TowerJazz Presents First Quarter 2013 Results and Second Quarter Guidance
MIGDAL HAEMEK,
Highlights
-
First quarter revenues of
$113 million ; -
Forecasts revenues of
$122 to $132 million in the second quarter of 2013, representing 13 percent mid-range growth; - Quarterly record numbers of full mask tape outs;
-
Reduced 2013 and 2014 principal payments from
$105 million to $30 million , extending a low interest of LIBOR+3.5 percent bank loan ($131 million ) to final maturity in 2016; -
End of quarter cash balance of
$120 million , shareholders’ equity at$190 million and strong balance sheet ratios.
CEO Perspective
Concluded Mr. Ellwanger, “We spoke of the three industry megatrends: green everything, wireless everything, smart everything. With the benefit of seeing the big picture of our business and our strong vectors in each of these 3 trends, we are excited to update throughout this year and show the full benefits of our strategy over the years to come."
First quarter 2013 results summary
First quarter 2013 revenue was
The statement of operations for the first quarter 2013 includes a
positive effect of
On a non-GAAP basis, as described and reconciled below, gross and
operating profits are
On a non-GAAP basis, net profit in the first quarter of 2013 was
With our continuous cost reduction efforts, we maintained GAAP basis net
loss in the first quarter of 2013 at
Financial Guidance
TowerJazz forecasts revenues of
Conference Call and Web Cast Announcement
TowerJazz will host a conference call to discuss first quarter 2013
results today,
To participate, please call: 1-888-668-9141 (U.S. toll-free number) or
+972-3-918-0644 (international) and mention ID code: TOWER-JAZZ. Callers
in
About TowerJazz
As previously announced, beginning with the first quarter of 2007, the Company has been presenting its financial statements in accordance with U.S. GAAP.
This release, including the financial tables below, presents other
financial information that may be considered "non-GAAP financial
measures" under Regulation G and related reporting requirements
promulgated by the
As applied in this release, the term Earnings Before Interest Tax Depreciation and Amortization (EBITDA) consists of loss, according to U.S. GAAP, excluding amortization related to a lease agreement early termination, interest and financing expenses (net), tax, depreciation and amortization and stock based compensation expenses. EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies.
EBITDA and the non-GAAP financial information presented herein should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, per share data or other income or cash flow statement data prepared in accordance with GAAP and is not necessarily consistent with the non-GAAP data presented in previous filings.
Forward Looking Statements
This press release includes forward-looking statements, which are
subject to risks and uncertainties. Actual results may vary from those
projected or implied by such forward-looking statements and you should
not place any undue reliance on such forward-looking statements.
Potential risks and uncertainties include, without limitation, risks and
uncertainties associated with: (i) maintaining existing customers and
attracting additional customers, (ii) cancellation of orders, (iii)
failure to receive orders currently expected, (iv) the cyclical nature
of the semiconductor industry and the resulting periodic overcapacity,
fluctuations in operating results and future average selling price
erosion, (v) material amount of fixed costs, debt and other liabilities
and having sufficient funds to satisfy our fixed costs, debt obligations
and other short-term and long-term liabilities on a timely basis, (vi)
operating our facilities at high utilization rates which is critical in
order to defray the high level of fixed costs associated with operating
a foundry and reduce our losses, (vii) our ability to satisfy the
covenants stipulated in our agreements with our lenders, banks and bond
holders, (viii) our ability to capitalize on potential increases in
demand for foundry services, (ix) meeting the conditions set in the
approval certificates received from the Israeli Investment Center under
which we received a significant amount of grants in past years, (x) our
ability to accurately forecast financial performance, which is affected
by limited order backlog and lengthy sales cycles, (xi) the purchase of
equipment to increase capacity, the completion of the equipment
installation, technology transfer and raising the funds therefor, (xii)
the concentration of our business in the semiconductor industry, (xiii)
product returns, (xiv) our ability to maintain and develop our
technology processes and services to keep pace with new technology,
evolving standards, changing customer and end-user requirements, new
product introductions and short product life cycles, (xv) competing
effectively, (xvi) achieving acceptable device yields, product
performance and delivery times, (xvii) possible production or yield
problems in our wafer fabrication facilities, (xviii) our ability to
manufacture products on a timely basis, (xix) our dependence on
intellectual property rights of others, our ability to operate our
business without infringing others’ intellectual property rights and our
ability to enforce our intellectual property against infringement, (xxi)
our ability to fulfill our obligations and meet performance milestones
under our agreements, including successful execution of our agreement
with an Asian entity signed in 2009, (xxiii) retention of key employees
and recruitment and retention of skilled qualified personnel, (xxiv)
exposure to inflation, currency exchange and interest rate fluctuations
and risks associated with doing business locally and internationally,
(xxv) fluctuations in the market price of our traded securities may
adversely affect our reported GAAP non-cash financing expenses, (xxvi)
issuance of ordinary shares as a result of conversion and/or exercise of
any of our convertible securities may dilute the shareholdings of
current and future shareholders, (xxvii) successfully achieving ramping
new technologies at TowerJazz's
A more complete discussion of risks and uncertainties that may affect
the accuracy of forward-looking statements included in this press
release or which may otherwise affect our business is included under the
heading "Risk Factors" in Tower’s most recent filings on Forms 20-F,
| TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (dollars in thousands) | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2013 | 2012 | 2012 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
|
ASSETS |
||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash, short-term deposits and designated deposits | $ | 119,707 | $ | 133,398 | $ | 158,226 | ||||||
| Trade accounts receivable | 79,957 | 79,354 | 87,892 | |||||||||
| Other receivables | 8,084 | 5,379 | 4,385 | |||||||||
| Inventories | 61,575 | 65,570 | 62,450 | |||||||||
| Other current assets | 16,756 | 14,804 | 16,575 | |||||||||
| Total current assets | 286,079 | 298,505 | 329,528 | |||||||||
| LONG-TERM INVESTMENTS | 13,306 | 12,963 | 12,895 | |||||||||
| PROPERTY AND EQUIPMENT, NET | 407,991 | 434,468 | 477,463 | |||||||||
| INTANGIBLE ASSETS, NET | 43,692 | 47,936 | 53,850 | |||||||||
| GOODWILL | 7,000 | 7,000 | 7,000 | |||||||||
| OTHER ASSETS, NET | 13,088 | 13,768 | 16,532 | |||||||||
| TOTAL ASSETS | $ | 771,156 | $ | 814,640 | $ | 897,268 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short term debt | $ | 30,086 | $ | 49,923 | $ | 42,031 | ||||||
| Trade accounts payable | 68,132 | 81,372 | 94,997 | |||||||||
| Deferred revenue | 5,795 | 1,784 | 5,745 | |||||||||
| Other current liabilities | 40,628 | 36,240 | 62,053 | |||||||||
| Total current liabilities | 144,641 | 169,319 | 204,826 | |||||||||
| LONG-TERM DEBT | 305,574 | 288,954 | 385,107 | |||||||||
| LONG-TERM CUSTOMERS' ADVANCES | 7,347 | 7,407 | 7,813 | |||||||||
|
EMPLOYEE RELATED LIABILITIES |
73,397 | 77,963 | 97,198 | |||||||||
| DEFERRED TAX LIABILITY | 27,219 | 26,804 | 19,375 | |||||||||
| OTHER LONG-TERM LIABILITIES | 22,596 | 24,168 | 25,882 | |||||||||
| Total liabilities | 580,774 | 594,615 | 740,201 | |||||||||
| SHAREHOLDERS' EQUITY | 190,382 | 220,025 | 157,067 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 771,156 | $ | 814,640 | $ | 897,268 | ||||||
| TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three months ended | |||||||||||||||
| March 31, | December 31, | March 31, | |||||||||||||
| 2013 | 2012 | 2012 | |||||||||||||
| GAAP | GAAP | GAAP | |||||||||||||
| REVENUES | $ | 112,647 | $ | 147,587 | $ | 168,013 | |||||||||
| COST OF REVENUES | 110,072 | 139,017 | 145,265 | ||||||||||||
| GROSS PROFIT | 2,575 | 8,570 | 22,748 | ||||||||||||
| OPERATING COSTS AND EXPENSES | |||||||||||||||
| Research and development | 9,495 | 7,332 | 8,000 | ||||||||||||
| Marketing, general and administrative | 10,045 | 10,755 | 12,500 | ||||||||||||
| Amortization related to a lease agreement early termination | 1,866 | -- | -- | ||||||||||||
| 21,406 | 18,087 | 20,500 | |||||||||||||
|
OPERATING PROFIT (LOSS) |
(18,831 | ) | (9,517 | ) | 2,248 | ||||||||||
| INTEREST EXPENSES, NET | (8,027 | ) | (8,647 | ) | (8,163 | ) | |||||||||
| OTHER FINANCING INCOME (EXPENSE), NET | 986 | (7,614 | ) | (10,366 | ) | ||||||||||
| OTHER INCOME (EXPENSE), NET | (260 | ) | 78 | -- | |||||||||||
| LOSS BEFORE INCOME TAX | (26,132 | ) | (25,700 | ) | (16,281 | ) | |||||||||
| INCOME TAX BENEFIT (EXPENSE) | 2,981 | 2,311 | (3,036 | ) | |||||||||||
| NET LOSS FOR THE PERIOD | $ | (23,151 | ) | $ | (23,389 | ) | $ | (19,317 | ) | ||||||
| Basic loss per ordinary share | $ | (0.96 | ) | $ | (1.05 | ) | $ | (0.91 | ) | ||||||
| TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||
| RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||
| Three months ended | Three months ended | Three months ended | ||||||||||||||||||||||||||||||
| March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | |||||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||
| non-GAAP | Adjustments (see a, b, c, d, e, f below) | GAAP | ||||||||||||||||||||||||||||||
| REVENUES |
|
$ |
112,647 |
|
$ |
147,587 |
|
$ |
-- |
|
$ |
-- |
$ | 112,647 | $ | 147,587 | ||||||||||||||||
| COST OF REVENUES | 78,947 | 98,279 | 31,125 | (a) | 40,738 |
(a) |
|
110,072 | 139,017 | |||||||||||||||||||||||
| GROSS PROFIT | 33,700 | 49,308 | (31,125 | ) | (40,738 | ) | 2,575 | 8,570 | ||||||||||||||||||||||||
| OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||||||||
| Research and development | 9,347 | 7,138 | 148 | (b) | 194 |
(b) |
|
9,495 | 7,332 | |||||||||||||||||||||||
| Marketing, general and administrative | 9,403 | 9,737 | 642 | (c) | 1,018 |
(c) |
|
10,045 | 10,755 | |||||||||||||||||||||||
| Amortization related to a lease agreement early termination | -- | -- | 1,866 | (d) | -- |
|
|
1,866 | -- | |||||||||||||||||||||||
| 18,750 | 16,875 | 2,656 | 1,212 | 21,406 | 18,087 | |||||||||||||||||||||||||||
| OPERATING PROFIT (LOSS) | 14,950 | 32,433 | (33,781 | ) | (41,950 | ) | (18,831 | ) | (9,517 | ) | ||||||||||||||||||||||
| INTEREST EXPENSES, NET | (8,027 | ) | (8,647 | ) | -- | (e) | -- |
(e) |
|
(8,027 | ) | (8,647 | ) | |||||||||||||||||||
| OTHER FINANCING INCOME (EXPENSE), NET | -- | -- | 986 | (e) | (7,614 | ) |
(e) |
|
986 | (7,614 | ) | |||||||||||||||||||||
| OTHER INCOME (EXPENSE), NET | (260 | ) | 78 | -- | -- | (260 | ) | 78 | ||||||||||||||||||||||||
| PROFIT (LOSS) BEFORE INCOME TAX | 6,663 | 23,864 | (32,795 | ) | (49,564 | ) | (26,132 | ) | (25,700 | ) | ||||||||||||||||||||||
| INCOME TAX BENEFIT (EXPENSE) | (190 | ) | (1,937 | ) | 3,171 | (f) | 4,248 |
(f) |
|
2,981 | 2,311 | |||||||||||||||||||||
| NET PROFIT (LOSS) FOR THE PERIOD |
|
$ |
6,473 |
|
$ |
21,927 |
|
$ |
(29,624 |
) |
|
$ |
(45,316 |
) |
$ | (23,151 | ) | $ | (23,389 | ) | ||||||||||||
| (a) |
Includes depreciation and amortization expenses in the amounts of $30,966 and $40,539 and stock based compensation expenses in the amounts of $159 and $199 for the three months ended March 31, 2013 and December 31, 2012 respectively. |
|
| (b) |
Includes depreciation and amortization expenses in the amounts of $30 and $33 and stock based compensation expenses in the amounts of $118 and $161 for the three months ended March 31, 2013 and December 31, 2012 respectively. |
|
| (c) |
Includes depreciation and amortization expenses in the amounts of $204 and $208 and stock based compensation expenses in the amounts of $438 and $810 for the three months ended March 31, 2013 and December 31, 2012 respectively. |
|
| (d) |
Non cash amortization related to an early termination of an office building lease contract |
|
| (e) |
Non-GAAP financing expense, net includes only interest on an accrual basis. |
|
| (f) |
Non-GAAP income tax expenses include taxes paid during the period. |
|
| (*) |
Basic earnings per ordinary share according to non-GAAP results is $0.27 and $0.99 for the three months ended March 31, 2013 and December 31, 2012, respectively and the weighted average number of ordinary shares outstanding is 24.1 million and 22.2 million for these periods. |
|
|
Fully diluted earnings per share according to non-GAAP results would be $0.13 and $0.45 for the three months ended March 31, 2013 and December 31, 2012, respectively, and the weighted average number of shares outstanding would be 48.9 million and 48.9 million for these periods. Fully diluted earnings results and quantities of number of shares outstanding exclude $22.0 million and 22.7 million for the three months ended March 31, 2013 and December 31, 2012, respectively, of securities that carry exercise price or conversion ratios, which are above the average price of the company’s stock. |
Source: TowerJazz
TowerJazz Investor Relations
Noit Levi, +972 4 604 7066
noitle@towersemi.com
or
CCG
Investor Relations
Ehud Helft / Kenny Green, 646-201 9246
towersemi@ccgisrael.com