TowerJazz Reports Fourth Quarter and Full Year 2013 Results
--- Signed joint venture definitive agreement with
--- Margins improve and design wins continue to accelerate ---
MIGDAL HAEMEK,
Financial Results Overview
Revenues for the 2013 fourth quarter of
On an adjusted non-GAAP basis, net income for the quarter was
On an adjusted non-GAAP basis, gross profit for the fourth quarter of
2013 was
EBITDA for the fourth quarter was
Net loss on a GAAP basis for the quarter was
For the full year of 2013, revenues were
On an adjusted Non-GAAP basis, net income for the full year was
During 2013, the company generated positive cash flow from operations of
approximately
Cash and deposits at
During the fourth quarter, the company signed a definitive agreement to
extend its credit line with
Business Outlook
TowerJazz expects revenues for its 2014 first quarter ending
Major Business Announcement
On
Management and Board Remarks
"In 2013 we achieved sequential quarterly revenue growth and in the
fourth quarter realized a year over year 25 percent organic growth. Over
16,000 new masks entered our factories in 2013, representing year over
year increase of 25 percent, giving a base of confidence for 2014 strong
customer forecasts. In view of our organic growth and the
"The recent Indian government announcement regarding Cabinet approval of
our consortium activities in
Teleconference and Webcast
TowerJazz will host an investor conference call today,
This call will be webcast and can be accessed via TowerJazz’s website at www.towerjazz.com,
or by calling: 1-888-407-2553 (U.S. Toll-Free), 03-918-0610 (
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
About TowerJazz
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 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,
F-3, F-4, S-8 and 6-K, as were filed with the
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(dollars in thousands) | ||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||
2013 | 2013 | 2012 | ||||||||||||
(Unaudited) | ||||||||||||||
ASSETS |
||||||||||||||
CURRENT ASSETS | ||||||||||||||
Cash, short-term deposits and designated deposits |
|
$ |
122,871 |
|
$ |
141,447 |
|
$ |
133,398 |
|||||
Trade accounts receivable | 80,316 | 71,664 | 79,354 | |||||||||||
Other receivables | 10,943 | 11,724 | 5,379 | |||||||||||
Inventories | 64,804 | 70,364 | 65,570 | |||||||||||
Other current assets | 11,480 | 15,815 | 14,405 | |||||||||||
Total current assets | 290,414 | 311,014 | 298,106 | |||||||||||
LONG-TERM INVESTMENTS | 14,494 | 13,529 | 12,963 | |||||||||||
PROPERTY AND EQUIPMENT, NET | 350,039 | 369,628 | 434,468 | |||||||||||
INTANGIBLE ASSETS, NET | 32,393 | 36,066 | 47,936 | |||||||||||
GOODWILL | 7,000 | 7,000 | 7,000 | |||||||||||
OTHER ASSETS, NET | 11,547 | 11,922 | 13,768 | |||||||||||
TOTAL ASSETS |
|
$ |
705,887 |
|
$ |
749,159 |
|
$ |
814,241 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
CURRENT LIABILITIES | ||||||||||||||
Short term debt |
|
$ |
36,441 |
|
$ |
45,460 |
|
$ |
49,923 |
|||||
Trade accounts payable | 66,358 | 63,383 | 81,372 | |||||||||||
Deferred revenue | 3,166 | 2,218 | 1,784 | |||||||||||
Other current liabilities | 33,951 | 39,893 | 36,240 | |||||||||||
Total current liabilities | 139,916 | 150,954 | 169,319 | |||||||||||
LONG-TERM DEBT | 316,885 | 305,929 | 288,954 | |||||||||||
LONG-TERM CUSTOMERS' ADVANCES | 7,187 | 7,209 | 7,407 | |||||||||||
EMPLOYEE RELATED LIABILITIES |
65,337 | 76,013 | 77,963 | |||||||||||
DEFERRED TAX LIABILITY | 13,611 | 15,145 | 26,405 | |||||||||||
OTHER LONG-TERM LIABILITIES | 21,703 | 22,314 | 24,168 | |||||||||||
Total liabilities | 564,639 | 577,564 | 594,216 | |||||||||||
SHAREHOLDERS' EQUITY | 141,248 | 171,595 | 220,025 | |||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
705,887 |
|
$ |
749,159 |
|
$ |
814,241 |
|||||
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 | ||||||||||||||||||||||||||||||||
December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | |||||||||||||||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||||||||||||||
non-GAAP | Adjustments (see a, b, c, d, e, f below) | GAAP | ||||||||||||||||||||||||||||||||
REVENUES |
|
$ |
134,571 |
|
$ |
132,555 |
|
$ |
-- |
|
$ |
-- |
|
$ |
134,571 |
|
$ |
132,555 |
||||||||||||||||
COST OF REVENUES | 88,635 | 93,069 | 36,995 | (a) | 35,115 | (a) | 125,630 | 128,184 | ||||||||||||||||||||||||||
GROSS PROFIT | 45,936 | 39,486 | (36,995 | ) | (35,115 | ) | 8,941 | 4,371 | ||||||||||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||||||||||
Research and development | 7,801 | 8,139 | 188 | (b) | 45 | (b) | 7,989 | 8,184 | ||||||||||||||||||||||||||
Marketing, general and administrative | 10,368 | 10,241 | 556 | (c) | 764 | (c) | 10,924 | 11,005 | ||||||||||||||||||||||||||
Amortization related to a lease agreement early termination | -- | -- | 1,866 | (d) | 1,866 | (d) | 1,866 | 1,866 | ||||||||||||||||||||||||||
18,169 | 18,380 | 2,610 | 2,675 | 20,779 | 21,055 | |||||||||||||||||||||||||||||
OPERATING PROFIT (LOSS) | 27,767 | 21,106 | (39,605 | ) | (37,790 | ) | (11,838 | ) | (16,684 | ) | ||||||||||||||||||||||||
INTEREST EXPENSES, NET | (8,223 | ) | (8,416 | ) | -- | (e) | -- | (e) | (8,223 | ) | (8,416 | ) | ||||||||||||||||||||||
OTHER FINANCING EXPENSE, NET | -- | -- | (11,109 | ) | (e) | (9,502 | ) | (e) | (11,109 | ) | (9,502 | ) | ||||||||||||||||||||||
OTHER EXPENSE, NET | (380 | ) | (465 | ) | -- | -- | (380 | ) | (465 | ) | ||||||||||||||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 19,164 | 12,225 | (50,714 | ) | (47,292 | ) | (31,550 | ) | (35,067 | ) | ||||||||||||||||||||||||
INCOME TAX BENEFIT | -- | -- | 1,704 | (f) | 3,291 | (f) | 1,704 | 3,291 | ||||||||||||||||||||||||||
NET PROFIT (LOSS) FOR THE PERIOD |
|
$ |
19,164 |
|
$ |
12,225 |
|
$ |
(49,010 |
) |
|
$ |
(44,001 |
) |
|
$ |
(29,846 |
) |
|
$ |
(31,776 |
) |
||||||||||||
Loss per ordinary share* |
$ |
0.62 |
$ |
0.68 |
||||||||||||||||||||||||||||||
(a) | Includes depreciation and amortization expenses in the amounts of $36,747 and $35,000 and stock based compensation expenses in the amounts of $248 and $115 for the three months ended December 31, 2013 and September 30, 2013 respectively. | |
(b) | Includes depreciation and amortization expenses in the amounts of $(49) and $(62) and stock based compensation expenses in the amounts of $237 and $107 for the three months ended December 31, 2013 and September 30, 2013 respectively. | |
(c) | Includes depreciation and amortization expenses in the amounts of $205 and $206 and stock based compensation expenses in the amounts of $351 and $558 for the three months ended December 31, 2013 and September 30, 2013 respectively. | |
(d) | Non cash amortization related to an early termination of an office building lease contract. | |
(e) |
Non-GAAP interest expenses and other financing expenses, 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 $0.40 and $0.26 for the three months ended December 31, 2013 and September 30, 2013, respectively and the weighted average number of ordinary shares outstanding is 47.9 million and 46.6 million for these periods. | |
Fully diluted earnings per share according to non-GAAP results would be $0.34 and $0.22 for the three months ended December 31, 2013 and September 30, 2013, respectively, and the weighted average number of shares outstanding would be 56.4 million and 55.6 million for these periods; fully diluted earnings results and quantities of number of shares outstanding exclude 23.2 million for the three months ended December 31, 2013 and September 30, 2013, of securities that carry exercise price or conversion ratios, which are above the average price of the company’s stock during these periods. | ||
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 |
||||||||||||||||||||||||||||||||
|
December 31, |
December 31, |
December 31, |
|||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||
non-GAAP | Adjustments (see a, b, c, d, e, f below) | GAAP | ||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
REVENUES |
|
$ |
134,571 |
|
$ |
147,587 |
|
$ |
-- |
|
$ |
-- |
|
$ |
134,571 |
|
$ |
147,587 |
||||||||||||||||
COST OF REVENUES | 88,635 | 98,279 | 36,995 | (a) | 40,738 | (a) | 125,630 | 139,017 | ||||||||||||||||||||||||||
GROSS PROFIT | 45,936 | 49,308 | (36,995 | ) | (40,738 | ) | 8,941 | 8,570 | ||||||||||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||||||||||
Research and development | 7,801 | 7,138 | 188 | (b) | 194 | (b) | 7,989 | 7,332 | ||||||||||||||||||||||||||
Marketing, general and administrative | 10,368 | 9,737 | 556 | (c) | 1,018 | (c) | 10,924 | 10,755 | ||||||||||||||||||||||||||
Amortization related to a lease agreement early termination | -- | -- | 1,866 | (d) | -- | 1,866 | -- | |||||||||||||||||||||||||||
18,169 | 16,875 | 2,610 | 1,212 | 20,779 | 18,087 | |||||||||||||||||||||||||||||
OPERATING PROFIT (LOSS) | 27,767 | 32,433 | (39,605 | ) | (41,950 | ) | (11,838 | ) | (9,517 | ) | ||||||||||||||||||||||||
INTEREST EXPENSES, NET | (8,223 | ) | (8,647 | ) | -- | (e) | -- | (e) | (8,223 | ) | (8,647 | ) | ||||||||||||||||||||||
OTHER FINANCING EXPENSE, NET | -- | -- | (11,109 | ) | (e) | (7,614 | ) | (e) | (11,109 | ) | (7,614 | ) | ||||||||||||||||||||||
OTHER INCOME (EXPENSE), NET | (380 | ) | 78 | -- | -- | (380 | ) | 78 | ||||||||||||||||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 19,164 | 23,864 | (50,714 | ) | (49,564 | ) | (31,550 | ) | (25,700 | ) | ||||||||||||||||||||||||
INCOME TAX BENEFIT (EXPENSE) | -- | (1,937 | ) | 1,704 | (f) | 4,248 | (f) | 1,704 | 2,311 | |||||||||||||||||||||||||
NET PROFIT (LOSS) FOR THE PERIOD |
|
$ |
19,164 |
|
$ |
21,927 |
|
$ |
(49,010 |
) |
|
$ |
(45,316 |
) |
|
$ |
(29,846 |
) |
|
$ |
(23,389 |
) |
||||||||||||
Loss per ordinary share* |
$ |
0.62 |
$ |
1.03 |
||||||||||||||||||||||||||||||
(a) | Includes depreciation and amortization expenses in the amounts of $36,747 and $40,539 and stock based compensation expenses in the amounts of $248 and $199 for the three months ended December 31, 2013 and December 31, 2012 respectively. | |
(b) | Includes depreciation and amortization expenses in the amounts of $(49) and $33 and stock based compensation expenses in the amounts of $237 and $161 for the three months ended December 31, 2013 and December 31, 2012 respectively. | |
(c) | Includes depreciation and amortization expenses in the amounts of $205 and $208 and stock based compensation expenses in the amounts of $351 and $810 for the three months ended December 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 interest expenses and other financing expenses, 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 $0.40 and $0.96 for the three months ended December 31, 2013 and December 31, 2012, respectively and the weighted average number of ordinary shares outstanding is 47.9 million and 22.8 million for these periods. | |
Fully diluted earnings per shares according to non-GAAP results would be $0.34 and $0.44 for the three months ended December 31, 2013 and December 31, 2012, respectively, and the weighted average number of shares outstanding would be 56.4 and 49.5 million for these periods; fully diluted earnings results and quantities of number of shares outstanding exclude 23.2 million and 22.7 million for the three months ended December 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 during these periods. | ||
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||||||||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||||||
December 31, |
December 31, |
December 31, |
||||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||||
non-GAAP | Adjustments (see a, b, c, d, e, f, g below) | GAAP | ||||||||||||||||||||||||||||||||
REVENUES |
|
$ |
505,009 |
|
$ |
638,831 |
|
$ |
-- |
|
$ |
-- |
|
$ |
505,009 |
|
$ |
638,831 |
||||||||||||||||
COST OF REVENUES | 341,855 | 405,398 | 135,045 | (a) | 154,648 | (a) | 476,900 | 560,046 | ||||||||||||||||||||||||||
GROSS PROFIT | 163,154 | 233,433 | (135,045 | ) | (154,648 | ) | 28,109 | 78,785 | ||||||||||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||||||||||
Research and development | 32,543 | 29,075 | 521 | (b) | 2,018 | (b) | 33,064 | 31,093 | ||||||||||||||||||||||||||
Marketing, general and administrative | 40,483 | 39,171 | 2,433 | (c) | 5,242 | (c) | 42,916 | 44,413 | ||||||||||||||||||||||||||
Reorganization costs | -- | -- | -- | 5,789 | (d) | -- | 5,789 | |||||||||||||||||||||||||||
Amortization related to a lease agreement early termination | -- | -- | 7,464 | (e) | -- | 7,464 | -- | |||||||||||||||||||||||||||
73,026 | 68,246 | 10,418 | 13,049 | 83,444 | 81,295 | |||||||||||||||||||||||||||||
OPERATING PROFIT (LOSS) | 90,128 | 165,187 | (145,463 | ) | (167,697 | ) | (55,335 | ) | (2,510 | ) | ||||||||||||||||||||||||
INTEREST EXPENSES, NET | (32,971 | ) | (31,808 | ) | -- | (f) | -- | (f) | (32,971 | ) | (31,808 | ) | ||||||||||||||||||||||
OTHER FINANCING EXPENSE, NET | -- | -- | (27,838 | ) | (f) | (27,583 | ) | (f) | (27,838 | ) | (27,583 | ) | ||||||||||||||||||||||
OTHER EXPENSE, NET | (904 | ) | (1,042 | ) | -- | -- | (904 | ) | (1,042 | ) | ||||||||||||||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 56,253 | 132,337 | (173,301 | ) | (195,280 | ) | (117,048 | ) | (62,943 | ) | ||||||||||||||||||||||||
INCOME TAX BENEFIT (EXPENSE) | (190 | ) | (852 | ) | 9,578 | (g) | (6,474 | ) | (g) | 9,388 | (7,326 | ) | ||||||||||||||||||||||
NET PROFIT (LOSS) FOR THE PERIOD |
|
$ |
56,063 |
|
$ |
131,485 |
|
$ |
(163,723 |
) |
|
$ |
(201,754 |
) |
|
$ |
(107,660 |
) |
|
$ |
(70,269 |
) |
||||||||||||
Loss per ordinary share* |
$ |
2.72 |
$ |
3.17 |
||||||||||||||||||||||||||||||
(a) | Includes depreciation and amortization expenses in the amounts of $134,448 and $153,746 and stock based compensation expenses in the amounts of $597 and $902 for the year ended December 31, 2013 and December 31, 2012, respectively. | |
(b) |
Includes depreciation and amortization expenses in the amounts of $(6) and $1,304 and stock based compensation expenses in the amounts of $527 and $714 for the year ended December 31, 2013 and December 31, 2012, respectively. |
|
(c) | Includes depreciation and amortization expenses in the amounts of $775 and $1,121 and stock based compensation expenses in the amounts of $1,658 and $4,121 for the year ended December 31, 2013 and December 31, 2012, respectively. | |
(d) | Includes reorganization costs. | |
(e) | Non cash amortization related to an early termination of an office building lease contract. | |
(f) |
Non-GAAP interest expenses and other financing expense, net include only interest on an accrual basis. |
|
(g) | Non-GAAP income tax expenses include taxes paid during the period. | |
(*) | Basic earnings per ordinary share according to non-GAAP results is $1.41 and $5.93 for the year ended December 31, 2013 and December 31, 2012, respectively and the weighted average number of ordinary shares outstanding is 39.6 million and 22.2 million for these periods. | |
Fully diluted earnings per shares according to non-GAAP results would be $1.06 and $2.65 for the year ended December 31, 2013 and December 31, 2012, respectively, and the weighted average number of shares outstanding would be 52.9 and 49.6 million for these periods; fully diluted earnings results and quantities of number of shares outstanding exclude 23.2 million and 7.4 million for the year ended December 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 during these periods. |
Source: TowerJazz
TowerJazz
Noit Levi, +972 4 604 7066
Noit.levi@towerjazz.com
or
GK
Investor Relations
Kenny Green, 646-201-9246
towerjazz@gkir.com