TowerJazz Reports Record Revenues for the Third Quarter of 2015 With Continued Increase in Net Profit and Margins
Year Over Year Organic Revenue Increase of 23%;
Provides Fourth Quarter Guidance of Continuous Growth, Surpassing
Highlights
- Third quarter 2015 record revenues of
$244 million with year over year organic growth of 23% and nine months year over year organic growth of 28%; - Substantial GAAP margins increase:
- Gross profit of
$55 million , 3.8X year over year - GAAP net profit of
$14 million , 74% quarter over quarter increase, and compared to a net loss in the third quarter of 2014;
- Gross profit of
- Third quarter non-GAAP profits increased by
$26 million year over year against$18 million revenue growth:- Record gross profit of
$94 million or 38% gross margin, up 8 points or a 38% increase from the gross profit of the third quarter of 2014 - Record EBITDA of
$63 million , 69% year over year increase - Net profit of
$58 million , representing 24% net margin and basic earnings per share of$0.74 ;
- Record gross profit of
- Engaged key customers for prepaid capacity reservation programs to receive
$45 million advance payment in order to meet customer increased demand for 2016 and beyond; - Strong balance sheet with:
- Record shareholders’ equity of
$325 million - Cash balance of
$155 million and - Net debt of
$134 million as compared to$348 million at the end of the third quarter of 2014 - 0.53X net debt to EBITDA ratio.
- Record shareholders’ equity of
Third Quarter and Nine Months Results Overview
Record revenues of
Gross profit, on a non-GAAP basis, for the third quarter of 2015 was
EBITDA, which is akin to non-GAAP operating profit, was
Net profit for the quarter, on a non-GAAP basis, was
GAAP net profit in the third quarter of 2015 was
Cash as of
Shareholders’ equity as of
Business Outlook
TowerJazz expects revenues for the fourth quarter ending
CEO Comments
Mr.
Ellwanger concluded: “The ongoing increase in midterm to long term indicators of record mask sets and design wins, built upon strong financials, and combined with key customers’ growth that is aligned with our capabilities and roadmap, provide us confidence in a very strong 2016 and beyond. We are on track and guiding fourth quarter of this year to achieve our previously announced milestone of breaking a
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 third 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
Since the initial listing of the Company on NASDAQ in
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) maintaining existing customers and attracting additional customers, (ii) demand in our customers’ end markets, (iii) 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, (iv) operating results fluctuate from quarter to quarter making it difficult to predict future performance, (v) impact of our debt and other liabilities on our financial position and operations, (vi) our ability to successfully execute acquisitions, integrate them into our business, utilize our expanded capacity and find new business, (vii) fluctuations in cash flow, (viii) our ability to satisfy the covenants stipulated in our agreements with our lenders, banks and bond holders, (ix) our majority stake in TPSCo, (x) in the course of the operations cessation, dissolution and closure of TJP within the scope of restructuring our activities and business in
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
(Financial tables follow)
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(dollars in thousands) | ||||||||||||
September 30, | June 30, | March 31, | December 31, | |||||||||
2015 | 2015 | 2015 | 2014 | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS | ||||||||||||
Cash and cash equivalents | $ | 155,348 | $ | 142,503 | $ | 134,216 | $ | 187,167 | ||||
Trade accounts receivable | 122,686 | 112,624 | 105,491 | 99,166 | ||||||||
Other receivables | 7,263 | 6,333 | 7,408 | 5,759 | ||||||||
Inventories | 104,396 | 91,855 | 86,153 | 87,873 | ||||||||
Other current assets | 23,731 | 18,796 | 20,314 | 14,119 | ||||||||
Total current assets | 413,424 | 372,111 | 353,582 | 394,084 | ||||||||
LONG-TERM INVESTMENTS | 12,050 | 12,437 | 11,785 | 11,896 | ||||||||
PROPERTY AND EQUIPMENT, NET | 430,477 | 415,092 | 408,513 | 419,111 | ||||||||
INTANGIBLE ASSETS, NET | 36,718 | 39,283 | 41,225 | 42,037 | ||||||||
GOODWILL | 7,000 | 7,000 | 7,000 | 7,000 | ||||||||
OTHER ASSETS, NET | 7,220 | 7,410 | 6,391 | 10,018 | ||||||||
TOTAL ASSETS | $ | 906,889 | $ | 853,333 | $ | 828,496 | $ | 884,146 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
CURRENT LIABILITIES | ||||||||||||
Current maturities of loans and debentures | $ | 49,224 | $ | 40,558 | $ | 26,721 | $ | 119,999 | ||||
Trade accounts payable | 111,917 | 106,677 | 108,616 | 98,632 | ||||||||
Deferred revenue and customers' advances | 14,752 | 11,540 | 8,112 | 5,478 | ||||||||
Other current liabilities | 76,765 | 72,715 | 59,102 | 76,216 | ||||||||
Total current liabilities | 252,658 | 231,490 | 202,551 | 300,325 | ||||||||
LONG-TERM DEBT | 206,801 | 214,357 | 225,841 | 267,087 | ||||||||
LONG-TERM CUSTOMERS' ADVANCES | 21,110 | 6,178 | 6,181 | 6,272 | ||||||||
EMPLOYEE RELATED LIABILITES | 15,786 | 16,571 | 15,973 | 16,699 | ||||||||
DEFERRED TAX LIABILITY | 76,197 | 74,551 | 75,854 | 75,278 | ||||||||
OTHER LONG-TERM LIABILITIES | 9,730 | 9,897 | 10,057 | 22,924 | ||||||||
Total liabilities | 582,282 | 553,044 | 536,457 | 688,585 | ||||||||
TOTAL SHAREHOLDERS' EQUITY | 324,607 | 300,289 | 292,039 | 195,561 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 906,889 | $ | 853,333 | $ | 828,496 | $ | 884,146 |
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED CASH REPORT (UNAUDITED) | |||||||||||||
(dollars in thousands) | |||||||||||||
Three months | Three months | Nine months | |||||||||||
ended | ended | ended | |||||||||||
September 30, | June 30, | September 30, | |||||||||||
2015 | 2015 | 2015 | |||||||||||
Cash at beginning of the period | $ | 142,503 | $ | 134,216 | $ | 187,167 | |||||||
Cash from operations, excluding interest payments | 54,689 | 54,143 | 152,805 | ||||||||||
Exercise of warrants and options, net | 4,602 | (817 | ) | 10,256 | |||||||||
Investments in property and equipment, net | (39,579 | ) | (39,830 | ) | (107,518 | ) | |||||||
Debt repayment - principal | (3,000 | ) | (2,000 | ) | (51,683 | ) | |||||||
Debt repayment - interest | (3,867 | ) | (3,209 | ) | (10,772 | ) | |||||||
Nishiwaki's cessation of operation, net | -- | -- | (24,907 | ) | |||||||||
Cash at end of the period | $ | 155,348 | $ | 142,503 | $ | 155,348 |
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
(dollars in thousands) | ||||||||
Three months ended | ||||||||
September 30, | June 30, | |||||||
2015 | 2015 | |||||||
CASH FLOWS - OPERATING ACTIVITIES | ||||||||
Net profit for the period | $ | 14,002 | $ | 8,150 | ||||
Adjustments to reconcile net profit to net cash provided by operating activities: | ||||||||
Income and expense items not involving cash flows: | ||||||||
Depreciation and amortization | 39,058 | 37,343 | ||||||
Financing expense associated with debentures series F | 2,696 | 1,945 | ||||||
Effect of indexation, translation and fair value measurement on debt | 918 | 3,547 | ||||||
Other expense, net | 247 | 4 | ||||||
Changes in assets and liabilities: | ||||||||
Trade accounts receivable | (7,325 | ) | (9,258 | ) | ||||
Other receivables and other current assets | (5,549 | ) | 2,188 | |||||
Inventories | (12,151 | ) | (6,098 | ) | ||||
Trade accounts payable | (508 | ) | (5,072 | ) | ||||
Deferred revenue and customers' advances | 18,144 | 3,264 | ||||||
Other current liabilities | 1,597 | 15,248 | ||||||
Deferred tax liability, net | 133 | (245 | ) | |||||
Other long-term liabilities | (440 | ) | (82 | ) | ||||
Net cash provided by operating activities | 50,822 | 50,934 | ||||||
CASH FLOWS - INVESTING ACTIVITIES | ||||||||
Investments in property and equipment, net | (40,626 | ) | (38,641 | ) | ||||
Net cash used in investing activities | (40,626 | ) | (38,641 | ) | ||||
CASH FLOWS - FINANCING ACTIVITIES | ||||||||
Proceeds on account of shareholders' equity , net | 4,602 | (817 | ) | |||||
Debt repayment | (3,000 | ) | (2,000 | ) | ||||
Net cash provided by (used in) financing activities | 1,602 | (2,817 | ) | |||||
Effect of foreign exchange rate change | 1,047 | (1,189 | ) | |||||
INCREASE IN CASH AND CASH EQUIVALENTS | 12,845 | 8,287 | ||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 142,503 | 134,216 | ||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 155,348 | $ | 142,503 |
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||
(dollars in thousands, except per share data) | |||||||||||||
Three months ended |
|||||||||||||
September 30, | June 30, | September 30, | |||||||||||
2015 | 2015 | 2014 | |||||||||||
GAAP | GAAP | GAAP | |||||||||||
REVENUES | $ | 244,181 | $ | 235,561 | $ | 225,994 | |||||||
COST OF REVENUES | 188,798 | 183,101 | 211,273 | ||||||||||
GROSS PROFIT | 55,383 | 52,460 | 14,721 | ||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||
Research and development | 15,980 | 15,148 | 15,858 | ||||||||||
Marketing, general and administrative | 15,348 | 15,806 | 15,915 | ||||||||||
31,328 | 30,954 | 31,773 | |||||||||||
OPERATING PROFIT (LOSS) | 24,055 | 21,506 | (17,052 | ) | |||||||||
INTEREST EXPENSE, NET | (3,567 | ) | (3,613 | ) | (8,661 | ) | |||||||
OTHER NON CASH FINANCING EXPENSE, NET | (5,312 | ) | (7,271 | ) | (5,855 | ) | |||||||
OTHER EXPENSE, NET | (247 | ) | (4 | ) | (358 | ) | |||||||
PROFIT (LOSS) BEFORE INCOME TAX | 14,929 | 10,618 | (31,926 | ) | |||||||||
INCOME TAX BENEFIT (EXPENSE) | (927 | ) | (2,468 | ) | 9,982 | ||||||||
PROFIT (LOSS) BEFORE NON CONTROLLING INTEREST | 14,002 | 8,150 | (21,944 | ) | |||||||||
NON CONTROLLING INTEREST | (451 | ) | (363 | ) | 2,508 | ||||||||
NET PROFIT (LOSS) | $ | 13,551 | $ | 7,787 | $ | (19,436 | ) | ||||||
BASIC EARNINGS (LOSS) PER ORDINARY SHARE | $ | 0.18 | $ | 0.10 | $ | (0.37 | ) | ||||||
Weighted average number of ordinary shares outstanding - in thousands | 77,370 | 76,696 | 53,158 | ||||||||||
DILUTED EARNINGS PER ORDINARY SHARE (a,b) | $ | 0.16 | $ | 0.09 | |||||||||
Net profit used for diluted earnings per share | $ | 13,551 | $ | 7,787 | |||||||||
Weighted average number of ordinary shares outstanding - in thousands, used for diluted earnings per share | 86,837 | 87,558 | |||||||||||
(a) Net profit used for diluted earnings per share for the three months ended September 30, 2015 is $13,551 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 86.8 million. Net profit used for diluted earnings per share for the three months ended June 30, 2015 is $7,787 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 87.6 million. In order to calculate fully diluted share count, the following securities shall be considered: 79 million outstanding shares as of the date of this release, 13 million possible shares underlying options and warrants, 3 million underlying debentures series F, 3 million underlying capital notes and 6 million underlying Jazz notes due December 2018 (unless repayable with cash). |
|||||||||||||
(b) Fully diluted earnings per share calculation and presentation are not applicable under GAAP for periods with GAAP loss. |
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 | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | June 30, | September 30, | June 30, | |||||||||||||||||||||
2015 | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||||||||||||||
non-GAAP | Adjustments (see notes below) | GAAP | ||||||||||||||||||||||||
REVENUES | $ | 244,181 | $ | 235,561 | $ | -- | $ | -- | $ | 244,181 | $ | 235,561 | ||||||||||||||
COST OF REVENUES | 150,575 | 148,183 | 38,223 | (a) | 34,918 | (a) | 188,798 | 183,101 | ||||||||||||||||||
GROSS PROFIT | 93,606 | 87,378 | (38,223 | ) | (34,918 | ) | 55,383 | 52,460 | ||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||
Research and development | 15,777 | 14,374 | 203 | (a) | 774 | (a) | 15,980 | 15,148 | ||||||||||||||||||
Marketing, general and administrative | 14,776 | 14,385 | 572 | (a) | 1,421 | (a) | 15,348 | 15,806 | ||||||||||||||||||
30,553 | 28,759 | 775 | 2,195 | 31,328 | 30,954 | |||||||||||||||||||||
OPERATING PROFIT | 63,053 | 58,619 | (38,998 | ) | (37,113 | ) | 24,055 | 21,506 | ||||||||||||||||||
INTEREST EXPENSE, NET | (3,567 | ) | (3,613 | ) | -- | (b) | -- | (b) | (3,567 | ) | (3,613 | ) | ||||||||||||||
OTHER NON CASH FINANCING EXPENSE, NET | -- | -- | (5,312 | ) | (7,271 | ) | (5,312 | ) | (7,271 | ) | ||||||||||||||||
OTHER EXPENSE, NET | (247 | ) | (4 | ) | -- | -- | (247 | ) | (4 | ) | ||||||||||||||||
PROFIT BEFORE INCOME TAX | 59,239 | 55,002 | (44,310 | ) | (44,384 | ) | 14,929 | 10,618 | ||||||||||||||||||
INCOME TAX EXPENSE | (1,195 | ) | (703 | ) | 268 | (c) | (1,765 | ) | (c) | (927 | ) | (2,468 | ) | |||||||||||||
PROFIT BEFORE NON CONTROLLING INTEREST | 58,044 | 54,299 | (44,042 | ) | (46,149 | ) | 14,002 | 8,150 | ||||||||||||||||||
NON CONTROLLING INTEREST | (451 | ) | (363 | ) | -- | (d) | -- | (d) | (451 | ) | (363 | ) | ||||||||||||||
NET PROFIT | $ | 57,593 | $ | 53,936 | $ | (44,042 | ) | $ | (46,149 | ) | $ | 13,551 | $ | 7,787 | ||||||||||||
NON-GAAP GROSS MARGINS | 38.3 | % | 37.1 | % | ||||||||||||||||||||||
NON-GAAP OPERATING MARGINS | 25.8 | % | 24.9 | % | ||||||||||||||||||||||
NON-GAAP NET MARGINS | 23.6 | % | 22.9 | % | ||||||||||||||||||||||
BASIC EARNINGS PER ORDINARY SHARE (*) | $ | 0.74 | $ | 0.70 | ||||||||||||||||||||||
DILUTED EARNINGS PER ORDINARY SHARE (*) | $ | 0.62 | $ | 0.58 | ||||||||||||||||||||||
(a) Includes depreciation and amortization of fixed and other assets, as well as stock based compensation costs in respect to employees and directors equity grants. | ||||||||||||||||||||||||||
(b) Non-GAAP interest expense, net includes only interest on an accrual basis. | ||||||||||||||||||||||||||
(c) Non-GAAP income tax expense includes taxes paid during the period on a cash basis. | ||||||||||||||||||||||||||
(d) Non-GAAP non-controlling interest does not include any adjustments relating to the company's 51% stake in TPSCo. | ||||||||||||||||||||||||||
(*) The weighted average number of ordinary shares outstanding used for basic earnings per share calculation for the three months ended September 30, 2015 and June 30, 2015 is 77.4 million and 76.7 million, respectively. Net profit used for diluted earnings per share for the three months ended September 30, 2015 is $59,399 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 95.9 million. Net profit used for diluted earnings per share for the three months ended June 30, 2015 is $55,797 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 96.8 million. | ||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
September 30, | September 30, | September 30, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
non-GAAP | Adjustments (see notes below) | GAAP | ||||||||||||||||||||||||
REVENUES | $ | 244,181 | $ | 225,994 | $ | -- | $ | -- | $ | 244,181 | $ | 225,994 | ||||||||||||||
COST OF REVENUES | 150,575 | 158,178 | 38,223 | (a) | 53,095 | (a) | 188,798 | 211,273 | ||||||||||||||||||
GROSS PROFIT | 93,606 | 67,816 | (38,223 | ) | (53,095 | ) | 55,383 | 14,721 | ||||||||||||||||||
OPERATING COSTS AND EXPENSES | ||||||||||||||||||||||||||
Research and development | 15,777 | 15,411 | 203 | (a) | 447 | (a) | 15,980 | 15,858 | ||||||||||||||||||
Marketing, general and administrative | 14,776 | 15,012 | 572 | (a) | 903 | (a) | 15,348 | 15,915 | ||||||||||||||||||
30,553 | 30,423 | 775 | 1,350 | 31,328 | 31,773 | |||||||||||||||||||||
OPERATING PROFIT (LOSS) | 63,053 | 37,393 | (38,998 | ) | (54,445 | ) | 24,055 | (17,052 | ) | |||||||||||||||||
INTEREST EXPENSE, NET | (3,567 | ) | (8,661 | ) | -- | (b) | -- | (b) | (3,567 | ) | (8,661 | ) | ||||||||||||||
OTHER NON CASH FINANCING EXPENSE, NET | -- | -- | (5,312 | ) | (5,855 | ) | (5,312 | ) | (5,855 | ) | ||||||||||||||||
OTHER EXPENSE, NET | (247 | ) | (358 | ) | -- | -- | (247 | ) | (358 | ) | ||||||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 59,239 | 28,374 | (44,310 | ) | (60,300 | ) | 14,929 | (31,926 | ) | |||||||||||||||||
INCOME TAX BENEFIT (EXPENSE) | (1,195 | ) | -- | 268 | (c) | 9,982 | (c) | (927 | ) | 9,982 | ||||||||||||||||
PROFIT (LOSS) BEFORE NON CONTROLLING INTEREST | 58,044 | 28,374 | (44,042 | ) | (50,318 | ) | 14,002 | (21,944 | ) | |||||||||||||||||
NON CONTROLLING INTEREST | (451 | ) | 2,508 | -- | (d) | -- | (d) | (451 | ) | 2,508 | ||||||||||||||||
NET PROFIT (LOSS) | $ | 57,593 | $ | 30,882 | $ | (44,042 | ) | $ | (50,318 | ) | $ | 13,551 | $ | (19,436 | ) | |||||||||||
NON-GAAP GROSS MARGINS | 38.3 | % | 30.0 | % | ||||||||||||||||||||||
NON-GAAP OPERATING MARGINS | 25.8 | % | 16.5 | % | ||||||||||||||||||||||
NON-GAAP NET MARGINS | 23.6 | % | 13.7 | % | ||||||||||||||||||||||
BASIC EARNINGS (LOSS) PER ORDINARY SHARE (*) | $ | 0.74 | $ | 0.58 | ||||||||||||||||||||||
DILUTED EARNINGS PER ORDINARY SHARE (*) | $ | 0.62 | $ | 0.39 | ||||||||||||||||||||||
(a) Includes depreciation and amortization of fixed and other assets, as well as stock based compensation costs in respect to employees and directors equity grants. | ||||||||||||||||||||||||||
(b) Non-GAAP interest expense, net includes only interest on an accrual basis. | ||||||||||||||||||||||||||
(c) Non-GAAP income tax benefit (expense) includes taxes paid during the period on a cash basis. | ||||||||||||||||||||||||||
(d) Non-GAAP non-controlling interest does not include any adjustments relating to the company's 51% stake in TPSCo. | ||||||||||||||||||||||||||
(*) The weighted average number of ordinary shares outstanding used for basic earnings per share calculation for the three months ended September 30, 2015 and 2014 is 77.4 million and 53.2 million, respectively. Net profit used for diluted earnings per share for the three months ended September 30, 2015 is $59,399 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 95.9 million. Net profit used for diluted earnings per share for the three months ended September 30, 2014 is $36,152 and the weighted average number of ordinary shares outstanding used for diluted earnings per share is 92.4 million. | ||||||||||||||||||||||||||
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES | |||||||||||||||||||||||||||
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||||||||||
Nine months ended | Nine months ended | Nine months ended | |||||||||||||||||||||||||
September 30, | September 30, | September 30, | |||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
non-GAAP | Adjustments (see notes below) | GAAP | |||||||||||||||||||||||||
REVENUES | $ | 705,959 | $ | 592,719 | $ | -- | $ | -- | $ | 705,959 | $ | 592,719 | |||||||||||||||
COST OF REVENUES | 444,288 | 418,012 | 120,836 | (a) | 149,011 | (a) | 565,124 | 567,023 | |||||||||||||||||||
GROSS PROFIT | 261,671 | 174,707 | (120,836 | ) | (149,011 | ) | 140,835 | 25,696 | |||||||||||||||||||
OPERATING COSTS AND EXPENSES | |||||||||||||||||||||||||||
Research and development | 44,573 | 36,300 | 1,392 | (a) | 1,163 | (a) | 45,965 | 37,463 | |||||||||||||||||||
Marketing, general and administrative | 44,090 | 40,434 | 3,225 | (a) | 2,824 | (a) | 47,315 | 43,258 | |||||||||||||||||||
Nishiwaki Fab restructuring costs and impairment | -- | -- | -- | 75,728 | -- | 75,728 | |||||||||||||||||||||
Merger related costs | -- | -- | -- | 1,229 | -- | 1,229 | |||||||||||||||||||||
88,663 | 76,734 | 4,617 | 80,944 | 93,280 | 157,678 | ||||||||||||||||||||||
OPERATING PROFIT (LOSS) | 173,008 | 97,973 | (125,453 | ) | (229,955 | ) | 47,555 | (131,982 | ) | ||||||||||||||||||
INTEREST EXPENSE, NET | (10,813 | ) | (25,592 | ) | -- | (b) | -- | (b) | (10,813 | ) | (25,592 | ) | |||||||||||||||
OTHER NON CASH FINANCING EXPENSE, NET (*) | -- | -- | (97,179 | ) | (38,248 | ) | (97,179 | ) | (38,248 | ) | |||||||||||||||||
GAIN FROM ACQUISITION, NET | -- | -- | -- | 166,404 | -- | 166,404 | |||||||||||||||||||||
OTHER EXPENSE, NET | (260 | ) | (155 | ) | -- | -- | (260 | ) | (155 | ) | |||||||||||||||||
PROFIT (LOSS) BEFORE INCOME TAX | 161,935 | 72,226 | (222,632 | ) | (101,799 | ) | (60,697 | ) | (e) | (29,573 | ) | ||||||||||||||||
INCOME TAX BENEFIT (EXPENSE) | (2,362 | ) | -- | 9,861 | (c) | 24,002 | (c) | 7,499 | 24,002 | ||||||||||||||||||
PROFIT (LOSS) BEFORE NON CONTROLLING INTEREST | 159,573 | 72,226 | (212,771 | ) | (77,797 | ) | (53,198 | ) | (e) | (5,571 | ) | ||||||||||||||||
NON CONTROLLING INTEREST | 1,472 | 9,210 | -- | (d) | -- | (d) | 1,472 | 9,210 | |||||||||||||||||||
NET PROFIT (LOSS) | $ | 161,045 | $ | 81,436 | $ | (212,771 | ) | $ | (77,797 | ) | $ | (51,726 | ) | (e) | $ | 3,639 | |||||||||||
NON-GAAP GROSS MARGINS | 37.1 | % | 29.5 | % | |||||||||||||||||||||||
NON-GAAP OPERATING MARGINS | 24.5 | % | 16.5 | % | |||||||||||||||||||||||
NON-GAAP NET MARGINS | 22.8 | % | 13.7 | % | |||||||||||||||||||||||
BASIC EARNINGS (LOSS) PER ORDINARY SHARE (**) | $ | 2.22 | $ | 1.61 | $ | (0.71 | ) | $ | 0.07 | ||||||||||||||||||
(a) Includes depreciation and amortization of fixed and other assets, as well as stock based compensation costs in respect to employees and directors equity grants. | |||||||||||||||||||||||||||
(b) Non-GAAP interest expense, net includes only interest on an accrual basis. | |||||||||||||||||||||||||||
(c) Non-GAAP income tax benefit (expense) includes taxes paid during the period on a cash basis. | |||||||||||||||||||||||||||
(d) Non-GAAP non-controlling interest does not include any adjustments relating to the company's 51% stake in TPSCo. | |||||||||||||||||||||||||||
(e) The differences between the above-referenced GAAP profit (loss) results for the nine months ended September 30, 2015 as compared with the comparable period's results are mainly due to: (i) $59 million other non cash financing expenses included in the nine months ended September 30, 2015, primarily reflecting accelerated accretion resulted from the successful $164 million accelerated conversion of debentures series F (ii) $166 million gain from the acquisition of TPSCo included in the nine months ended September 30, 2014; (iii) $76 million of costs related to Nishiwaki Fab cessation of operations recorded in the nine months ended September 30, 2014; and (iv) Other items resulted in $94 million net positive impact. | |||||||||||||||||||||||||||
(*) Other GAAP non cash financing expense, net for the nine months ended September 30, 2015 mainly include accelerated accretion and amortization resulting from the $164 million accelerated conversion of debentures series F. | |||||||||||||||||||||||||||
(**) The weighted average number of ordinary shares outstanding used for basic earnings per share calculation for the nine months ended September 30, 2015 and 2014 is 72.6 million and 50.5 millions, respectively. |
TowerJazz Investor Relations | Noit Levy-Karoubi, +972 4 604 7066 | Noit.levi@towerjazz.com GK Investor Relations |Kenny Green , (646) 201 9246 | towerjazz@gkir.com