Revenues up 34% year over year; EBITDA up
54% year over year resulting in Net Profit of $51 million and Cash
from Operations of $86 million
TowerJazz (NASDAQ:TSEM) (TASE:TSEM) today reported results for the
third quarter of 2016 ended September 30, 2016.
Highlights of the Third Quarter of
2016
- Record revenues of $326 million, 34% year over year
growth;
- Record EBITDA of $97 million, up 54% year-over-year;
- Net profit of $51 million with basic earnings per share of
$0.58, as compared with $14 million, or $0.18 basic earnings per
share, in the third quarter of last year;
- Cash from operations of $86 million as compared to $51 million
for the third quarter of 2015, with free cash flow of $31 million
as compared with $10 million for the third quarter of 2015;
- Fourth quarter revenue guidance with mid-range of $340 million,
representing 34% year over year growth; extending to 12 consecutive
quarters of year over year growth.
CEO CommentaryMr.
Russell Ellwanger, Chief Executive Officer of TowerJazz,
commented, “our third quarter is our eleven consecutive
quarter of year over year revenue and EBITDA growth and yielded
approximately $400 million, $340 million and $200 million of
annualized EBITDA, cash from operations and net profit,
respectively. These results speak loudly to our business model and
execution, including acquisitions that provide immediate ROI with
long term revenue and margin guarantees from our seller partners
and incremental growth against fully covered fixed costs. We have
developed a customer base from which we continue to see strong
demand across our different business units for our leading edge
forefront differentiated technology. In addition, our worldwide
operational model allows us to optimize product mix according to
utilization rates, as demonstrated with significant increase in
margins and EPS.”
Ellwanger continued, “We expect
to complete 2016 as the strongest year in our history. Based on our
mid-range guidance, full year revenues would be $1.25 billion, a
foundry leading year-over-year growth of 30% with more than
proportional increase in all related financial metrics.”
Third Quarter Results
OverviewRevenues for the third quarter of
2016 were a record of $326 million, reflecting 34% growth as
compared with $244 million reported for the third quarter of 2015
and 7% higher than the $305 million reported in the immediately
preceding quarter.
Gross profit for the third
quarter of 2016 was $81 million. This represents an increase of 47%
as compared with $55 million in gross profit in the third quarter
of 2015, and an increase of 12% as compared with $73 million gross
profit in the immediately preceding quarter.
Operating profit was $49
million for the third quarter of 2016, as compared with $24 million
as reported in the third quarter of 2015 and $40 million in the
immediately preceding quarter.
Net profit for the third
quarter of 2016 was $51 million, or $0.58 in basic earnings per
share, demonstrating increased net profit as compared with $14
million or $0.18 earnings per share in the third quarter of 2015
and as compared with $38 million, or $0.45 earnings per share in
the second quarter of 2016. Net profit for the third quarter of
2016 included $6.5 million of income tax benefit related to
finalization of the closure of the Japanese subsidiary that held
the fab in Nishiwaki that ceased operations in 2014.
On an adjusted basis, as described and
reconciled in the tables below, adjusted net
profit for the third quarter of 2016 was $49 million, as
compared with $19 million adjusted net profit reported for the
third quarter of 2015 and $40 million reported in the immediately
preceding quarter.
EBITDA for the third quarter of
2016 totaled $97 million. This represents a 54% increase as
compared with $63 million in the third quarter of 2015 and 11%
increase as compared with $87 million in the second quarter of
2016.
Cash and short-term deposits as
of September 30, 2016 were $363 million, as compared with $311
million as of June 30, 2016. The main cash activities during the
third quarter of 2016 were comprised mainly of the following: $86
million cash generated from operations; $22 million from exercise
of warrants and options; $9 million debt received, net; investments
of $55 million in fixed assets, net; and investment of $12 million
in long term deposits. These cash activities resulted in
free cash flow for the third quarter of 2016 of
$31 million, as compared with $10 million in the third quarter of
2015 and $27 million, which included $11 million, net, of received
customer prepayments, in the second quarter of 2016.
Shareholders' equity as of
September 30, 2016 was $636 million, an increase of 65% as compared
with $386 million as of December 31, 2015 and an increase of 14% as
compared with $559 million as of June 30, 2016. Net debt
amounted to $16 million as of September 30, 2016 as compared with
net debt of $51 million as of June 30, 2016.
Nine Months Results Overview
Revenues for the first nine months of 2016 were a
record $909 million, reflecting 29% growth as compared to $706
million in the first nine months of 2015.
Gross and operating profit for
the first nine months of 2016 were $215 million and $120 million,
respectively, reflecting a 53% and 152% increase respectively, as
compared to gross and operating profit of $141 million and $48
million in the first nine months of 2015, respectively.
Net profit for the first nine
months of 2016 was $156 million, or $1.81 in basic earnings per
share. This included $51 million gain from the San Antonio
acquisition and $6.5 million income tax benefit related to the
finalization of the closure of the Nishiwaki Japanese subsidiary,
which were partially offset by $7 million non-cash financing
expenses relating to the Israeli banks’ loans early repayment. This
is compared to a net loss for the nine months ended September 30,
2015 of $52 million which included $74 million in a non-cash
finance expense associated with Series F Bonds accelerated
conversion done in 2015 and $11 million income tax benefit
resulting from expiration of statute of limitations.
Excluding the above described one-time items,
net profit for the first nine months of 2016 was $105 million as
compared with $11 million for the first nine months of 2015, a $94
million improvement against $203 million of higher revenues.
EBITDA for the first nine
months totaled $261 million, representing a 51% increase as
compared to $173 million in the first nine months of 2015.
Cash from operations was $246
million in the first nine months of 2016 with free cash
flow of $79 million, as compared to $117 million and $10
million, respectively, in the first nine months of 2015.
Business OutlookTowerJazz
expects revenues for the fourth quarter of 2016 ending December 31,
2016 to be $340 million, with an upward or downward range of 5%,
representing approximately 34% year over year revenue growth as
compared with the fourth quarter of 2015.
Teleconference and Webcast
TowerJazz will host an investor conference call today, November 15,
2016, at 10:00 a.m. Eastern time (9:00 a.m. Central time, 8:00 a.m.
Mountain time, 7:00 a.m. Pacific time and 5:00 p.m. Israel time) to
discuss the Company’s financial results for the third quarter 2016
and its fourth quarter 2016 outlook.
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), 03-918-0644 (Israel),
+972-3-918-0644 (International). For those who are not
available to listen to the live broadcast, the call will be
archived for 90 days.
Investor and Analyst
ConferenceTowerJazz will be hosting an Investor and
Analyst Conference on Wednesday, November 16, 2016 in New York. The
conference will commence at 10:00am Eastern time and will take
place at NASDAQ MarketSite – Press Conference Area, 4 Times Square,
New York City. The event will follow an opening bell ceremony at
9:30am, in which TowerJazz’s management will formally ring the bell
at the open of the NASDAQ market.
The Investor and Analyst Conference is designed
to provide the Company’s existing and potential investors and
analysts an opportunity to learn more about TowerJazz’s strategy,
business, operations and financials, while demonstrating the
Company’s strength and capabilities that enable value creation.
During the event, TowerJazz will present its
business and financial strategies, performance, achievements and
future goals. Presentation slides will be posted on the day of the
event at www.towerjazz.com under the section: Investors,
Investors Resources, Presentations.
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 Securities and
Exchange Commission as they apply to our Company. These adjusted
financial measures are calculated excluding one or more of the
following: (1) amortization of acquired intangible assets; (2)
compensation expenses in respect of equity grants to directors,
officers and employees; (3) gain from acquisition, net; (4) other
non-cash financing expense, net associated with Bonds Series F
accelerated conversion (5) non-cash financing expenses related to
bank loans early repayment and (6) non-recurring income tax
benefit. These adjusted 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 adjusted financial measures as
well as reconciliation between the adjusted financial measures and
the comparable GAAP financial measures. As used in this release,
the term Earnings Before Interest Tax Depreciation and Amortization
(EBITDA) consists of profit or loss, according to U.S. GAAP,
excluding gain from acquisition, net, interest and other financing
expenses (net), other income (expense), net, taxes, non-controlling
interest, depreciation and amortization and stock based
compensation expenses. EBITDA is reconciled in the tables below
from GAAP operating profit. EBITDA is not a required GAAP financial
measure and may not be comparable to a similarly titled measure
employed by other companies. EBITDA and the adjusted financial
information presented herein should not be considered in isolation
or as a substitute for operating profit, net profit or loss, cash
flows provided by operating, investing and financing activities,
per share data or other profit or cash flow statement data prepared
in accordance with GAAP. Net debt, as presented in this release, is
comprised of the outstanding principal amount of banks’ loans (in
the amounts of approximately $192 million, $175 million and $246
million as of September 30, 2016, June 30, 2016 and December 31,
2015, respectively) and the outstanding principal amount of
debentures (in the amounts of approximately $187 million, $187
million and $65 million as of September 30, 2016, June 30,
2016 and December 31, 2015, respectively), less cash and short-term
deposits (in the amounts of approximately $363 million, $311
million and $206 million as of September 30, 2016, June 30, 2016
and December 31, 2015, respectively).
About TowerJazzTower
Semiconductor Ltd. (NASDAQ:TSEM) (TASE:TSEM) and its fully owned
U.S. subsidiary Jazz Semiconductor, Inc. operate collectively under
the brand name TowerJazz, the global specialty foundry leader.
TowerJazz manufactures integrated circuits, offering a broad range
of customizable process technologies including: SiGe, BiCMOS,
mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power
management (BCD and 700V), and MEMS. TowerJazz also provides a
world-class design enablement platform for a quick and accurate
design cycle as well as Transfer Optimization and development
Process Services (TOPS) to IDMs and fabless companies that need to
expand capacity.
To provide multi-fab sourcing and extended
capacity for its customers, TowerJazz operates two manufacturing
facilities in Israel (150mm and 200mm), two in the U.S. (200mm) and
three additional facilities in Japan (two 200mm and one 300mm)
through TowerJazz Panasonic Semiconductor Co. (TPSCo), established
with Panasonic Corporation of which TowerJazz has the majority
holding. Through TPSCo, TowerJazz provides leading edge 45nm CMOS,
65nm RF CMOS and 65nm 1.12um pixel technologies, including the most
advanced image sensor technologies. For more information, please
visit www.towerjazz.com or www.tpsemico.com.
CONTACTS: Noit Levi | TowerJazz
| +972 4 604 7066 | Noit.levi@towerjazz.comGavriel Frohwein | GK
Investor Relations | (646) 688 3559 | towerjazz@gkir.com
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 lender banks and
bondholders, (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
Israel, following a short sell thesis report issued by a
short-selling focused firm, which has been dismissed and closed in
the US and is still pending in Israel; (xi) our majority stake in
TPSCo and our acquisition of the San Antonio fabrication facility
by TowerJazz Texas (“TJT”), including new customer
engagements, qualification and production ramp-up, (xii)the closure
of TJP within the scope of restructuring our activities and
business in Japan, settling any future claims or potential claims
from third parties, (xiii) 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, (xiv) receipt of orders that are lower than the customer
purchase commitments, (xv) failure to receive orders currently
expected, (xvi) possible incurrence of additional
indebtedness, (xvii) effect of global recession, unfavorable
economic conditions and/or credit crisis, (xviii) our ability to
accurately forecast financial performance, which is affected by
limited order backlog and lengthy sales cycles, (xix) possible
situations of obsolete inventory if forecasted demand exceeds
actual demand when we manufacture products before receipt of
customer orders, (xx) the cyclical nature of the semiconductor
industry and the resulting periodic overcapacity, fluctuations in
operating results and future average selling price erosion, (xxi)
the execution of our debt re-financing, restructuring and/or
fundraising to enable the service and/or re-financing of our debt
and other liabilities, (xxii) operating our facilities at high
utilization rates which is critical in order to cover a portion or
all of the high level of fixed costs associated with operating a
foundry, and our debt, in order to improve our results,
(xxiii) the purchase of equipment to increase capacity, the
timely completion of the equipment installation, technology
transfer and raising the funds therefore, (xxiv) the concentration
of our business in the semiconductor industry, (xxv) product
returns, (xxvi) 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, (xxvii) competing
effectively, (xxviii) use of outsourced foundry services by both
fabless semiconductor companies and integrated device
manufacturers; (xxix) achieving acceptable device yields,
product performance and delivery times, (xxx) 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, (xxxi) retention of key employees and recruitment and
retention of skilled qualified personnel, (xxxii) exposure to
inflation, currency rates (mainly the Israeli Shekel and Japanese
Yen) and interest rate fluctuations and risks associated with doing
business locally and internationally, as well fluctuations in
the market price of our traded securities, (xxxiii) issuance of
ordinary shares as a result of conversion and/or exercise of any of
our convertible securities, as well as any sale of shares by any of
our shareholders, or any market expectation thereof, which may
depress the market price of our ordinary shares and may impair our
ability to raise future capital, (xxxiv) meeting regulatory
requirements worldwide, including environmental and governmental
regulations; and (xxxv) business interruption due to fire and other
natural disasters, the security situation in Israel and other
events beyond our control such as power interruptions.
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 Securities and Exchange Commission (the “SEC”) and the
Israel Securities Authority. 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.
(Financial tables follow)
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A S S E T S |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short term deposits |
$ |
362,833 |
|
$ |
311,062 |
|
$ |
205,575 |
|
|
|
Trade accounts receivable |
|
128,979 |
|
|
126,839 |
|
|
110,065 |
|
|
|
Other receivables |
|
|
8,935 |
|
|
13,993 |
|
|
7,376 |
|
|
|
Inventories |
|
|
143,090 |
|
|
136,125 |
|
|
105,681 |
|
|
|
Other current assets |
|
|
23,916 |
|
|
21,581 |
|
|
18,030 |
|
|
|
|
Total current assets |
|
|
667,753 |
|
|
609,600 |
|
|
446,727 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM INVESTMENTS |
|
24,616 |
|
|
11,861 |
|
|
11,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, NET |
|
643,046 |
|
|
625,163 |
|
|
459,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS, NET |
|
32,687 |
|
|
34,807 |
|
|
34,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GOODWILL |
|
|
7,000 |
|
|
7,000 |
|
|
7,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER ASSETS, NET |
|
|
4,535 |
|
|
4,586 |
|
|
5,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,379,637 |
|
$ |
1,293,017 |
|
$ |
965,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Short term debt |
|
$ |
41,646 |
|
$ |
38,174 |
|
$ |
33,259 |
|
|
|
Trade accounts payable |
|
|
105,745 |
|
|
98,829 |
|
|
91,773 |
|
|
|
Deferred revenue and customers' advances |
|
25,878 |
|
|
18,802 |
|
|
23,373 |
|
|
|
Other current liabilities |
|
|
81,248 |
|
|
87,386 |
|
|
62,714 |
|
|
|
|
|
Total current liabilities |
|
254,517 |
|
|
243,191 |
|
|
211,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT |
|
|
330,526 |
|
|
320,444 |
|
|
256,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM CUSTOMERS' ADVANCES |
|
36,547 |
|
|
48,999 |
|
|
21,102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EMPLOYEE RELATED LIABILITIES |
|
14,169 |
|
|
14,029 |
|
|
14,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEFERRED TAX LIABILITY |
|
107,843 |
|
|
107,585 |
|
|
77,353 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
743,602 |
|
|
734,248 |
|
|
579,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL SHAREHOLDERS' EQUITY |
|
|
636,035 |
|
|
558,769 |
|
|
385,586 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
$ |
1,379,637 |
|
$ |
1,293,017 |
|
$ |
965,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) |
|
(dollars and share count in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T h r e e
m o n t h s e n d e
d |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
GAAP |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
$ |
|
326,209 |
|
$ |
|
305,003 |
|
$ |
|
244,181 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES |
|
|
|
244,915 |
|
|
|
232,275 |
|
|
|
188,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
81,294 |
|
|
|
72,728 |
|
|
|
55,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
15,547 |
|
|
|
16,030 |
|
|
|
15,980 |
|
|
|
|
Marketing, general and administrative |
|
|
16,787 |
|
|
|
16,520 |
|
|
|
15,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,334 |
|
|
|
32,550 |
|
|
|
31,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
|
|
48,960 |
|
|
|
40,178 |
|
|
|
24,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE, NET |
|
|
(3,272 |
) |
|
|
(2,997 |
) |
|
|
(3,567 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER NON CASH FINANCING EXPENSE,
NET |
|
|
(2,210 |
) |
|
|
(7,528 |
) |
(a) |
|
(5,312 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN FROM ACQUISITION,
NET |
|
|
-- |
|
|
|
10,158 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE), NET |
|
|
5,081 |
|
|
|
4,362 |
|
|
|
(247 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE INCOME TAX |
|
|
48,559 |
|
|
|
44,173 |
|
|
|
14,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE) |
|
|
3,459 |
|
|
|
(3,826 |
) |
|
|
(927 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE NON CONTROLLING
INTEREST |
|
|
52,018 |
|
|
|
40,347 |
|
|
|
14,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON
CONTROLLING INTEREST |
|
|
(805 |
) |
|
|
(1,861 |
) |
|
|
(451 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET PROFIT |
|
$ |
|
51,213 |
|
$ |
|
38,486 |
|
$ |
|
13,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS PER ORDINARY SHARE |
$ |
|
0.58 |
|
$ |
|
0.45 |
|
$ |
|
0.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares
outstanding |
|
|
87,821 |
|
|
|
86,300 |
|
|
|
77,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER ORDINARY SHARE |
$ |
|
0.52 |
|
$ |
|
0.40 |
|
$ |
|
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit used for diluted earnings per
share |
$ |
|
53,318 |
|
$ |
|
40,556 |
|
$ |
|
13,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares outstanding
- |
|
|
|
|
|
|
|
|
|
used for diluted earnings per share |
|
|
101,805 |
|
|
|
100,163 |
|
|
|
86,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Included $6,653 relating to the Israeli banks loans
early repayment which has been completed in the three months ended
June 30, 2016. |
|
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
UNAUDITED RECONCILIATION OF CERTAIN FINANCIAL
DATA |
|
(dollars and share count in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T h r e e
m o n t h s e n d e
d |
|
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION FROM GAAP NET PROFIT TO ADJUSTED NET
PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP NET PROFIT |
|
$ |
|
51,213 |
|
$ |
|
38,486 |
|
$ |
13,551 |
|
|
|
Stock based
compensation |
|
|
|
2,337 |
|
|
|
2,532 |
|
|
2,312 |
|
|
|
Amortization of acquired intangible
assets |
|
|
|
2,367 |
|
|
|
2,395 |
|
|
1,982 |
|
|
|
Financing expenses, net associated with Bonds Series F
accelerated conversion |
|
|
-- |
|
|
|
-- |
|
|
696 |
|
|
|
Non cash financing expense related to bank loan early
repayment (1) |
|
|
|
-- |
|
|
|
6,653 |
|
|
-- |
|
|
|
Gain from acquisition, net |
|
|
|
-- |
|
|
|
(10,158 |
) |
|
-- |
|
|
|
Income tax benefit, see (2) below |
|
|
|
(6,472 |
) |
|
|
-- |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET PROFIT |
|
$ |
|
49,445 |
|
$ |
|
39,908 |
|
$ |
18,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET PROFIT PER SHARE |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
0.56 |
|
$ |
|
0.46 |
|
$ |
0.24 |
|
|
|
Diluted |
|
$ |
|
0.51 |
|
$ |
|
0.42 |
|
$ |
0.21 |
|
|
|
Fully diluted, see (3) below |
|
$ |
|
0.48 |
|
$ |
|
0.39 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET PROFIT USED TO CALCULATE PER SHARE
DATA: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
|
49,445 |
|
$ |
|
39,908 |
|
$ |
18,541 |
|
|
|
Diluted |
|
|
$ |
|
51,550 |
|
$ |
|
41,978 |
|
$ |
18,541 |
|
|
|
Fully diluted |
|
$ |
|
51,550 |
|
$ |
|
41,978 |
|
$ |
23,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares and other securities used for the above
calculation: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
87,821 |
|
|
|
86,300 |
|
|
77,370 |
|
|
|
Diluted |
|
|
|
|
101,805 |
|
|
|
100,163 |
|
|
86,837 |
|
|
|
Fully diluted, see (3) below |
|
|
|
107,147 |
|
|
|
107,056 |
|
|
103,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA CALCULATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP OPERATING PROFIT |
|
$ |
|
48,960 |
|
$ |
|
40,178 |
|
$ |
24,055 |
|
|
|
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation of fixed
assets |
|
|
|
43,110 |
|
|
|
41,910 |
|
|
34,518 |
|
|
|
|
Stock based compensation |
|
|
|
936 |
|
|
|
1,160 |
|
|
732 |
|
|
|
|
Amortization of acquired intangible
assets |
|
|
|
2,180 |
|
|
|
2,207 |
|
|
1,794 |
|
|
|
Research and development: |
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
|
501 |
|
|
|
533 |
|
|
598 |
|
|
|
Marketing, general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation |
|
|
|
900 |
|
|
|
839 |
|
|
982 |
|
|
|
|
Amortization of acquired intangible
assets |
|
|
|
187 |
|
|
|
188 |
|
|
188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
|
$ |
|
96,774 |
|
$ |
|
87,015 |
|
$ |
62,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
In accordance with US GAAP ASC 825-10. |
|
|
(2 |
) |
Tax
impact in relation to TJP legal entity closure occurred in the
three months ended September 30, 2016, following Nishiwaki Fab
cessation of operation announced in 2014. |
|
|
(3 |
) |
Fully diluted share count includes all issued and
outstanding securities; Outstanding ordinary share count as of
September 30, 2016 was 90,307. |
|
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) |
|
|
(dollars and share count in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES |
|
|
$ |
|
909,255 |
|
$ |
|
705,959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES |
|
|
|
693,886 |
|
|
|
565,124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
215,369 |
|
|
|
140,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
46,814 |
|
|
|
45,965 |
|
|
|
|
|
Marketing, general and administrative |
|
|
49,230 |
|
|
|
47,315 |
|
|
|
|
|
Nishiwaki Fab restructuring costs and impairment,
net |
|
|
(627 |
) |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,417 |
|
|
|
93,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT |
|
|
119,952 |
|
|
|
47,555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE, NET |
|
|
(9,627 |
) |
|
|
(10,813 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER NON CASH FINANCING EXPENSE, NET |
|
|
(13,707 |
) |
|
|
(97,179 |
) |
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIN FROM ACQUISITION,
NET |
|
|
51,298 |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE), NET |
|
|
9,443 |
|
|
|
(260 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT (LOSS) BEFORE INCOME TAX |
|
|
157,359 |
|
|
|
(60,697 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX BENEFIT (EXPENSE) |
|
|
(446 |
) |
|
|
7,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT (LOSS) BEFORE NON CONTROLLING
INTEREST |
|
|
156,913 |
|
|
|
(53,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON
CONTROLLING INTEREST |
|
|
(1,270 |
) |
|
|
1,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET PROFIT (LOSS) |
$ |
|
155,643 |
|
$ |
|
(51,726 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS (LOSS) PER ORDINARY SHARE |
$ |
|
1.81 |
|
$ |
|
(0.71 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares
outstanding |
|
|
86,220 |
|
|
|
72,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Included $73,817 associated with Bonds Series F
accelerated conversion occurred in the nine months ended September
30, 2015 in accordance with US GAAP ASC 470-20. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
CONSOLIDATED SOURCES AND USES REPORT
(UNAUDITED) |
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T h r e e
m o n t h s e n d e
d |
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short term deposits - beginning of
period |
$ |
|
311,062 |
|
$ |
|
244,577 |
|
$ |
|
142,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from
operations |
|
|
86,410 |
|
|
|
81,781 |
|
|
|
50,822 |
|
|
|
|
|
|
|
Investments in property and
equipment, net |
|
|
(54,947 |
) |
|
|
(54,323 |
) |
|
|
(40,626 |
) |
|
|
|
|
|
|
Exercise of warrants and
options, net |
|
|
21,918 |
|
|
|
360 |
|
|
|
4,602 |
|
|
|
|
|
|
|
Debt received (repaid),
net |
|
|
8,554 |
|
|
|
27,444 |
|
|
|
(3,000 |
) |
|
|
|
|
|
|
Effect of Japanese Yen
exchange rate change and others |
|
|
2,336 |
|
|
|
11,223 |
|
|
|
1,047 |
|
|
|
|
|
|
|
Long term
deposit |
|
|
(12,500 |
) |
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short term deposits - end of period |
$ |
|
362,833 |
|
$ |
|
311,062 |
|
$ |
|
155,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short term deposits - beginning of
period |
$ |
|
205,575 |
|
$ |
|
187,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from
operations |
|
|
245,633 |
|
|
|
142,033 |
|
|
|
|
|
|
|
|
|
Investments in property and
equipment, net |
|
|
(166,803 |
) |
|
|
(107,198 |
) |
|
|
|
|
|
|
|
|
Exercise of warrants and
options, net |
|
|
28,159 |
|
|
|
10,256 |
|
|
|
|
|
|
|
|
|
Debt received (repaid),
net |
|
|
42,744 |
|
|
|
(51,683 |
) |
|
|
|
|
|
|
|
|
Nishiwaki's employees
retirement related payments |
|
|
-- |
|
|
|
(24,907 |
) |
|
|
|
|
|
|
|
|
Effect of Japanese Yen
exchange rate change and others |
|
|
22,588 |
|
|
|
(320 |
) |
|
|
|
|
|
|
|
|
TPSCo dividend to
Panasonic |
|
|
(2,563 |
) |
|
|
-- |
|
|
|
|
|
|
|
|
|
Long term
deposit |
|
|
(12,500 |
) |
|
|
-- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and short term deposits - end of period |
$ |
|
362,833 |
|
$ |
|
155,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOWER SEMICONDUCTOR LTD. AND
SUBSIDIARIES |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED) |
|
|
|
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS - OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period |
|
$ |
|
52,018 |
|
$ |
|
40,347 |
|
$ |
|
14,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
49,194 |
|
|
|
48,117 |
|
|
|
41,754 |
|
|
|
|
|
Effect of indexation, translation and fair value
measurement on debt |
|
|
2,808 |
|
|
|
6,700 |
|
|
|
918 |
|
|
|
|
|
Other expense (income) , net |
|
|
(5,081 |
) |
|
|
(4,362 |
) |
|
|
247 |
|
|
|
|
|
Gain from acquisition |
|
|
-- |
|
|
|
(10,158 |
) |
|
|
-- |
|
|
|
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Trade accounts receivable |
|
|
(1,469 |
) |
|
|
(1,916 |
) |
|
|
(7,325 |
) |
|
|
|
|
Other receivables and other current
assets |
|
|
4,328 |
|
|
|
(5,476 |
) |
|
|
(5,549 |
) |
|
|
|
|
Inventories |
|
|
(6,245 |
) |
|
|
(6,300 |
) |
|
|
(12,151 |
) |
|
|
|
|
Trade accounts payable |
|
|
2,624 |
|
|
|
130 |
|
|
|
(508 |
) |
|
|
|
|
Deferred revenue and customers'
advances |
|
|
(5,377 |
) |
|
|
8,294 |
|
|
|
18,144 |
|
|
|
|
|
Other current liabilities |
|
|
(6,938 |
) |
|
|
11,194 |
|
|
|
1,597 |
|
|
|
|
|
Deferred tax liability,
net |
|
|
548 |
|
|
|
(4,789 |
) |
|
|
(307 |
) |
|
|
|
|
|
Net cash provided by operating activities |
|
|
86,410 |
|
|
|
81,781 |
|
|
|
50,822 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS - INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in property and equipment,
net |
|
|
(54,947 |
) |
|
|
(54,323 |
) |
|
|
(40,626 |
) |
|
|
Decrease (increase) in deposits and other investments,
net |
|
|
(12,500 |
) |
|
|
19,600 |
|
|
|
-- |
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(67,447 |
) |
|
|
(34,723 |
) |
|
|
(40,626 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS - FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt received, net of loans repayment |
|
|
8,554 |
|
|
|
27,444 |
|
|
|
(3,000 |
) |
|
|
Exercise of warrants and options, net |
|
|
21,918 |
|
|
|
360 |
|
|
|
4,602 |
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
30,472 |
|
|
|
27,804 |
|
|
|
1,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE
CHANGE |
|
|
2,336 |
|
|
|
11,623 |
|
|
|
1,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCREASE IN CASH AND CASH
EQUIVALENTS |
|
|
51,771 |
|
|
|
86,485 |
|
|
|
12,845 |
|
|
CASH AND CASH EQUIVALENTS - BEGINNING
OF PERIOD |
|
|
311,062 |
|
|
|
224,577 |
|
|
|
142,503 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS - END OF PERIOD |
$ |
|
362,833 |
|
$ |
|
311,062 |
|
$ |
|
155,348 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tower Semiconductor (NASDAQ:TSEM)
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From Mar 2024 to Apr 2024
Tower Semiconductor (NASDAQ:TSEM)
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From Apr 2023 to Apr 2024