TowerJazz Reports Full Year 2018 Results: Revenue of $1.3 Billion, Cash from Operations of $313 Million, Resulting in Net Profit of $136 million and EPS of $1.35

MIGDAL HAEMEK, Israel, Feb. 19, 2019 (GLOBE NEWSWIRE) -- TowerJazz (NASDAQ: TSEM & TASE: TSEM) reported today its results for the full year and for the fourth quarter ended December 31, 2018.

Highlights of the Full Year 2018:

  • Revenues of $1.3 billion resulting in EBITDA of $362 million, net profit of $136 million and basic earnings per share of $1.35;
  • Cash generated from operations of $313 million with $170 million investments in property and equipment, resulting in free cash flow of $143 million;
  • Further strengthened the balance sheet and financial position during the year:
    • Record shareholders’ equity reaching $1.2 billion;
    • Received upgraded S&P rating from “ilA+ stable” to “ilAA- stable”.

Highlights of the Fourth Quarter of 2018:

  • Revenues of $334 million, up $11 million as compared with the third quarter of 2018;
  • Sequential increase in net profit and basic earnings per share to $38 million and $0.37, respectively, from $34 million and $0.34, respectively;
  • Cash generated from operations of $91 million with $49 million invested in property and equipment, resulting in free cash flow of $43 million.

Business Outlook
TowerJazz expects revenues for the first quarter of 2019 to be $310 million, with an upward or downward range of 5%.

Mr. Russell Ellwanger, Chief Executive Officer of TowerJazz, commented, “We are pleased with our fourth quarter sequential revenue and margins’ growth, in the face of multiple recent market financial releases citing near-term macroeconomic concerns, resulting in a semiconductor market that is tightly controlling inventories. We enter 2019 with certain geo-economic headwinds but remain confident in our value creation thesis. In each of our focused areas, we have had recent strong customer wins, namely advanced infrastructure, 5G enabling switches, breakthrough power management efficiency, and unrivaled industrial and medical image sensors figure-of-merit. These market segments are strategic and solid mid- to long-term growth drivers. The powerful aforementioned parallel activities of our different business units, driven by worldwide impassioned human capability, and strengthened by our growing financial resources, will undoubtedly create notable milestones throughout the year.”

Ellwanger updated: “We continue to progress with our TPSCo partnership, aligned on a first contract extension of 3 years for the next phase of TPSCo, beginning the second quarter of 2019. We expect similar loading as present run rate, with some changes to the pricing tables, resulting in some revenue reduction from our partner. This is expected to be mitigated by core business revenue growth, mainly 300mm which is presently ramping, strong efficiencies, and TPSCo specific cost reduction activities, enabling margins’ growth.”

Full Year Results Overview
Revenues for 2018 were $1.3 billion compared to $1.39 billion in 2017. Gross and operating profits for 2018 were $293 million and $155 million, respectively, as compared to $354 million and $220 million, respectively, in 2017. EBITDA for 2018 was $362 million, representing 28% EBITDA margin.

Net profit for 2018 was $136 million, representing $1.35 basic earnings per share and $1.32 diluted earnings per share, as compared to $298 million net profit, or $3.08 basic earnings per share and $2.90 diluted earnings per share in 2017. Net profit for 2017 included $82 million income tax benefit resulted from Israeli deferred tax asset realization following valuation allowance release and $13 million income tax benefit related to U.S. tax reform.

During 2018, debt was reduced by $98 million, resulting in an annual financing expenses savings of $7 million, and included:

  • Full conversion of short-term notes in the amount of $58 million to shares, $39 million of which were converted during the fourth quarter of 2018.
    The notes conversion resulted in annual cash savings of $5 million.
    Post conversion, the current outstanding share count is 105 million and fully diluted share count remains at 108 million, similar to previous quarters;
  • In July 2018, the Company early repaid $40 million loan, initially borrowed in 2016 in relation to the acquisition of the San Antonio fab and its ramp.
  • In June 2018, TPSCo restructured its outstanding loans originally due 2018-2020, by early repayment of these loans and obtaining a new approximately $100 million loan from three leading Japanese banks at improved terms and longer duration through June 2025.

Free cash flow for 2018 was $143 million, with $313 million cash from operations, net of $170 million investments in fixed assets, net. The other main cash activities during 2018 were: $158 million investment in short-term deposits, marketable securities and other investments (mainly interest-bearing bank deposits) and $49 million of debt repaid, net of debt received, which included mainly the early repayment of the $40 million loan borrowed in 2016 in relation to the acquisition of the San Antonio fab and its ramp.   

Record shareholders' equity as of December 31, 2018 was $1.24 billion, as compared to $1.03 billion as of December 31, 2017.

In April 2018, the Company and its series G bonds received an upgraded rating from Ma’alot (an Israeli rating company which is fully owned by S&P Global Ratings). Its previous rating was ilA+ with a stable horizon and the new upgraded rating is ilAA-, with a stable horizon.

Fourth Quarter Results Overview
Revenues for the fourth quarter of 2018 were $334 million, $11 million higher than in the prior quarter and compared to $358 million in the fourth quarter of 2017.

Gross and operating profits for the fourth quarter of 2018 were $76 million and $40 million, respectively, as compared to $73 million and $39 million, respectively, in the third quarter of 2018 and as compared to $89 million and $54 million, respectively, in the fourth quarter of 2017.

EBITDA for the fourth quarter of 2018 was $93 million, representing a 28% EBITDA margin, compared with $89 million in the prior quarter and $107 million for the fourth quarter of 2017.

Net profit for the fourth quarter of 2018 was $38 million, or $0.37 basic earnings per share, as compared to net profit of $34 million or $0.34 basic earnings per share in the third quarter of 2018 and $147 million, or $1.50 basic earnings per share in the fourth quarter of 2017. Net profit for the fourth quarter of 2017 included $82 million income tax benefit resulted from Israeli deferred tax asset realization following valuation allowance release and $13 million income tax benefit related to U.S. tax reform.

Free cash flow for the fourth quarter of 2018 was $43 million, with $91 million cash flow from operations and $49 million investments in fixed assets, net. During the fourth quarter of 2018, $123 million were invested in deposits, marketable securities and other investments, net (mainly interest-bearing bank deposits).   

Teleconference and Webcast
TowerJazz will host an investor conference call today, Tuesday, February 19, 2019, 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 fourth quarter and full year 2018 and its outlook.

This call will be webcast and can be accessed via TowerJazz’s website at www.towerjazz.com , or by calling 1-888-668-9141 (U.S. Toll-Free), 03-918-0609 (Israel), +972-3-918-0609 (International).  For those who are not available to listen to the live broadcast, the call will be archived on TowerJazz’s website for 90 days.

The Company presents its financial statements in accordance with U.S. GAAP.  The financial information included in the tables below includes unaudited condensed financial data. Some of the financial information in this release, which we describe in this release as “adjusted” financial measures, is 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) income tax benefit resulted from Israeli deferred tax asset realization following valuation allowance release; and (4) income tax benefit related to U.S. tax reform. 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 a reconciliation between the adjusted financial measures and the comparable GAAP financial measures. As used and/ or presented in this release, as well as calculated in the tables herein, the term Earnings Before Interest Tax Depreciation and Amortization (EBITDA) consists of net profit in accordance with GAAP, excluding financing and other expense, net, taxes, non-controlling interest, depreciation and amortization expense and stock-based compensation expense. 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. The term Net Cash, as used and/ or presented in this release, is comprised of cash, cash equivalents, short-term deposits and marketable securities (in the amounts of $641 million and $560 million as of December 31, 2018 and December 31, 2017, respectively) less the outstanding principal amount of bank loans (in the amounts of $100 million and $138 million as of December 31, 2018 and December 31, 2017, respectively), the outstanding principal amount of capital leases (in the amounts of $47 million and $16 million as of December 31, 2018 and December 31, 2017, respectively) and the outstanding principal amount of debentures (in the amount of $122 million and $180 million as of December 31, 2018 and December 31, 2017, respectively). The term Net Cash is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for cash, debt, 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. In addition, the term Free Cash Flow, as used and/ or presented in this release, is calculated to be cash from operating activities (in the amounts of $91 million and $85 million for the three months periods ended December 31, 2018 and December 31, 2017, respectively and in the amounts of $313 million and $356 million for the years ended December 31, 2018 and December 31, 2017, respectively) less cash for investments in property and equipment, net (in the amounts of $49 million and $41 million for the three months periods ended December 31, 2018 and December 31, 2017, respectively and in the amounts of $170 million and $165 million for the years ended December 31, 2018 and December 31, 2017, respectively). The term Free Cash Flow is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and 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.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8  Next Page »



Review Article Be the first to review this article
Aldec


Jobs
Senior Account Managers… FORMAL VERIFICATION...VALLEY for EDA Careers at San Jose, California
Sr. Application Engineer for Mentor Graphics at Fremont, California
Senior Software Engineer for EDA Careers at San Jose, California
Salesforce Technical Lead   East Coast  for EDA Careers at Cherry Hill, New Jersey
Hardware Engineer, Board Design for Arista Networks at Santa Clara, California
Upcoming Events
DVCon U.S. 2020 at DoubleTree Hotel San Jose CA - Mar 2 - 5, 2020
OFC 2020 - The Optical Networking and Communication Conference & Exhibition at San Diego Convention Center San Diego CA - Mar 8 - 12, 2020
DATE '2020 at ALPEXPO Grenoble France - Mar 9 - 13, 2020
NVIDIA’s GPU Technology Conference (GTC) at San Jose McEnery Convention Center 150 West San Carlos Street San Jose CA - Mar 22 - 26, 2020
DownStream: Solutions for Post Processing PCB Designs
Verific: SystemVerilog & VHDL Parsers



© 2020 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise