TowerJazz Reports Increase in Revenue, EBITDA and Net Profit for the First Quarter of 2016
MIGDAL HAEMEK,
2016 First Quarter Financial Highlights
- Record revenues of
$278 million , representing 23% year over year growth and 9% quarter over quarter growth; - Net profit of
$66 million , including net gain from acquisition of theSan Antonio facility of$41 million ;- Excluding such gain, net profit is
$25 million , as compared with$22 million in the previous quarter, representing 12% quarter over quarter growth;
- Excluding such gain, net profit is
- Record EBITDA of
$78 million , up 51% year-over-year; - Cash from operations of
$77 million with free cash flow of$20 million , including$15 million of customer prepayments used for capacity expansion; - Cash and short-term deposits balance of
$245 million as ofMarch 31, 2016 , compared to$206 million as ofDecember 31, 2015 ; - Completed San Antonito fab acquisition from Maxim in
February 2016 ; - Strong second quarter revenue guidance with mid-range of
$300 million , representing 27% year over year and 8% quarter over quarter growth.
2016 First Quarter Results Overview
Revenues for the 2016 first quarter were a record
Gross profit for the first quarter of 2016 was
Net profit for the first quarter of 2016 was
The
The Company also provides financial information in this release, which it refers to as “adjusted financial measures” and is described and reconciled in the tables below, such as adjusted net profit for the first quarter of 2016 which was
Cash and short-term deposits balance as of
Shareholders' equity as of
Business Outlook
TowerJazz expects revenues for the second quarter of 2016 ending
CEO Comments
Mr.
Ellwanger concluded, “Based upon customers’ demand, organic capacity increases and strong assurance of revenue growth within our Japanese factories, we expect significant performance in 2016, top and bottom lines.”
Debt Refinancing
During 2015, the Company reduced its net debt from
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 (
The Company presents its financial statements in accordance with U.S. GAAP. Some of the financial information in this release, including in the financial tables below, which we refer to in this release as “adjusted financial measures” are non-GAAP financial measures as defined in Regulation G and related reporting requirements promulgated by the
About TowerJazz
To provide multi-fab sourcing and extended capacity for its customers, TowerJazz operates two manufacturing facilities in
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) demand in our customers’ end markets; (ii) over demand for our foundry services and/or products that exceeds our capacity; (iii) maintaining existing customers and attracting additional customers, (iv) high utilization and its effect on cycle time, yield and on schedule delivery which may cause customers to transfer their product(s) to other fabs, (v) operating results fluctuate from quarter to quarter making it difficult to predict future performance, (vi) impact of our debt and other liabilities on our financial position and operations, (vii) our ability to successfully execute acquisitions, integrate them into our business, utilize our expanded capacity and find new business, (viii) fluctuations in cash flow, (ix) our ability to satisfy the covenants stipulated in our agreements with our lenders, banks and bond holders, (x) pending litigation, including the shareholder class actions that were filed against the Company, certain officers, its directors and/or its external auditor in the US and
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 and 6-K, as were filed with the
(Financial tables follow)
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||||||||||
(dollars in thousands) | |||||||||||||||
March 31, | December 31, | March 31, | |||||||||||||
2016 | 2015 | 2015 | |||||||||||||
A S S E T S | |||||||||||||||
CURRENT ASSETS | |||||||||||||||
Cash and short term deposits | $ | 244,577 | $ | 205,575 | $ | 134,216 | |||||||||
Trade accounts receivable | 122,918 | 110,065 | 105,491 | ||||||||||||
Other receivables | 9,363 | 7,376 | 7,408 | ||||||||||||
Inventories | 128,031 | 105,681 | 86,153 | ||||||||||||
Other current assets | 16,666 | 18,030 | 20,314 | ||||||||||||
Total current assets | 521,555 | 446,727 | 353,582 | ||||||||||||
LONG-TERM INVESTMENTS | 11,816 | 11,737 | 11,785 | ||||||||||||
PROPERTY AND EQUIPMENT, NET | 582,250 | 459,533 | 408,513 | ||||||||||||
INTANGIBLE ASSETS, NET | 35,601 | 34,468 | 41,225 | ||||||||||||
GOODWILL | 7,000 | 7,000 | 7,000 | ||||||||||||
OTHER ASSETS, NET | 5,688 | 6,759 | 6,391 | ||||||||||||
TOTAL ASSETS | $ | 1,163,910 | $ | 966,224 | $ | 828,496 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
CURRENT LIABILITIES | |||||||||||||||
Short term debt and current maturities of loans and debentures | $ | 49,150 | $ | 33,259 | $ | 26,721 | |||||||||
Trade accounts payable | 104,617 | 91,773 | 108,616 | ||||||||||||
Deferred revenue and customers' advances | 31,061 | 23,373 | 8,112 | ||||||||||||
Other current liabilities | 73,929 | 62,714 | 59,102 | ||||||||||||
Total current liabilities | 258,757 | 211,119 | 202,551 | ||||||||||||
LONG-TERM DEBT | 260,201 | 256,875 | 225,841 | ||||||||||||
LONG-TERM CUSTOMERS' ADVANCES | 28,444 | 21,102 | 6,181 | ||||||||||||
EMPLOYEE RELATED LIABILITIES | 14,387 | 14,189 | 15,973 | ||||||||||||
DEFERRED TAX LIABILITY | 95,638 | 69,744 | 75,854 | ||||||||||||
OTHER LONG-TERM LIABILITIES | 2,116 | 7,609 | 10,057 | ||||||||||||
Total liabilities | 659,543 | 580,638 | 536,457 | ||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 504,367 | 385,586 | 292,039 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,163,910 | $ | 966,224 | $ | 828,496 | |||||||||
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES |
|||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||
(dollars and share count in thousands, except per share data) | |||||||||||||||||
Three months ended | |||||||||||||||||
March 31, | December 31, | March 31, | |||||||||||||||
2016 | 2015 | 2015 | |||||||||||||||
REVENUES | $ | 278,043 | $ | 254,602 | $ | 226,217 | |||||||||||
COST OF REVENUES | 216,696 | 190,072 | 193,225 | ||||||||||||||
GROSS PROFIT | 61,347 | 64,530 | 32,992 | ||||||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||||
Research and development | 15,237 | 15,704 | 14,837 | ||||||||||||||
Marketing, general and administrative | 15,923 | 15,478 | 16,161 | ||||||||||||||
Nishiwaki Fab restructuring costs and impairment, net | (627 | ) | (991 | ) | -- | ||||||||||||
30,533 | 30,191 | 30,998 | |||||||||||||||
OPERATING PROFIT | 30,814 | 34,339 | 1,994 | ||||||||||||||
INTEREST EXPENSE, NET | (3,358 | ) | (2,366 | ) | (3,633 | ) | |||||||||||
OTHER NON CASH FINANCING EXPENSE, NET (*) | (3,969 | ) | (12,751 | ) | (84,596 | ) | |||||||||||
GAIN FROM ACQUISITION, NET | 41,140 | -- | -- | ||||||||||||||
OTHER INCOME (EXPENSE), NET | -- | 70 | (9 | ) | |||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 64,627 | 19,292 | (86,244 | ) | |||||||||||||
INCOME TAX BENEFIT (EXPENSE) | (79 | ) | 4,779 | 10,894 | |||||||||||||
PROFIT (LOSS) BEFORE NON CONTROLLING INTEREST | 64,548 | 24,071 | (75,350 | ) | |||||||||||||
NON CONTROLLING INTEREST | 1,396 | (1,992 | ) | 2,286 | |||||||||||||
NET PROFIT (LOSS) | $ | 65,944 | $ | 22,079 | $ | (73,064 | ) | ||||||||||
BASIC EARNINGS (LOSS) PER ORDINARY SHARE | $ | 0.78 | $ | 0.28 | $ | (1.15 | ) | ||||||||||
Weighted average number of ordinary | |||||||||||||||||
shares outstanding | 84,521 | 79,607 | 63,581 | ||||||||||||||
DILUTED EARNINGS PER ORDINARY SHARE | $ | 0.69 | $ | 0.25 | |||||||||||||
Net profit used for diluted earnings per share | $ | 68,002 | $ | 22,079 | |||||||||||||
Weighted average number of ordinary shares outstanding | |||||||||||||||||
used for diluted earnings per share | 98,777 | 88,970 | |||||||||||||||
(*) | Includes $6,998 and $73,121 non cash financing expenses associated with Bonds Series F accelerated conversion in the three months ended December 31, 2015 and March 31, 2015, respectively |
||||||||||||||||
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||||||||||||
UNAUDITED RECONCILIATION OF ADJUSTED FINANCIAL DATA AND ADJUSTED EBITDA CALCULATION | ||||||||||||||||||||||
(dollars and share count in thousands, except per share data) | ||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||||||
2016 | 2015 | 2015 | ||||||||||||||||||||
RECONCILIATION FROM GAAP NET PROFIT TO ADJUSTED NET PROFIT | ||||||||||||||||||||||
GAAP NET PROFIT (LOSS) | $ | 65,944 | $ | 22,079 | $ | (73,064 | ) | |||||||||||||||
Stock based compensation | 2,156 | 1,975 | 1,310 | |||||||||||||||||||
Amortization of acquired intangible assets | 2,241 | 2,374 | 2,082 | |||||||||||||||||||
Other non-cash financing expense, net associated with Bonds Series F accelerated conversion | -- | 6,998 | 73,121 | |||||||||||||||||||
Gain from acquisition, net | (41,140 | ) | -- | -- | ||||||||||||||||||
Other non-recurring items, see (1) below | 2,378 | (7,380 | ) | (11,000 | ) | |||||||||||||||||
ADJUSTED NET PROFIT (LOSS) | $ | 31,579 | $ | 26,046 | $ | (7,551 | ) | |||||||||||||||
ADJUSTED NET PROFIT (LOSS) PER SHARE | ||||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.33 | $ | (0.12 | ) | |||||||||||||||
Diluted | $ | 0.34 | $ | 0.29 | $ | (0.03 | ) | |||||||||||||||
Fully diluted, see (2) below | $ | 0.31 | $ | 0.27 | $ | (0.03 | ) | |||||||||||||||
Number of shares and other securities used for the above calculation: | ||||||||||||||||||||||
Basic | 84,521 | 79,607 | 63,581 | |||||||||||||||||||
Diluted | 92,902 | 91,086 | 96,173 | |||||||||||||||||||
Fully diluted, see (2) below | 106,865 | 103,477 | 104,511 | |||||||||||||||||||
EBITDA CALCULATION: | ||||||||||||||||||||||
GAAP OPERATING PROFIT | $ | 30,814 | $ | 34,339 | $ | 1,994 | ||||||||||||||||
Depreciation of fixed assets | 40,064 | 37,841 | 45,950 | |||||||||||||||||||
Stock based compensation | 2,156 | 1,975 | 1,310 | |||||||||||||||||||
Amortization of acquired intangible assets | 2,241 | 2,374 | 2,082 | |||||||||||||||||||
Other non-recurring items, see (3) below | 2,378 | (991 | ) | -- | ||||||||||||||||||
EBITDA | $ | 77,653 | $ | 75,538 | $ | 51,336 | ||||||||||||||||
(1 | ) | Q1 2016 includes mainly acquisition related costs; Q4 2015 includes mainly impact of Japanese income tax rate reduction; Q1 2015 includes Jazz income tax benefit resulting from expiration of statute of limitations. | ||||||||||||||||||||
(2 | ) | Fully diluted share count includes all issued and outstanding securities as of end of the applicable period. | ||||||||||||||||||||
(3 | ) | Q1 2016 includes mainly acquisition related costs; Q4 2015 includes mainly Nishiwaki Fab cessation impact, net. |
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED SOURCES AND USES REPORT (UNAUDITED) | |||||||||||||
(dollars in thousands) | |||||||||||||
Three months | Three months | Three months | |||||||||||
ended | ended | ended | |||||||||||
March 31, | December 31, | March 31, | |||||||||||
2016 | 2015 | 2015 | |||||||||||
Cash and short term deposits at beginning of the period | $ | 205,575 | $ | 155,348 | $ | 187,167 | |||||||
Cash from operations | 77,442 | 53,180 | 40,290 | ||||||||||
Investments in property and equipment, net | (57,533 | ) | (58,291 | ) | (27,944 | ) | |||||||
Exercise of warrants and options, net | 5,881 | 4,168 | 6,471 | ||||||||||
Loans received | 17,000 | 70,592 | -- | ||||||||||
Debt repayment - principal | (10,254 | ) | (18,006 | ) | (46,683 | ) | |||||||
Nishiwaki's employees retirement related payments | -- | -- | (24,907 | ) | |||||||||
Effect of foreign exchange rate change | 9,029 | 154 | (178 | ) | |||||||||
TPSCo dividend to Panasonic | (2,563 | ) | (1,570 | ) | -- | ||||||||
Cash and short term deposits at end of the period | $ | 244,577 | $ | 205,575 | $ | 134,216 | |||||||
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||
Three months ended | ||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||
2016 | 2015 | 2015 | ||||||||||||||||
CASH FLOWS - OPERATING ACTIVITIES | ||||||||||||||||||
Net profit (loss) for the period |
$ | 64,548 | $ | 24,071 | $ | (75,350 | ) | |||||||||||
Adjustments to reconcile net profit (loss) for the period |
||||||||||||||||||
to net cash provided by operating activities: |
||||||||||||||||||
Income and expense items not involving cash flows: |
||||||||||||||||||
Depreciation and amortization |
48,544 | 43,663 | 47,968 | |||||||||||||||
Financing expense associated with debentures series F |
38 | 7,998 | 75,334 | |||||||||||||||
Effect of indexation, translation and fair value measurement on debt |
1,401 | 3,804 | 7,809 | |||||||||||||||
Other expense (income), net |
-- | (70 | ) | 9 | ||||||||||||||
Gain from acquisition, net |
(41,140 | ) | -- | -- | ||||||||||||||
Changes in assets and liabilities: |
||||||||||||||||||
Trade accounts receivable |
(8,519 | ) | 11,795 | (6,327 | ) | |||||||||||||
Other receivables and other current assets |
822 | (4,463 | ) | (7,154 | ) | |||||||||||||
Inventories |
(9,224 | ) | (1,302 | ) | 1,643 | |||||||||||||
Trade accounts payable |
10,145 | (18,979 | ) | (1,591 | ) | |||||||||||||
Deferred revenue and customers' advances |
15,030 | 8,613 | 2,704 | |||||||||||||||
Other current liabilities |
(1,953 | ) | (16,413 | ) | 8,022 | |||||||||||||
Deferred tax liability, net |
(2,173 | ) | (4,612 | ) | 551 | |||||||||||||
Other long-term liabilities |
(77 | ) | (925 | ) | (13,328 | ) | ||||||||||||
Nishiwaki's employees termination payments |
-- | -- | (24,907 | ) | ||||||||||||||
Net cash provided by operating activities |
77,442 | 53,180 | 15,383 | |||||||||||||||
CASH FLOWS - INVESTING ACTIVITIES | ||||||||||||||||||
Investments in property and equipment, net |
(57,533 | ) | (58,291 | ) | (27,944 | ) | ||||||||||||
Decrease (increase) in deposits |
10,000 | (30,000 | ) | -- | ||||||||||||||
Net cash used in investing activities |
(47,533 | ) | (88,291 | ) | (27,944 | ) | ||||||||||||
CASH FLOWS - FINANCING ACTIVITIES | ||||||||||||||||||
Proceeds on account of shareholders' equity , net |
5,881 | 4,168 | 6,471 | |||||||||||||||
Proceeds from loans |
17,000 | 70,592 | -- | |||||||||||||||
Debt repayment | (10,254 | ) | (18,006 | ) | (46,683 | ) | ||||||||||||
Dividend payment to Panasonic | (2,563 | ) | (1,570 | ) | -- | |||||||||||||
Net cash provided by (used in) financing activities |
10,064 | 55,184 | (40,212 | ) | ||||||||||||||
Effect of foreign exchange rate change |
9,029 | 154 | (178 | ) | ||||||||||||||
INCREASE (DECREASE) IN CASH | 49,002 | 20,227 | (52,951 | ) | ||||||||||||||
CASH - BEGINNING OF PERIOD | 175,575 | 155,348 | 187,167 | |||||||||||||||
CASH - END OF PERIOD | 224,577 | 175,575 | 134,216 | |||||||||||||||
Short term deposits |
20,000 | 30,000 | -- | |||||||||||||||
CASH AND SHORT TERM DEPOSITS - END OF PERIOD | $ | 244,577 | $ | 205,575 | $ | 134,216 | ||||||||||||
CONTACTS: Noit Levi | TowerJazz | +972 4 604 7066 | Noit.levi@towerjazz.comGavriel Frohwein | GK Investor Relations | (646) 688 3559 | towerjazz@gkir.com