XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.23.1

Derivative Financial Instruments | 3 Months Ended
--- | ---
Mar. 31, 2023
Derivative Financial Instruments [Abstract] |
Derivative Financial Instruments | 7. Derivative Financial Instruments The Company’s Korean subsidiary from time to time has entered into zero cost collar contracts to hedge the risk of changes in the functional-currency-equivalent cash flows attributable to currency rate changes on U.S. dollar denominated revenues. Details of the zero cost collar contracts as of March 31, 2023 are as follows (in thousands):
Date of transaction |  | Total notional amount |  | Month of settlement
January 04, 2022 |  | $ | 15,000 |  | April 2023 to June 2023
March 07, 2022 |  | $ | 24,000 |  | July 2023 to December 2023
April 27, 2022 |  | $ | 33,000 |  | April 2023 to December 2023
March 08, 2023 |  | $ | 18,000 |  | July 2023 to December 2023
Details of the zero cost collar contracts as of December 31, 2022 are as follows (in thousands):
Date of transaction |  | Total notional amount |  | Month of settlement
January 04, 2022 |  | $ | 30,000 |  | January 2023 to June 2023
March 07, 2022 |  | $ | 24,000 |  | July 2023 to December 2023
April 27, 2022 |  | $ | 42,000 |  | January 2023 to December 2023
The zero cost collar contracts qualify as cash flow hedges under ASC 815, “Derivatives and Hedging,” since at both the inception of the contracts and on an ongoing basis, the hedging relationship was and is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the contracts. The fair values of the Company’s outstanding zero cost collar contracts recorded as assets and liabilities as of March 31, 2023 and December 31, 2022 are as follows (in thousands):
Derivatives designated as hedging instruments: |  |  | March 31, 2023 |  |  | December 31, 2022 |
Asset Derivatives: |  |  |  |  |  |  |
Zero cost collars | Other current assets |  | $ | 2 |  |  | $ | — |
Liability Derivatives: |  |  |  |  |  |  |  |  |
Zero cost collars | Other current liabilities |  | $ | 2,641 |  |  | $ | 2,015 |
Offsetting of derivative assets and liabilities as of March 31, 2023 is as follows (in thousands):
|  | Gross amounts of recognized Assets/liabilities |  |  | Gross amounts offset in the balance sheets |  |  | Net amounts of Assets/liabilities presented in the balance sheets |  |  | Gross amounts not offset in the balance sheets |  |  | Net amount |
As of March 31, 2023 |  |  |  |  |  |  |  | Financial instruments |  |  | Cash collateral pledged |  |  |
Asset Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  | $ | 2,641 |  |  | $ | — |  |  | $ | 2,641 |  |  | $ | — |  |  | $ | (1,820 | ) |  | $ | 821 |
Offsetting of derivative liabilities as of December 31, 2022 is as follows (in thousands):
|  | Gross amounts of recognized liabilities |  |  | Gross amounts offset in the balance sheets |  |  | Net amounts of liabilities presented in the balance sheets |  |  | Gross amounts not offset in the balance sheets |  |  | Net amount |
As of December 31, 2022 |  |  |  |  |  |  |  | Financial instruments |  |  | Cash collateral pledged |  |  |
Liability Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Zero cost collars |  | $ | 2,015 |  |  | $ | — |  |  | $ | 2,015 |  |  | $ | — |  |  | $ | (1,940 | ) |  | $ | 75 |
For derivative instruments that are designated and qualify as cash flow hedges, gains or losses on the derivative aside from components excluded from the assessment of effectiveness are reported as a component of accumulated other comprehensive income or loss (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative, representing hedge components excluded from the assessment of effectiveness, are recognized in current earnings. The following table summarizes the impact of derivative instruments on the consolidated statements of operations for the three months ended March 31, 2023 and 2022 (in thousands):
Derivatives in ASC 815 Cash Flow Hedging Relationships |  | Amount of Loss Recognized in AOCI on Derivatives |  | Location/Amount of Loss Reclassified from AOCI Into Statement of Operations |  | Location/Amount of Loss Recognized in Statement of Operations on Derivatives |
|  | Three Months Ended March 31, |  |  |  | Three Months Ended March 31, |  |  |  | Three Months Ended March 31, |
|  | 2023 |  |  | 2022 |  |  |  | 2023 |  |  | 2022 |  |  |  | 2023 |  |  | 2022 |
Zero cost collars |  | $ | (1,135 | ) |  | $ | (1,264 | ) | Net sales |  | $ | (603 | ) |  | $ | (762 | ) | Other income, net |  | $ | (54 | ) |  | $ | (129 | )
|  | $ | (1,135 | ) |  | $ | (1,264 | ) |  |  | $ | (603 | ) |  | $ | (762 | ) |  |  | $ | (54 | ) |  | $ | (129 | )
As of March 31, 2023, the amount expected to be reclassified from accumulated other comprehensive loss into loss within the next 12 months is $1,757 thousand. The Company set aside cash deposit to the counterparty, Standard Chartered Bank Korea Limited (“SC”), as required for the zero cost collar contracts. This cash deposit is recorded as hedge collateral on the consolidated balance sheets. Cash deposits as of March 31, 2023 and December 31, 2022 are as follows (in thousands):
Counterparty |  | March 31, 2023 |  |  | December 31, 2022 |
SC |  | $ | 1,000 |  |  | $ | 1,000 |
Total |  | $ | 1,000 |  |  | $ | 1,000 |
The Company is required to deposit additional cash collateral with Nomura Financial Investment (Korea) Co., Ltd. (“NFIK”) and SC for any exposure in excess of $500 thousand. As of March 31, 2023, $1,820 thousand of additional cash collateral was required by NFIK, and recorded as hedge collateral on the consolidated balance sheet. As of December 31, 2022, $1,840 thousand and $100 thousand of additional cash collateral were required by NFIK and SC, respectively, and recorded as hedge collateral on the consolidated balance sheet. These zero cost collar contracts may be terminated by the counterparties if the Company’s total cash and cash equivalents is less than $30,000 thousand at the end of a fiscal quarter, unless a waiver is obtained.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration