TowerJazz Presents Strong Revenue and Margins Growth in Second Quarter 2012 Financial Results: Revenues of $168.6 Million, Up 21% Year-over-Year With an EBITDA of $52 Million
MIGDAL HAEMEK,
TowerJazz, the global specialty foundry leader, today announced financial results for the second quarter ended
Second Quarter 2012 Highlights
- Revenues of
$168.6 million , up 21 percent year-over-year compared with$139.7 million ; - Revenues for the first half of 2012 are
$76 million higher, or 29% as compared to the first half of 2011; - EBITDA of
$52 million ,$11 million up or 28 percent quarter over quarter and 42% up year-over-year excluding the onetime acquisition gain last year; - Non-GAAP gross and operating margins at 40% and 31% respectively as compared to 36% and 26% in the second quarter of 2011, respectively;
- Non-GAAP net profit of
$45 million and net margin of 27% as compared to$28 million and 20% net margin in the second quarter of 2011; - End of quarter cash balance of
$171 million as compared to$101 million as ofDecember 31, 2011 and$158 million as ofMarch 31, 2012 ; - In accordance with its acquisition plan, executed a cost reduction plan to increase efficiency of the Japanese facility, including a reduction in force, and additional cost reduction measures, enabling it to improve its margins by greater than
$30 million on an annual basis; - Net cash from operating activities of
$33 million , or$42 million excluding one-time reorganization payments of$9 million .
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CEO Perspective
"We are pleased with our results demonstrating strong first half year-over-year revenue growth coupled with much better margins in the second quarter of 2012," said
Ellwanger concluded: "Considering the actions that drove the improved margins as demonstrated in the second quarter and the fact that third quarter and forward looking mix are higher margin products, we expect the third quarter to follow the second quarter margin trend."
Second quarter 2012 results summary
Second quarter 2012 revenue reached
During the second quarter of 2012, in accordance with its acquisition plan and the Japanese notification laws, the Company executed a cost reduction plan to increase its efficiency of its Japanese facility, including reduction in force of 280 employees from its Japanese employee base, enabling improved margins by greater than
On a non-GAAP basis, as described and reconciled below, the second quarter 2012 gross profit was
Operating profit on a non-GAAP basis in the second quarter of 2012 was
On a GAAP basis, comparing to the second quarter of 2011, revenues are up
On a non-GAAP basis, net profit in the second quarter of 2012 was
EBITDA for the second quarter of 2012 was
The Company's cash and short-term deposits balance as of
Financial Guidance
TowerJazz forecasts revenues of
Conference Call and Web Cast Announcement
TowerJazz will host a conference call to discuss second quarter 2012 results today,
To participate, please call: 1-888-407-2553 (U.S. toll-free number) or +972-3-918-0610 (international) and mention ID code: TOWER-JAZZ. Callers in
As previously announced, beginning with the fourth 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 acquisition related and reorganization costs and one time gain from acquisition, 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.
About TowerJazz
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 debt and other liabilities and having sufficient funds to satisfy our debt obligations and other 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 approximately
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)
June 30, March 31, December 31,
2012 2012 2011
(Unaudited) (Unaudited)
A S S E T S
CURRENT ASSETS
Cash and short-term deposits $ 170,661 $ 158,226 $ 101,149
Trade accounts receivable 91,928 87,892 75,350
Other receivables 6,783 4,385 5,000
Inventories 64,294 62,450 69,024
Other current assets 14,716 16,575 15,567
Total current assets 348,382 329,528 266,090
LONG-TERM INVESTMENTS 12,555 12,895 12,644
PROPERTY AND EQUIPMENT, NET 472,592 477,463 498,683
INTANGIBLE ASSETS, NET 52,620 53,850 58,737
GOODWILL 7,000 7,000 7,000
OTHER ASSETS, NET 14,715 16,532 14,067
TOTAL ASSETS $ 907,864 $ 897,268 $ 857,221
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short term debt $ 41,619 $ 42,031 $ 48,255
Trade accounts payable 96,743 94,997 111,620
Deferred revenue 4,835 5,745 5,731
Other current liabilities 66,608 62,053 64,654
Total current liabilities 209,805 204,826 230,260
LONG-TERM DEBT 402,234 385,107 301,610
LONG-TERM CUSTOMERS' ADVANCES 7,447 7,813 7,941
EMPLOYEE RELATED LIABILITES 87,149 97,198 97,927
DEFERRED TAX LIABILITY 25,782 19,375 20,428
OTHER LONG-TERM LIABILITIES 23,721 25,882 24,352
Total liabilities 756,138 740,201 682,518
SHAREHOLDERS' EQUITY 151,726 157,067 174,703
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 907,864 $ 897,268 $ 857,221
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except share data and per share data)
Three months ended
June 30, March 31, June 30,
2012 2012 2011
GAAP GAAP GAAP
REVENUES $ 168,637 $ 168,013 $ 139,707
COST OF REVENUES 140,299 145,265 119,333
GROSS PROFIT 28,338 22,748 20,374
OPERATING COSTS AND EXPENSES
Research and development 7,582 8,000 5,457
Marketing, general and administrative 9,695 12,500 10,948
Acquisition related and reorganization costs 5,789 -- 1,493
23,066 20,500 17,898
OPERATING PROFIT 5,272 2,248 2,476
FINANCING EXPENSE, NET (8,709) (18,529) (10,499)
GAIN FROM ACQUISITON -- -- 19,467
OTHER EXPENSE, NET (1,019) -- (319)
PROFIT (LOSS) BEFORE INCOME TAX (4,456) (16,281) 11,125
INCOME TAX EXPENSE (4,948) (3,036) (9,382)
NET PROFIT (LOSS) FOR THE PERIOD $(9,404) $ (19,317) $ 1,743
BASIC EARNINGS (LOSS) PER ORDINARY SHARE(*)
basic earnings (loss) per ordinary share $ (0.44) $ (0.91) $ 0.09
Weighted average number of ordinary
shares outstanding - in thousands 21,473 21,240 19,730
(*) Share amounts reflect the one-to-fifteen reverse stock split effected on
August 5, 2012 .
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(dollars in thousands, except share data and per share data)
Three months Three months Three months
ended ended ended
June 30, June 30, June 30,
2012 2011 2012 2011 2012 2011
Adjustments (see a, b,
non-GAAP c, d, e, f, g below) GAAP
REVENUES $ 168,637 $ 139,707 $ -- $ -- $ 168,637 $ 139,707
COST OF REVENUES 100,679 89,059 39,620(a) 30,274(a) 140,299 119,333
GROSS PROFIT 67,958 50,648 (39,620) (30,274) 28,338 20,374
OPERATING COSTS AND EXPENSES
Research and development 6,966 4,993 616(b) 464(b) 7,582 5,457
Marketing, general and
administrative 8,246 9,022 1,449(c) 1,926(c) 9,695 10,948
Acquisition related and
reorganization costs -- -- 5,789(d) 1,493(d) 5,789 1,493
15,212 14,015 7,854 3,883 23,066 17,898
OPERATING PROFIT 52,746 36,633 (47,474) (34,157) 5,272 2,476
FINANCING EXPENSE, NET (6,925) (7,459) (1,784)(e)(3,040)(e) (8,709) (10,499)
GAIN FROM ACQUISITON -- -- -- 19,467(d) -- 19,467
OTHER EXPENSE, NET (1,019) (319) -- -- (1,019) (319)
PROFIT (LOSS) BEFORE
INCOME TAX 44,802 28,855 (49,258) (17,730) (4,456) 11,125
INCOME TAX EXPENSE (35) (809) (4,913)(f)(8,573)(f) (4,948) (9,382)
NET PROFIT (LOSS) FOR
THE PERIOD $ 44,767 $ 28,046 $(54,171) $(26,303) $ (9,404) $ 1,743
BASIC EARNINGS PER
ORDINARY SHARE(*) $ 2.08 $ 1.42
NON-GAAP GROSS MARGINS 40% 36%
NON-GAAP OPERATING MARGINS 31% 26%
NON-GAAP NET MARGINS 27% 20%
(a) Includes depreciation and amortization expenses in the amounts of $39,360 and
$29,946 and stock based compensation expenses in the amounts of $260 and $328 for
the three months ended June 30, 2012 and 2011, respectively.
(b) Includes depreciation and amortization expenses in the amounts of $419 and $203
and stock based compensation expenses in the amounts of $197 and $261 for the
three months ended June 30, 2012 and 2011, respectively.
(c) Includes depreciation and amortization expenses in the amounts of $304 and $350
and stock based compensation expenses in the amounts of $1,145 and $1,576 for the
three months ended June 30, 2012 and 2011, respectively.
(d) Includes acquisition costs, reorganization costs and gain from acquisition.
(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.
(g) Fully diluted earnings per shares according to non-GAAP results would be $0.91 and
$0.59 for the three months ended June 30, 2012 and June 30, 2011 , respectively,
and the weighted average number of shares outstanding would be 49,162 thousands
and 47,701 thousands for these periods.
(*) Share amounts reflect the one-to-fifteen reverse stock split effected on
August 5, 2012 .
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(dollars in thousands, except share data and per share data)
Three months Three months Three months
ended ended ended
June 30, March 31, June 30, March 31, June 30, March 31,
2012 2012 2012 2012 2012 2012
Adjustments (see a, b,
non-GAAP c, d, e, f, g below) GAAP
REVENUES $ 168,637 $ 168,013 $ -- $ -- $ 168,637 $ 168,013
COST OF REVENUES 100,679 109,259 39,620(a) 36,006(a) 140,299 145,265
GROSS PROFIT 67,958 58,754 (39,620) (36,006) 28,338 22,748
OPERATING COSTS AND EXPENSES
Research and development 6,966 7,392 616(b) 608(b) 7,582 8,000
Marketing, general
and administrative 8,246 11,095 1,449(c) 1,405(c) 9,695 12,500
Reorganization costs -- -- 5,789(d) -- 5,789 --
15,212 18,487 7,854 2,013 23,066 20,500
OPERATING PROFIT 52,746 40,267 (47,474) (38,019) 5,272 2,248
FINANCING EXPENSE, NET (6,925) (8,163) (1,784)(e)(10,366)(e) (8,709) (18,529)
OTHER EXPENSE, NET (1,019) -- -- -- (1,019) --
PROFIT (LOSS)
BEFORE INCOME TAX 44,802 32,104 (49,258) (48,385) (4,456) (16,281)
INCOME TAX EXPENSE (35) 1,120 (4,913)(f) (4,156)(f) (4,948) (3,036)
NET PROFIT (LOSS)
FOR THE PERIOD $ 44,767 $ 33,224 $ (54,171) $ (52,541) $ (9,404) $ (19,317)
BASIC EARNINGS PER
ORDINARY SHARE(*) $ 2.08 $ 1.56
NON-GAAP GROSS MARGINS 40% 35%
NON-GAAP OPERATING MARGINS 31% 24%
NON-GAAP NET MARGINS 27% 20%
(a) Includes depreciation and amortization expenses in the amounts of $39,360 and
$35,747 and stock based compensation expenses in the amounts of $260 and $259 for
the three months ended June 30, 2012 and March 31, 2012 , respectively.
(b) Includes depreciation and amortization expenses in the amounts of $419 and $395
and stock based compensation expenses in the amounts of $197 and $213 for the
three months ended June 30, 2012 and March 31, 2012 , respectively.
(c) Includes depreciation and amortization expenses in the amounts of $304 and $321
and stock based compensation expenses in the amounts of $1,145 and $1,084 for the
three months ended June 30, 2012 and March 31, 2012 , respectively.
(d) Includes reorganization costs.
(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.
(g) Fully diluted earnings per shares according to non-GAAP results would be $0.91
and $0.68 for the three months ended June 30, 2012 and March 31, 2012 ,
respectively, and the weighted average number of shares outstanding would be
49,162 thousands and 48,787 thousands for these periods.
(*) Share amounts reflect the one-to-fifteen reverse stock split effected on
August 5, 2012 .
Contacts
TowerJazz Investor Relations
Noit Levi, +972-4-604-7066
noitle@towersemi.com
CCG Investor Relations
towersemi@ccgisrael.com
SOURCE TowerJazz