In 2010, the properties which the Company leases for its fabrication facilities and headquarters were sold to a real estate investment firm based in Irvine, California. In connection with the sale, the Company negotiated amendments to its operating leases that confirm the Company's ability to remain in the fabrication facilities through 2027 as described above. In the amendments to its leases, Jazz secured various contractual safeguards designed to limit and mitigate any adverse impact of construction activities on its fabrication operations. In addition, the most recent lease amendment set forth certain obligations of the Company and the landlord, including certain noise abatement actions at the fabrication facility. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policy) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Summary of Significant Accounting Policies [Abstract] | ' | ||||||||||||||||
Basis of Presentation and Consolidation | ' | ||||||||||||||||
Basis of Presentation and Consolidation | |||||||||||||||||
The Company prepares its consolidated financial statements in accordance with SEC and U.S. generally accepted accounting principles ("US GAAP") requirements and includes all adjustments of a normal recurring nature that are necessary to fairly present its condensed consolidated results of operations, financial position, and cash flows for all periods presented. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Interim period results are not necessarily indicative of full year results. This quarterly report should be read in conjunction with the Company's most recent Annual Report on Form 10-K. | |||||||||||||||||
The condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the Company's consolidated financial position at June 30, 2014 and December 31, 2013, and the consolidated results of its operations and cash flows for the three months and six months ended June 30, 2014 and June 30, 2013. All intercompany accounts and transactions have been eliminated. Certain amounts have been reclassified in order to conform to 2014 presentation. | |||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The Company measures its financial assets and liabilities in accordance with US GAAP. For financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities. | |||||||||||||||||
Concentrations | ' | ||||||||||||||||
Concentrations | |||||||||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable. | |||||||||||||||||
The Company generally does not require collateral for insurance of receivables. An allowance for doubtful accounts is provided for those amounts that were determined to be doubtful of collection. The Company performs ongoing credit evaluations of its customers . | |||||||||||||||||
Accounts receivable from significant customers representing 10% or more of the net accounts receivable balance as of June 30, 2014 and December 31, 2013 consists of: | |||||||||||||||||
30-Jun-14 | December 31, 2013 | ||||||||||||||||
Customer 1 | 37 | % | 36 | % | |||||||||||||
Customer 2 | * | 12 | |||||||||||||||
Net revenues from significant customers representing 10% or more of net revenues consist of: | |||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Customer A | 32 | % | 26 | % | 31 | % | 23 | % | |||||||||
Customer B | * | * | * | 10 | |||||||||||||
Customer C | * | * | * | 10 | |||||||||||||
* Indicates less than 10% | |||||||||||||||||
As a result of the Company's concentration of its customer base, loss or cancellation of business from, or significant changes in scheduled deliveries of products sold to these customers or a change in their financial position, could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. | |||||||||||||||||
The Company operates a single manufacturing facility located in Newport Beach, California. A major interruption in the manufacturing operations at this facility would have a material adverse affect on the consolidated financial position and results of operations of the Company. | |||||||||||||||||
Initial Adoption of New Standards | ' | ||||||||||||||||
Initial Adoption of New Standards | |||||||||||||||||
In May 2014, the FASB and IASB issued their final standard on revenue from contracts with customers. The core principle of the standard, issued as ASU 2014-9 by the FASB and IFRS 15 by the IASB, is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. | |||||||||||||||||
The guidance sets out five steps an entity should undertake to fulfill the core principle of the standard as follows: identify the contract(s) with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation. | |||||||||||||||||
For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods therein. Early application is not permitted. Adoption of this guidance is not expected to have a significant impact on the Company's financial position or results of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Accounts Receivable [Member] | ' | ||||||||||||||||
Concentration Risk [Line Items] | ' | ||||||||||||||||
Schedule of Concentration of Risk | ' | ||||||||||||||||
30-Jun-14 | December 31, 2013 | ||||||||||||||||
Customer 1 | 37 | % | 36 | % | |||||||||||||
Customer 2 | * | 12 | |||||||||||||||
* Indicates less than 10% | |||||||||||||||||
Net Revenues [Member] | ' | ||||||||||||||||
Concentration Risk [Line Items] | ' | ||||||||||||||||
Schedule of Concentration of Risk | ' | ||||||||||||||||
Three months ended | Six months ended | ||||||||||||||||
30-Jun-14 | 30-Jun-13 | 30-Jun-14 | 30-Jun-13 | ||||||||||||||
Customer A | 32 | % | 26 | % | 31 | % | 23 | % | |||||||||
Customer B | * | * | * | 10 | |||||||||||||
Customer C | * | * | * | 10 | |||||||||||||
* Indicates less than 10% |
Other_Balance_Sheet_Details_Ta
Other Balance Sheet Details (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Other Balance Sheet Details [Abstract] | ' | ||||||||||||||||
Schedule of Inventories | ' | ||||||||||||||||
30-Jun-14 | December 31, 2013 | ||||||||||||||||
Raw material | $ | 3,585 | $ | 4,434 | |||||||||||||
Work in process | 22,867 | 15,618 | |||||||||||||||
Finished goods | 3,500 | 6,245 | |||||||||||||||
$ | 29,952 | $ | 26,297 | ||||||||||||||
Schedule of Property and Equipment | ' | ||||||||||||||||
Useful life | 30-Jun-14 | 31-Dec-13 | |||||||||||||||
(in years) | |||||||||||||||||
Building improvements | 14-Oct | $ | 27,016 | $ | 26,809 | ||||||||||||
Machinery and equipment | 7-Mar | 211,002 | 196,812 | ||||||||||||||
238,018 | 223,621 | ||||||||||||||||
Accumulated depreciation | (164,687 | ) | (145,276 | ) | |||||||||||||
$ | 73,331 | $ | 78,345 | ||||||||||||||
Schedule of Intangible Assets | ' | ||||||||||||||||
Useful life (in years) | Cost | Accumulated Amortization | Net | ||||||||||||||
Technology | 4;9 | $ | 3,300 | $ | 2,367 | $ | 933 | ||||||||||
Patents and other core technology rights | 9 | 15,100 | 9,709 | 5,391 | |||||||||||||
In-process research and development | -- | 1,800 | 1,800 | -- | |||||||||||||
Customer relationships | 15 | 2,600 | 1,003 | 1,597 | |||||||||||||
Trade name | 9 | 5,200 | 3,343 | 1,857 | |||||||||||||
Facilities lease | 19 | 33,500 | 17,157 | 16,343 | |||||||||||||
Total identifiable intangible assets | $ | 61,500 | $ | 35,379 | $ | 26,121 | |||||||||||
Intangible assets consist of the following on December 31, 2013 (in thousands): | |||||||||||||||||
Useful life (in years) | Cost | Accumulated Amortization | Net | ||||||||||||||
Technology | 4;9 | $ | 3,300 | $ | 2,046 | $ | 1,254 | ||||||||||
Patents and other core technology rights | 9 | 15,100 | 8,870 | 6,230 | |||||||||||||
In-process research and development | -- | 1,800 | 1,800 | -- | |||||||||||||
Customer relationships | 15 | 2,600 | 916 | 1,684 | |||||||||||||
Trade name | 9 | 5,200 | 3,054 | 2,146 | |||||||||||||
Facilities lease | 19 | 33,500 | 16,512 | 16,988 | |||||||||||||
Total identifiable intangible assets | $ | 61,500 | $ | 33,198 | $ | 28,302 |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Related Party Transactions [Abstract] | ' | ||||||||
Schedule of Related Party Balances | ' | ||||||||
As of June 30, 2014 | As of December 31, 2013 | ||||||||
Due from related parties (included in the accompanying balance sheets) | $ | 4,721 | $ | 6,406 | |||||
Due to related parties (included in the accompanying balance sheets) | $ | 398 | $ | 146 |
Business_and_Formation_Details
Business and Formation (Details) (Tower [Member]) | Jun. 30, 2014 |
Tower [Member] | ' |
Noncontrolling Interest [Line Items] | ' |
Interest in subsidiary, Jazz Technologies, Inc. | 100.00% |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (Customer Concentration Risk [Member]) | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||||||
Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | Net Revenues [Member] | ||||||||
Major Customer One [Member] | Major Customer One [Member] | Major Customer Two [Member] | Major Customer Two [Member] | Major Customer A [Member] | Major Customer A [Member] | Major Customer A [Member] | Major Customer A [Member] | Major Customer B [Member] | Major Customer B [Member] | Major Customer B [Member] | Major Customer B [Member] | Major Customer C [Member] | Major Customer C [Member] | Major Customer C [Member] | Major Customer C [Member] | ||||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Concentration risk, percentage | 37.00% | 36.00% | ' | [1] | 12.00% | 32.00% | 26.00% | 31.00% | 23.00% | ' | [1] | ' | [1] | ' | [1] | 10.00% | ' | [1] | ' | [1] | ' | [1] | 10.00% |
[1] | Indicates less than 10% |
Other_Balance_Sheet_Details_Sc
Other Balance Sheet Details (Schedule of Inventories) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Balance Sheet Details [Abstract] | ' | ' |
Raw materials | $3,585 | $4,434 |
Work in process | 22,867 | 15,618 |
Finished goods | 3,500 | 6,245 |
Inventory, net | $29,952 | $26,297 |
Other_Balance_Sheet_Details_Sc1
Other Balance Sheet Details (Schedule of Property, Plant and Equipment) (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | Building Improvements [Member] | Building Improvements [Member] | Building Improvements [Member] | Building Improvements [Member] | Machinery and Equipment [Member] | Machinery and Equipment [Member] | Machinery and Equipment [Member] | Machinery and Equipment [Member] | ||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Useful life | ' | ' | ' | ' | '10 years | '14 years | ' | ' | '3 years | '7 years |
Property, plant and equipment, gross | $238,018 | $223,621 | $27,016 | $26,809 | ' | ' | $211,002 | $196,812 | ' | ' |
Accumulated depreciation | -164,687 | -145,276 | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment, net | $73,331 | $78,345 | ' | ' | ' | ' | ' | ' | ' | ' |
Other_Balance_Sheet_Details_Sc2
Other Balance Sheet Details (Schedule of Intangible Assets) (Details) (USD $) | 6 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Identifiable intangible assets, cost | 61,500 | 61,500 |
Identifiable intangible assets, accumulated amortization | 35,379 | 33,198 |
Identifiable intangible assets, net | 26,121 | 28,302 |
Technology [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Identifiable intangible assets, cost | 3,300 | 3,300 |
Identifiable intangible assets, accumulated amortization | 2,367 | 2,046 |
Identifiable intangible assets, net | 933 | 1,254 |
Technology [Member] | Minimum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '4 years | '4 years |
Technology [Member] | Maximum [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '9 years | '9 years |
Patents and Other Core Technology Rights [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '9 years | '9 years |
Identifiable intangible assets, cost | 15,100 | 15,100 |
Identifiable intangible assets, accumulated amortization | 9,709 | 8,870 |
Identifiable intangible assets, net | 5,391 | 6,230 |
In- Process Research and Development [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | ' | ' |
Identifiable intangible assets, cost | 1,800 | 1,800 |
Identifiable intangible assets, accumulated amortization | 1,800 | 1,800 |
Identifiable intangible assets, net | ' | ' |
Customer Relationships [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '15 years | '15 years |
Identifiable intangible assets, cost | 2,600 | 2,600 |
Identifiable intangible assets, accumulated amortization | 1,003 | 916 |
Identifiable intangible assets, net | 1,597 | 1,684 |
Trade Name [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '9 years | '9 years |
Identifiable intangible assets, cost | 5,200 | 5,200 |
Identifiable intangible assets, accumulated amortization | 3,343 | 3,054 |
Identifiable intangible assets, net | 1,857 | 2,146 |
Facilities Lease [Member] | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Useful life | '19 years | '19 years |
Identifiable intangible assets, cost | 33,500 | 33,500 |
Identifiable intangible assets, accumulated amortization | 17,157 | 16,512 |
Identifiable intangible assets, net | 16,343 | 16,988 |
Wells_Fargo_AssetBased_Revolvi1
Wells Fargo Asset-Based Revolving Credit Line (Details) (Revolving Credit Line [Member], USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2014 |
Line of Credit Facility [Line Items] | ' |
Term | '5 years |
Maturity | 31-Dec-18 |
Maximum borrowing amount | $70 |
Borrowing availability | 49 |
Amount outstanding | $23.70 |
Minimum [Member] | Prime Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Basis spread | 0.50% |
Minimum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Basis spread | 1.75% |
Maximum [Member] | Prime Rate [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Basis spread | 1.00% |
Maximum [Member] | LIBOR [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Basis spread | 2.25% |
Notes_Details
Notes (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Notes [Abstract] | ' | ' |
Loss from notes exchange | $9,817,000 | ' |
Revolving Credit Facility [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Maturity | 31-Dec-18 | ' |
Maximum borrowing amount | 70,000,000 | ' |
2010 Notes [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt issuance date | 1-Jul-10 | ' |
Maturity | 30-Jun-15 | ' |
Annual rate | 8.00% | ' |
Principal amount of debt issued | 94,000,000 | ' |
Principal outstanding | 45,000,000 | ' |
Amount exchanged | 45,000,000 | ' |
Premium rate on redemption of debt, before benchmark date | 4.00% | ' |
Premium rate on redemption of debt, after benchmark date and until maturity | 2.00% | ' |
Redemption premium rate benchmark date | 1-Jul-14 | ' |
Premium rate on redemption of debt, in the event of certain change of control transactions | 1.00% | ' |
2014 Notes [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Debt issuance date | 25-Mar-14 | ' |
Maturity | 31-Dec-18 | ' |
Annual rate | 8.00% | ' |
Principal outstanding | 58,000,000 | ' |
Repurchase amount | $10,000,000 | ' |
Conversion price | $10.07 | ' |
Premium rate on redemption of debt, in the event of certain change of control transactions | 1.00% | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Income Taxes [Abstract] | ' | ' |
Loss from notes exchange | $9,817 | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Postretirement Benefit Plans [Abstract] | ' | ' | ' | ' |
Pension and other post retirement benefit plans income | $565 | $440 | $1,130 | $880 |
Employee_Stock_Option_Expense_
Employee Stock Option Expense (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Employee Stock Option Expense [Abstract] | ' | ' | ' | ' |
Options granted by Tower to Company employees | ' | ' | 5,000 | ' |
Compensation expense related to options granted to employees | $100 | ' | $308 | $82 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Related Party Transactions [Abstract] | ' | ' |
Due from related parties (included in the accompanying balance sheets) | $4,721 | $6,406 |
Due to related parties (included in the accompanying balance sheets) | $398 | $146 |