TOWER SEMICONDUCTOR LTD. | |||
Date: July 27, 2023
|
By:
|
/s/ Nati Somekh | |
Name: Nati Somekh | |||
Title: Corporate Secretary | |||
TOWER SEMICONDUCTOR LIMITED
AND SUBSIDIARIES
UNAUDITED CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2023
Page | |
F-2 | |
F-3 | |
F-4 | |
F-5 | |
F-6 - F-7 | |
F-8 - F-9 |
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
(dollars in thousands)
|
As of
|
||||||||
June 30,
|
December 31,
|
|||||||
2023
|
2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Short-term deposits
|
|
|
||||||
Marketable securities (*)
|
|
|
||||||
Trade accounts receivable
|
|
|
||||||
Inventories
|
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||||||
Other current assets
|
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|
||||||
Total current assets
|
|
|
||||||
LONG-TERM INVESTMENTS
|
|
|
||||||
PROPERTY AND EQUIPMENT, NET
|
|
|
||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
|
|
|
||||||
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET
|
|
|
||||||
TOTAL ASSETS
|
$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Current maturities of long-term debt
|
$
|
|
$
|
|
||||
Trade accounts payable
|
|
|
||||||
Deferred revenue and customers' advances
|
|
|
||||||
Employee related liabilities
|
|
|
||||||
Other current liabilities
|
|
|
||||||
Total current liabilities
|
|
|
||||||
LONG-TERM DEBT
|
|
|
||||||
LONG-TERM CUSTOMERS' ADVANCES
|
|
|
||||||
EMPLOYEE RELATED LIABILITIES
|
|
|
||||||
DEFERRED TAX AND OTHER LONG-TERM LIABILITIES
|
|
|
||||||
TOTAL LIABILITIES
|
|
|
||||||
TOTAL SHAREHOLDERS' EQUITY
|
|
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
|
$
|
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
(dollars and shares in thousands, except per share data)
|
Six months ended June 30,
|
Three months ended June 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
REVENUES
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
COST OF REVENUES
|
|
|
|
|
||||||||||||
GROSS PROFIT
|
|
|
|
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||||||||||||
OPERATING COSTS AND EXPENSES:
|
||||||||||||||||
Research and development
|
|
|
|
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||||||||||||
Marketing, general and administrative
|
|
|
|
|
||||||||||||
Restructuring gain from sale of machinery and equipment, net
|
(
|
)
|
|
(
|
)
|
|
||||||||||
Restructuring expense
|
|
|
|
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||||||||||||
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|||||||||||||
OPERATING PROFIT
|
|
|
|
|
||||||||||||
FINANCING AND OTHER INCOME (EXPENSE), NET
|
|
(
|
)
|
|
(
|
)
|
||||||||||
PROFIT BEFORE INCOME TAX
|
|
|
|
|
||||||||||||
INCOME TAX EXPENSE, NET
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
NET PROFIT
|
|
|
|
|
||||||||||||
Net loss (income) attributable to non-controlling interest
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
NET PROFIT ATTRIBUTABLE TO THE COMPANY
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
BASIC EARNINGS PER SHARE
|
||||||||||||||||
Earnings per share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average number of shares
|
|
|
|
|
||||||||||||
DILUTED EARNINGS PER ORDINARY SHARE:
|
||||||||||||||||
Earnings per share
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net profit used for diluted earnings per share
|
|
$
|
|
|
$
|
|
||||||||||
Weighted average number of ordinary shares outstanding
|
||||||||||||||||
used for diluted earnings per share
|
|
|
|
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
|
(dollars in thousands)
|
Six months ended June 30,
|
Three months ended June 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net profit
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Foreign currency translation adjustment
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Change in employees plan assets and benefit obligations, net of taxes
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Unrealized loss on derivatives
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Comprehensive income
|
|
|
|
|
||||||||||||
Comprehensive loss (income) attributable to non-controlling interest
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||
Comprehensive income attributable to the Company
|
$
|
|
$
|
|
$
|
|
$
|
|
See notes to consolidated financial statements.
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
|
THE COMPANY'S SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||||||||||||||||
Accumulated
|
Foreign
|
|||||||||||||||||||||||||||||||||||||||||||
Ordinary
|
Ordinary
|
Additional
|
other
|
currency
|
Accumulated |
Non
|
||||||||||||||||||||||||||||||||||||||
shares
|
shares
|
paid-in
|
Unearned
|
comprehensive
|
translation
|
profit |
Treasury
|
Comprehensive
|
controlling
|
|||||||||||||||||||||||||||||||||||
issued
|
amount
|
capital
|
compensation
|
loss
|
adjustments
|
(deficit)
|
stock
|
income
|
interest
|
Total
|
||||||||||||||||||||||||||||||||||
BALANCE AS OF JANUARY 1, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
Changes during the period:
|
||||||||||||||||||||||||||||||||||||||||||||
Proceeds from an investment in a subsidiary
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Exercise of options and RSUs
|
|
|
(
|
)
|
|
|||||||||||||||||||||||||||||||||||||||
Employee stock-based compensation
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||||||
Profit
|
|
$
|
|
|
|
|||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||
Change in employees plan assets and benefit obligations
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||
Unrealized loss on derivatives
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||
Comprehensive income
|
$
|
|
||||||||||||||||||||||||||||||||||||||||||
BALANCE AS OF JUNE 30, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||||||||||||||||||
OUTSTANDING SHARES, NET OF TREASURY STOCK
AS OF JUNE 30, 2023 |
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(dollars in thousands)
|
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
CASH FLOWS - OPERATING ACTIVITIES
|
||||||||
Net profit for the period
|
$
|
|
$
|
|
||||
Adjustments to reconcile net profit for the period
|
||||||||
to net cash provided by operating activities:
|
||||||||
Income and expense items not involving cash flows:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Effect of exchange rate differences and fair value adjustment
|
|
|
||||||
Other expense, net
|
|
|
||||||
Changes in assets and liabilities:
|
||||||||
Trade accounts receivable
|
(
|
)
|
(
|
)
|
||||
Other current assets
|
|
|
||||||
Inventories
|
(
|
)
|
(
|
)
|
||||
Trade accounts payable
|
|
|
||||||
Deferred revenue and customers' advances
|
(
|
)
|
(
|
)
|
||||
Employee related liabilities and other current liabilities
|
(
|
)
|
|
|||||
Long-term employee related liabilities
|
|
|
||||||
Deferred tax, net and other long-term liabilities
|
(
|
)
|
|
|||||
Net cash provided by operating activities
|
|
|
||||||
CASH FLOWS - INVESTING ACTIVITIES
|
||||||||
Investments in property and equipment, net
|
(
|
)
|
(
|
)
|
||||
Investments in marketable securities and other assets, net
|
|
(
|
)
|
|||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
CASH FLOWS - FINANCING ACTIVITIES
|
||||||||
Proceeds from an investment in a subsidiary
|
|
|
||||||
Exercise of options, net
|
|
|
||||||
Principal payments on account of capital lease obligation
|
(
|
)
|
(
|
)
|
||||
Debentures repayment
|
(
|
)
|
(
|
)
|
||||
Net cash used in financing activities
|
(
|
)
|
(
|
)
|
||||
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGE
|
(
|
)
|
(
|
)
|
||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(
|
)
|
|
|||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
|
|
||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
|
$
|
|
See notes to consolidated financial statements.
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(dollars in thousands)
|
Six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
NON-CASH ACTIVITIES:
|
||||||||
Investments in property and equipment
|
$
|
|
$
|
|
||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||||
Cash received during the period from interest, net of interest paid
|
$
|
|
$
|
|
||||
Cash paid for income taxes, net during the period
|
$
|
|
$
|
|
See notes to consolidated financial statements.
|
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2023
(dollars in thousands, except per share data)
NOTE 2 - INITIAL ADOPTION OF NEW STANDARDS
During the period there was no initial adoption of new accounting standards.
F - 8
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2023
(dollars in thousands, except per share data)
F - 9
Details
|
2023
|
2022
|
||||||
Revenues
|
100
|
%
|
100
|
%
|
||||
Cost of Revenues
|
74.4
|
74.4
|
||||||
Gross profit
|
25.6
|
25.6
|
||||||
Research and Development expense
|
5.4
|
4.8
|
||||||
Marketing, general and administrative expense
|
5.1
|
5.0
|
||||||
Restructuring gain from sale of machinery and equipment, net
|
(7.1
|
)
|
--
|
|||||
Restructuring expense
|
2.6
|
--
|
||||||
Operating profit
|
19.6
|
15.8
|
||||||
Financing and other income (expense), net
|
1.6
|
(1.2
|
)
|
|||||
Profit before income tax
|
21.2
|
14.6
|
||||||
Income tax expense, net
|
(3.0
|
)
|
(1.2
|
)
|
||||
Net profit
|
18.2
|
13.4
|
||||||
Net income attributable to non-controlling interest
|
(1.0
|
)
|
(0.2
|
)
|
||||
Net profit attributable to the company
|
17.2
|
%
|
13.2
|
%
|
Details
|
2023
|
2022
|
||||||
Revenues
|
$
|
712,802
|
$
|
847,300
|
||||
Cost of Revenues
|
530,568
|
630,229
|
||||||
Gross profit
|
182,234
|
217,071
|
||||||
Research and Development expense
|
38,783
|
40,799
|
||||||
Marketing, general and administrative expense
|
36,016
|
42,538
|
||||||
Restructuring gain from sale of machinery and equipment, net
|
(50,282
|
)
|
--
|
|||||
Restructuring expense
|
17,776
|
--
|
||||||
Operating profit
|
139,941
|
133,734
|
||||||
Financing and other income (expense), net
|
10,921
|
(10,295
|
)
|
|||||
Profit before income tax
|
150,862
|
123,439
|
||||||
Income tax expense, net
|
(20,788
|
)
|
(9,492
|
)
|
||||
Net profit
|
130,074
|
113,947
|
||||||
Net income attributable to non-controlling interest
|
(7,482
|
)
|
(1,837
|
)
|
||||
Net profit attributable to the company
|
$
|
122,592
|
$
|
112,110
|