TowerJazz Presents Third Quarter 2012 Financial Results: Revenues of $155 Million; $491 Million Revenues in the First Nine Months of 2012, Growing 13% Versus $436 Million in the Same Period Last Year
MIGDAL HAEMEK,
TowerJazz, the global specialty foundry leader, today announced financial results for the third quarter ended
(Logo: http://photos.prnewswire.com/prnh/20120509/531192 )
Third Quarter 2012 Highlights
- Revenues of
$154.6 million for the third quarter of 2012 and of$491.2 million in the first nine months of 2012, a 13% increase over revenues of$436.4 million in the same period last year; - Non-GAAP gross and operating margins at 37% and 26% respectively as compared to 33% and 22% in the third quarter of 2011, respectively;
- Non-GAAP net profit of
$32 million and net margin of 20% as compared to$32 million and 18% net margin in the third quarter of 2011; - EBITDA of
$40 million , higher than the$39 million as of the third quarter of 2011 which excludes the one-time gain from the sale of HHNEC holdings; - End of quarter cash balance of
$161 million as compared to$101 million as ofDecember 31, 2011 ; - Completed a previously announced efficiency and cost reduction plan in the Japanese facility resulting in
$30 million of savings on an annual basis; - Engaged during the third quarter of 2012 with Vishay-Siliconix for high volume production commitment at the Company's fabs in
Israel andJapan through 2018.
CEO Perspective
"Our third quarter results came in line with our expectations and guidance," commented
Ellwanger further commented: "Additionally, we are in the final stages of signing a unique contract in
Third quarter 2012 results summary
Third quarter 2012 revenue reached
On a non-GAAP basis, as described and reconciled below, the third quarter 2012 gross profit was
Operating profit on a non-GAAP basis in the third quarter of 2012 was
The improvement in margins are as a result of the efficiency measures that management has executed, including the cost reduction plan in the Japanese facility, with the aim of lowering operating expenses by more than
On a GAAP basis, net loss in the third quarter of 2012 was
On a non-GAAP basis, net profit in the third quarter of 2012 was
EBITDA for the third quarter of 2012 was
Net cash from operating activities for the third quarter of 2012 amounted to
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 third quarter 2012 results today,
To participate, please call: 1-888-407-2553 (U.S. toll-free number) or +972-3-918-0644 (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, one time gain from acquisition and one time gain from the sale of HHNEC shares, 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)
September 30, June 30, December 31,
2012 2012 2011
(Unaudited) (Unaudited)
A S S E T S
CURRENT ASSETS
Cash and short-term deposits $ 160,973 $ 170,661 $ 101,149
Trade accounts receivable 85,605 91,928 75,350
Other receivables 2,710 6,783 5,000
Inventories 74,047 64,294 69,024
Other current assets 18,625 14,716 15,567
Total current assets 341,960 348,382 266,090
LONG-TERM INVESTMENTS 12,514 12,555 12,644
PROPERTY AND EQUIPMENT, NET 466,523 472,592 498,683
INTANGIBLE ASSETS, NET 51,293 52,620 58,737
GOODWILL 7,000 7,000 7,000
OTHER ASSETS, NET 14,132 14,715 14,067
TOTAL ASSETS $ 893,422 $ 907,864 $ 857,221
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short term debt $ 56,970 $ 41,619 $ 48,255
Trade accounts payable 90,187 96,743 111,620
Deferred revenue 3,323 4,835 5,731
Other current liabilities 62,427 66,608 64,654
Total current liabilities 212,907 209,805 230,260
LONG-TERM DEBT (*) 285,134 402,234 301,610
LONG-TERM CUSTOMERS' ADVANCES 7,415 7,447 7,941
EMPLOYEE RELATED LIABILITES 87,301 87,149 97,927
DEFERRED TAX LIABILITY 31,377 25,782 20,428
OTHER LONG-TERM LIABILITIES 21,745 23,721 24,352
Total liabilities 645,879 756,138 682,518
SHAREHOLDERS' EQUITY (*) 247,543 151,726 174,703
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 893,422 $ 907,864 $ 857,221
(*) In accordance with ASC 470-20 (formerly EITF 98-5 and EITF 00-27), a Beneficial
Conversion Feature (BCF) exists for bonds series F, which has been measured in
accordance with such standards at $110 thousands , classified as an
increase in shareholders' equity with a correspondence decrease in the carrying value
of the debentures presented as long term liabilities; said amount will be accreted
through the remaining life of the debentures to the non-cash financing expenses.
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except share data and per share data)
Three months ended
September 30,
2012 2011
GAAP GAAP
REVENUES $ 154,594 $ 176,112
COST OF REVENUES 135,465 159,780
GROSS PROFIT 19,129 16,332
OPERATING COSTS AND EXPENSES
Research and development 8,179 6,526
Marketing, general and administrative 11,463 14,425
19,642 20,951
OPERATING LOSS (513) (4,619)
INTEREST EXPENSES, NET (8,073) (7,299)
OTHER FINANCING INCOME (EXPENSE), NET (7,819) 8,673
OTHER INCOME (EXPENSE), NET (101) 14,020
PROFIT (LOSS) BEFORE INCOME TAX (16,506) 10,775
INCOME TAX EXPENSE (1,653) (8,936)
PROFIT (LOSS) FOR THE PERIOD $ (18,159) $ 1,839
BASIC EARNINGS (LOSS) PER ORDINARY SHARE (*)
basic earnings (loss) per ordinary share $ (0.84) $ 0.09
Weighted average number of ordinary
shares outstanding - in thousands 21,539 21,140
(*) Earning (Loss) per ordinary share includes the effect of the reverse stock
split of one-for-fifteen 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)
Nine months ended Nine months ended Nine months ended
September 30, September 30, September 30,
2012 2011 2012 2011 2012 2011
non-GAAP Adjustments (see a,
b, c, d, e, f, g
below)
REVENUES $ 491,244 $ 436,439 $ -- $ -- $ 491,244 $436,439
COST OF REVENUES 307,119 275,290 113,910(a) 93,898(a) 421,029 369,188
GROSS PROFIT 184,125 161,149 (113,910) (93,898) 70,215 67,251
OPERATING COSTS AND EXPENSES
Research and development 21,937 16,311 1,824(b) 1,296 (b) 23,761 17,607
Marketing, general and
administrative 29,434 29,172 4,224(c) 5,770 (c) 33,658 34,942
Acquisition related and
reorganization costs -- -- 5,789(d) 1,493 (d) 5,789 1,493
51,371 45,483 11,837 8,559 63,208 54,042
OPERATING PROFIT 132,754 115,666 (125,747) (102,457) 7,007 13,209
INTEREST EXPENSES, NET (23,161) (21,686) --(e) -- (e)(23,161) (21,686)
OTHER FINANCING EXPENSE, NET -- -- (19,969)(e) (6,653)(e)(19,969) (6,653)
GAIN FROM ACQUISITON -- -- -- 19,467 (d) -- 19,467
OTHER INCOME (EXPENSE), NET (1,120) (442) -- 14,058 (f) (1,120) 13,616
PROFIT (LOSS) BEFORE
INCOME TAX 108,473 93,538 (145,716) (75,585) (37,243) 17,953
INCOME TAX BENEFIT
(EXPENSE) 1,085 (3,416) (10,722)(g)(16,366)(g) (9,637) (19,782)
NET PROFIT (LOSS) FOR
THE PERIOD $ 109,558 $ 90,122 $(156,438) $(91,951) $(46,880) $(1,829)
BASIC EARNINGS
PER ORDINARY SHARE (*) $ 5.42 $ 4.56
NON-GAAP GROSS MARGINS 37% 37%
NON-GAAP OPERATING MARGINS 27% 27%
NON-GAAP NET MARGINS 22% 21%
(a) Includes depreciation and amortization expenses in the amounts of $113,207 and
$93,029 and stock based compensation expenses in the amounts of $703
and $869 for the nine months ended September 30, 2012 and 2011, respectively.
(b) Includes depreciation and amortization expenses in the amounts of $1,271 and
$648 and stock based compensation expenses in the amounts of $553 and
$648 for the nine months ended September 30, 2012 and 2011, respectively.
(c) Includes depreciation and amortization expenses in the amounts of $913 and
$1,072 and stock based compensation expenses in the amounts of $3,311 and
$4,698 for the nine months ended September 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) Includes gain from the sale of HHNEC shares.
(g) Non-GAAP income tax expenses include taxes paid during the period.
(*) Share amounts reflect the one-to-fifteen reverse stock split effected on August
5, 2012 .
Fully diluted earnings per shares according to non-GAAP results would be $1.77
and $1.89 for the nine months ended September 30, 2012 and September
30, 2011 , respectively, and the weighted average number of shares outstanding
would be 68,042 thousands and 48,049 thousands for these periods.
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 ended Three months ended Three months ended
September 30, September 30, September 30,
2012 2011 2012 2011 2012 2011
Adjustments (see a, b,
non-GAAP c, d, e, f below) GAAP
REVENUES $ 154,594 $ 176,112 $ -- $ -- $ 154,594 $ 176,112
COST OF REVENUES 97,181 118,658 38,284 (a) 41,122(a) 135,465 159,780
GROSS PROFIT 57,413 57,454 (38,284) (41,122) 19,129 16,332
OPERATING COSTS AND EXPENSES
Research and development 7,579 6,059 600 (b) 467 (b) 8,179 6,526
Marketing, general and
administrative 10,093 12,363 1,370 (c) 2,062 (c) 11,463 14,425
17,672 18,422 1,970 2,529 19,642 20,951
OPERATING PROFIT (LOSS) 39,741 39,032 (40,254) (43,651) (513) (4,619)
INTEREST EXPENSES, NET (8,073) (7,299) -- (d) -- (d) (8,073) (7,299)
OTHER FINANCING INCOME
(EXPENSE), NET -- -- (7,819)(d) 8,673 (d) (7,819) 8,673
OTHER INCOME (EXPENSE), NET (101) (38) -- 14,058 (e) (101) 14,020
PROFIT (LOSS) BEFORE
INCOME TAX 31,567 31,695 (48,073) (20,920) (16,506) 10,775
INCOME TAX EXPENSE -- -- (1,653)(f) (8,936)(f) (1,653) (8,936)
NET PROFIT (LOSS) FOR
THE PERIOD $ 31,567 $ 31,695 $(49,726) $(29,856) $ (18,159) $ 1,839
BASIC EARNINGS
PER ORDINARY SHARE (*) $ 1.47 $ 1.50
NON-GAAP GROSS MARGINS 37% 33%
NON-GAAP OPERATING MARGINS 26% 22%
NON-GAAP NET MARGINS 20% 18%
(a) Includes depreciation and amortization expenses in the amounts of $38,100 and $40,819
and stock based compensation expenses in the amounts of $184 and $303 for the three
months ended September 30, 2012 and 2011, respectively.
(b) Includes depreciation and amortization expenses in the amounts of $457 and $289 and
stock based compensation expenses in the amounts of $143 and $178 for the three
months ended September 30, 2012 and 2011, respectively.
(c) Includes depreciation and amortization expenses in the amounts of $288 and $369
and stock based compensation expenses in the amounts of $1,082 and $1,693 for the
three months ended September 30, 2012 and 2011, respectively.
(d) Non-GAAP financing expense, net includes only interest on an accrual basis.
(e) Includes gain from the sale of HHNEC shares
(f) Non-GAAP income tax expenses include taxes paid during the period.
(*) Share amounts reflect the one-to-fifteen reverse stock split effected on August
5, 2012 .
Fully diluted earnings per shares according to non-GAAP results would be $0.65 and
$0.65 for the three months ended September 30, 2012 and September 30, 2011 ,
respectively, and the weighted average number of shares outstanding would be
48,941 thousands and 48,730 thousands for these periods.
Contacts
TowerJazz Investor Relations
Noit Levi, +972-4-604-7066
noitle@towersemi.com
CCG Investor Relations
towersemi@ccgisrael.com
SOURCE TowerJazz