FORM
6-K
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of
February 2010 No. 8
TOWER
SEMICONDUCTOR LTD.
(Translation
of registrant's name into English)
Ramat
Gavriel Industrial Park
P.O.
Box 619, Migdal Haemek, Israel 23105
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or Form 40-F.
Form 20-F
S Form
40-F £
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes £ No
S
On February 24, 2010, the Registrant
announced its financial results for the fourth quarter and fiscal year ended
December 31, 2009. Attached hereto are the following exhibits
|
Exhibit
99.1
|
Press
release dated February 24, 2010
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| TOWER SEMICONDUCTOR LTD. | |||
|
Date:
February 24, 2010
|
By: |
/s/ Nati Somekh Gilboa
|
|
|
Name: Nati
Somekh Gilboa
|
|||
|
Title: Corporate
Secretary
|
|||
Exhibit 99.1
TowerJazz
Announces Fourth Quarter Financial
Results;
Surpassing $100 million Revenue with
Record
EBITDA at $23 million
Q1
2010 guidance expected to be around 94 percent growth year-over-year
and
13 percent sequential growth
MIGDAL HAEMEK, Israel – February 24,
2010 – TowerJazz, the global specialty foundry leader, today announced
financial results for the fourth quarter and fiscal year ended December 31,
2009.
Highlights
|
·
|
Record
revenue of $100.6 million in Q4 2009, growing 30 percent over last year
and 26 percent sequentially
|
|
·
|
Guiding
for continued sequential growth into Q1 2010, expecting $110-115 million
in revenues, 94 percent growth as compared to Q1
2009
|
|
·
|
Gross
profit of $38.7 million in Q4 2009 with margins of 39 percent on a
non-GAAP basis, as compared to $15.6 million and 20 percent in Q4
2008.
|
|
·
|
Operating
profit of $23.3 million in Q4 2009 with margins of 23 percent on a
non-GAAP basis, as compared to $1.7 million and 2 percent in Q4
2008.
|
|
·
|
Full
year revenues at $298.8 million, up 19 percent over last year,
significantly higher than the
industry.
|
|
·
|
Strong
year-end cash-balance of $81.8 million, as compared to $34.9 million as of
December 2008
|
2009
fourth quarter and full year results summary
Fourth
quarter 2009 revenue was $100.6 million, representing a 26 percent increase over
third quarter 2009 revenue of $79.6 million and 30 percent over fourth quarter
2008 revenue of $77.5 million. Full year 2009 revenues were $298.8 million, 19
percent higher than $251.7 million recorded in 2008.
On a
non-GAAP basis, as described and reconciled below, the gross profit for the
fourth quarter 2009 was $38.7 million, a sequential growth 50 percent, and
representing 39 percent margins. Comparing to the fourth quarter of 2008,
non-GAAP gross margin increased from 20 to 39 percent. Non-GAAP operating profit
in the fourth quarter 2009 was $23.3 million, substantially higher than $1.7
million and $13.0 million achieved in the fourth quarter of 2008 and third
quarter 2009, respectively.
Calculated
in accordance with GAAP, TowerJazz achieved in the fourth quarter 2009 gross
profit for the first time since 2000 of $6.6 million, as compared to gross loss
of $5.3 million and gross loss of $10.8 million in the third quarter 2009 and
fourth quarter 2008, respectively. Net loss for the fourth quarter 2009 was
$31.4 million as compared to $30.2 million for the previous quarter, or $0.16
and $0.18 per share, respectively, including for the fourth quarter of 2009 GAAP
financing expenses of $18.7 million, resulting mainly from non-cash GAAP
financing expenses due to the significant increase in market and fair value of
the Company’s tradable securities.
EBITDA
for the fourth quarter of 2009 was $23 million, an all time record, and up
substantially from $2 million reported in the fourth quarter of 2008 and $15
million in third quarter 2009.
Company’s
cash balance, as of December 31, 2009 was $81.8 million, as compared to $34.9
million as of December 2008 and $51.7 million as of September 2009.
“2009
demonstrated an inflection year for the Company, in realizing our strategy of
becoming the worldwide specialty foundry leader. All of our business
units achieved substantial tactical and strategic customer
wins. Breaking the significant milestone of $100 million in quarterly
revenue with record EBITDA and record annual design wins while expecting
continued 2010 growth, despite foundry seasonality, is evidence of our continued
strong positive trajectory,” commented Russell Ellwanger, Chief Executive
Officer. “We have on hand many substantive opportunities targeting beyond a $500
million annual revenue run-rate.”
Amir
Elstein, Chairman of the Board, commented, “The activities in 2009 and the
company’s performance, culminating in 19 percent year-over-year revenue increase
against a double-digit downturn for the industry, is confirmation of the vast
capabilities of the TowerJazz management and the entire team, and is indicative
of a customer-centric company with well-defined strategy and goals. I remain
confident and boldly optimistic with regard to the coming quarters. In addition,
these accomplishments are a great tribute to our CEO who was recognized and
appreciated by fellow industry experts, as the Israeli Hi-Tech CEO of the year,
for the TowerJazz business breakthrough.”
Financial
Guidance
TowerJazz
forecasts revenue in the first quarter of 2010 to range between $110 and $115
million, representing a sequential revenue growth of 9-14 percent and 89-98
percent year-over-year growth in revenues.
Conference
Call and Web Cast Announcement
TowerJazz
will host a conference call to discuss fourth quarter 2009 results today,
February 24, 2010, at 10:00 a.m. Eastern Time (EST) / 5:00 p.m. Israel
time.
To
participate, please call:
1-888-407-2553
(U.S. toll-free number) or +972-3-918-0609 (international) and
mention ID code: TOWER-JAZZ
Callers
in Israel are invited to call locally by dialing 03-918-0609. The conference
call will also be Web cast live at www.earnings.com and
at www.towerjazz.com and
will be available thereafter on both Web sites for replay for a period 90 days,
starting a few hours following the call.
As
previously announced, beginning with the fourth quarter of 2007, the Company has
been presenting its financial statements in accordance with U.S.
GAAP.
As
applied in this release, the term Earnings Before Interest Tax Depreciation and
Amortization (EBITDA) consists of loss, according to U.S. GAAP, excluding
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 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, or other income or cash flow statement data
prepared in accordance with 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 Securities
and Exchange Commission as they apply to our company. These non-GAAP financial
measures exclude (1) depreciation and amortization and (2) compensation expenses
in respect of options granted to directors, officers and employees. Non-GAAP
financial measures should be evaluated in conjunction with, and are not a
substitute for, GAAP financial measures. The tables also present the GAAP
financial measures, which are most comparable to the non-GAAP financial measures
as well as reconciliation between the non-GAAP financial measures and the most
comparable GAAP financial measures. The non-GAAP financial information presented
herein should not be considered in isolation from 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 to the non-GAAP data presented in previous filings.
Following
the merger with Jazz, the amounts presented in this release, including the
financial tables below, include Jazz's results commencing September 19, 2008.
Amounts presented for periods preceding the merger with Jazz reflect Tower’s
results only. The balance sheet as of December 31, 2009, September 30, 2009 and
December 31, 2008 includes Jazz's balances as of such dates.
About
TowerJazz
Tower
Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM),
the global specialty foundry
leader and its fully owned U.S. subsidiary Jazz Semiconductor,
operate collectively under the brand name TowerJazz,
manufacturing integrated circuits with geometries ranging from
1.0 to 0.13-micron. TowerJazz provides industry leading
design enablement tools to allow complex designs to be achieved quickly and
more accurately and offers a broad range of customizable process
technologies including SiGe, BiCMOS, Mixed-Signal and RFCMOS, CMOS Image Sensor,
Power Management (BCD), and Non-Volatile Memory (NVM) as well as MEMS
capabilities. To provide world-class customer service, TowerJazz maintains two
manufacturing facilities in Israel and one in the U.S. with additional capacity
available in China through manufacturing partnerships. For more information,
please visit www.towerjazz.com.
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) the large amount of debt
and 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) having customer demand that will exceed our
manufacturing capacity, (x) meeting the conditions to receive Israeli government
grants and tax benefits approved for Fab2 and obtaining the approval of the
Israeli Investment Center for an expansion program, (xi) our ability to
accurately forecast financial performance, which is affected by limited order
backlog and lengthy sales cycles, (xii) the purchase of equipment to increase
capacity, the completion of the equipment installation, technology transfer and
raising the funds therefor, (xiii) our dependence on a relatively small number
of products for a significant portion of our revenue, (xiv) a substantial
portion of our revenues being accounted for by a small number of customers, (xv)
the concentration of our business in the semiconductor industry, (xvi) product
returns, (xvii) 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, (xviii) competing effectively, (xix) achieving acceptable device yields,
product performance and delivery times, (xx) possible production or yield
problems in our wafer fabrication facilities, (xxi) our ability to manufacture
products on a timely basis, (xxii) 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, (xxiii) pending resolution of patent infringement
claim against the Company, (xxiv) retention of key employees and retention and
recruitment of skilled qualified personnel, (xxv) exposure to inflation,
currency exchange and interest rate fluctuations and risks associated with doing
business internationally and in Israel, and (xxvi) business interruption due to
fire, the security situation in Israel and other events beyond our
control.
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
Securities and Exchange Commission (the “SEC”) and the Israel Securities
Authority and Jazz’s most recent filings on Forms 10-K and 10-Q, as were filed
with the SEC. Future results may differ materially from those previously
reported. The Company does not intend to update, and expressly disclaims any
obligation to update, the information contained in this release.
Contacts
|
TowerJazz
Investor Relations
Noit Levi, +972 4 604 7066
Noit.levi@towerjazz.com
|
CCG
Investor Relations
Ehud
Helft / Kenny Green, (646) 201 9246
towersemi@ccgisrael.com
|
|
TOWER
SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(dollars
in thousands)
|
|
December
31,
|
September
30,
|
December
31,
|
||||||||||
|
2009
|
2009
|
2008
|
||||||||||
|
unaudited
|
||||||||||||
|
A
S S E T S
|
||||||||||||
|
CURRENT
ASSETS
|
||||||||||||
|
Cash
and cash equivalents
|
$ | 81,795 | $ | 51,708 | $ | 34,905 | ||||||
|
Trade
accounts receivable
|
40,604 | 42,121 | 45,860 | |||||||||
|
Other
receivables
|
2,520 | 3,418 | 2,320 | |||||||||
|
Inventories
|
32,250 | 28,746 | 40,899 | |||||||||
|
Other
current assets
|
11,184 | 7,519 | 7,657 | |||||||||
|
Total
current assets
|
168,353 | 133,512 | 131,641 | |||||||||
|
LONG-TERM
INVESTMENTS
|
29,361 | 29,579 | 29,499 | |||||||||
|
PROPERTY
AND EQUIPMENT, NET
|
371,400 | 388,234 | 449,697 | |||||||||
|
INTANGIBLE
ASSETS, NET
|
67,601 | 70,983 | 81,034 | |||||||||
|
GOODWILL
|
7,000 | 7,000 | 7,000 | |||||||||
|
OTHER
ASSETS, NET
|
8,002 | 8,282 | 8,802 | |||||||||
|
TOTAL
ASSETS
|
$ | 651,717 | $ | 637,590 | $ | 707,673 | ||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||||||
|
CURRENT
LIABILITIES
|
||||||||||||
|
Current
maturities of convertible debenture
|
$ | -- | $ | -- | $ | 8,330 | ||||||
|
Short
term bank loan
|
7,000 | 4,440 | 7,000 | |||||||||
|
Trade
accounts payable
|
42,012 | 39,180 | 49,462 | |||||||||
|
Deferred
revenue
|
24,696 | 4,100 | 6,634 | |||||||||
|
Other
current liabilities
|
23,652 | 32,228 | 35,202 | |||||||||
|
Total
current liabilities
|
97,360 | 79,948 | 106,628 | |||||||||
|
LONG-TERM
DEBT
|
428,813 | 416,555 | 431,501 | |||||||||
|
LONG-TERM
CUSTOMERS' ADVANCES
|
8,262 | 12,412 | 11,138 | |||||||||
|
OTHER
LONG-TERM LIABILITIES
|
60,388 | 55,020 | 45,959 | |||||||||
|
Total
liabilities
|
594,823 | 563,935 | 595,226 | |||||||||
|
SHAREHOLDERS'
EQUITY
|
56,894 | 73,655 | 112,447 | |||||||||
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
$ | 651,717 | $ | 637,590 | $ | 707,673 | ||||||
|
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,
|
December
31,
|
December
31,
|
December
31,
|
|||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||||
|
non-GAAP
|
Adjustments
(see a, b, c below)
|
GAAP
|
||||||||||||||||||||||
|
REVENUES
|
$ | 100,616 | $ | 77,453 | $ | -- | $ | -- | $ | 100,616 | $ | 77,453 | ||||||||||||
|
COST
OF REVENUES
|
61,868 | 61,894 | 32,194 | (a) | 26,346 | (a) | 94,062 | 88,240 | ||||||||||||||||
|
GROSS
PROFIT (LOSS)
|
38,748 | 15,559 | (32,194 | ) | (26,346 | ) | 6,554 | (10,787 | ) | |||||||||||||||
|
OPERATING
COSTS AND EXPENSES
|
||||||||||||||||||||||||
|
Research
and development
|
6,694 | 4,625 | 317 | (b) | 654 | (b) | 7,011 | 5,279 | ||||||||||||||||
|
Marketing, general and administrative
|
8,711 | 9,186 | 1,319 | (c) | 1,352 | (c) | 10,030 | 10,538 | ||||||||||||||||
|
Write-off of in-process research and
development
|
-- | -- | -- | (500 | ) | -- | (500 | ) | ||||||||||||||||
| 15,405 | 13,811 | 1,636 | 1,506 | 17,041 | 15,317 | |||||||||||||||||||
|
OPERATING
PROFIT (LOSS)
|
$ | 23,343 | $ | 1,748 | $ | (33,830 | ) | $ | (27,852 | ) | $ | (10,487 | ) | $ | (26,104 | ) | ||||||||
|
BASIC
OPERATING PROFIT (LOSS) PER ORDINARY SHARE
|
||||||||||||||||||||||||
|
Operating
profit (loss) per share
|
$ | 0.12 | $ | 0.01 | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.05 | ) | $ | (0.16 | ) | ||||||||
|
Weighted average number of ordinary
|
||||||||||||||||||||||||
|
shares
outstanding - in thousands
|
194,236 | 159,747 | -- | -- | 194,236 | 159,747 | ||||||||||||||||||
|
NON-GAAP
GROSS MARGINS
|
39 | % | 20 | % | ||||||||||||||||||||
|
NON-GAAP OPERATING MARGINS
|
23 | % | 2 | % | ||||||||||||||||||||
|
(a)
|
Includes
depreciation and amortization expenses in the amounts of $32,046 and
$26,150 and stock based compensation expenses in the amounts of $148 and
$196 for the three months ended December 31, 2009 and December 31, 2008,
respectively.
|
|||||
|
(b)
|
Includes
depreciation and amortization expenses in the amounts of $148 and $532 and
stock based compensation expenses in the amounts of $169 and $122 for the
three months ended December 31, 2009 and December 31, 2008,
respectively.
|
|||||
|
(c)
|
Includes
depreciation and amortization expenses in the amounts of $340 and $325 and
stock based compensation expenses in the amounts of $979 and $1,027 for
the three months ended December 31, 2009 and December 31, 2008,
respectively.
|
|||||
|
(d)
|
2008
data are similar to those previously presented, prior to any adjustments
following the inventory change method occurred in 2009.
|
|||||
|
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,
|
|||||||||||||||||||
|
2009
|
2009
|
2009
|
2009
|
2009
|
2009
|
|||||||||||||||||||
|
non-GAAP
|
Adjustments
(see a, b, c below)
|
GAAP
|
||||||||||||||||||||||
|
REVENUES
|
$ | 100,616 | $ | 79,570 | $ | -- | $ | -- | $ | 100,616 | $ | 79,570 | ||||||||||||
|
COST
OF REVENUES
|
61,868 | 53,710 | 32,194 | (a) | 31,205 | (a) | 94,062 | 84,915 | ||||||||||||||||
|
GROSS
PROFIT (LOSS)
|
38,748 | 25,860 | (32,194 | ) | (31,205 | ) | 6,554 | (5,345 | ) | |||||||||||||||
|
OPERATING
COSTS AND EXPENSES
|
||||||||||||||||||||||||
|
Research
and development
|
6,694 | 5,769 | 317 | (b) | 288 | (b) | 7,011 | 6,057 | ||||||||||||||||
|
Marketing, general
and administrative
|
8,711 | 7,060 | 1,319 | (c) | 965 | (c) | 10,030 | 8,025 | ||||||||||||||||
| 15,405 | 12,829 | 1,636 | 1,253 | 17,041 | 14,082 | |||||||||||||||||||
|
OPERATING
PROFIT (LOSS)
|
$ | 23,343 | $ | 13,031 | $ | (33,830 | ) | $ | (32,458 | ) | $ | (10,487 | ) | $ | (19,427 | ) | ||||||||
|
BASIC
OPERATING PROFIT (LOSS) PER ORDINARY SHARE
|
||||||||||||||||||||||||
|
Operating
profit (loss) per share
|
$ | 0.12 | $ | 0.08 | $ | (0.17 | ) | $ | (0.20 | ) | $ | (0.05 | ) | $ | (0.12 | ) | ||||||||
|
Weighted
average number of ordinary
|
||||||||||||||||||||||||
|
shares
outstanding - in thousands
|
194,236 | 167,200 | -- | -- | 194,236 | 167,200 | ||||||||||||||||||
|
NON-GAAP
GROSS MARGINS
|
39 | % | 32 | % | ||||||||||||||||||||
|
NON-GAAP
OPERATING MARGINS
|
23 | % | 16 | % | ||||||||||||||||||||
|
(a)
|
Includes
depreciation and amortization expenses in the amounts of $32,046 and
$31,067 and stock based compensation expenses in the amounts of $148 and
$138 for the three months ended December 31, 2009 and September 30, 2009,
respectively.
|
|||||||||||||||||
|
(b)
|
Includes
depreciation and amortization expenses in the amounts of $148 and $154 and
stock based compensation expenses in the amounts of $169 and $134 for the
three months ended December 31, 2009 and September 30, 2009,
respectively.
|
|||||||||||||||||
|
(c)
|
Includes
depreciation and amortization expenses in the amounts of $340 and $357 and
stock based compensation expenses in the amounts of $979 and $608 for the
three months ended December 31, 2009 and September 30, 2009,
respectively.
|
|||||||||||||||||
|
TOWER
SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(dollars
in thousands, except per share
data)
|
|
Three
months ended
|
Year
ended
|
|||||||
|
December
31,
|
December
31,
|
|||||||
|
2009
|
2009
|
|||||||
|
GAAP
|
GAAP
|
|||||||
|
(UNAUDITED)
|
||||||||
|
REVENUES
|
$ | 100,616 | $ | 298,812 | ||||
|
COST
OF REVENUES
|
94,062 | 325,310 | ||||||
|
GROSS
PROFIT (LOSS)
|
6,554 | (26,498 | ) | |||||
|
OPERATING
COSTS AND EXPENSES
|
||||||||
|
Research
and development
|
7,011 | 23,375 | ||||||
|
Marketing,
general and administrative
|
10,030 | 31,943 | ||||||
| 17,041 | 55,318 | |||||||
|
OPERATING
LOSS
|
(10,487 | ) | (81,816 | ) | ||||
|
FINANCING
EXPENSE, NET
|
(18,678 | ) | (45,710 | ) | ||||
|
OTHER
INCOME (EXPENSE), NET
|
(118 | ) | 2,045 | |||||
|
LOSS
BEFORE INCOME TAX
|
(29,283 | ) | (125,481 | ) | ||||
|
INCOME
TAX BENEFIT (PROVISION)
|
(2,128 | ) | 5,022 | |||||
|
NET
LOSS FOR THE PERIOD
|
$ | (31,411 | ) | $ | (120,459 | ) | ||
|
BASIC
LOSS PER ORDINARY SHARE
|
||||||||
|
loss
per share
|
$ | (0.16 | ) | $ | (0.71 | ) | ||
|
Weighted
average number of ordinary
|
||||||||
|
shares
outstanding - in thousands
|
194,236 | 170,460 | ||||||