MIGDAL HAEMEK, Israel, May 07, 2018 (GLOBE NEWSWIRE) -- TowerJazz (NASDAQ:TSEM) (TASE:TSEM) reported today its financial results for the first quarter ended March 31, 2018.
- Revenues of $313 million resulted in EBITDA of $84 million and net profit of $26 million;
- Cash from operations of $75 million and free cash flow of $35 million;
- Record net cash of $247 million;
- Record Shareholders equity of $1.07 billion;
- Received upgraded S&P rating from “ilA+ stable” to “ilAA- stable”;
- Forecast second quarter revenue growth of 7% sequentially, with a mid-range guidance of $335 million.
TowerJazz expects revenues for the second quarter of 2018 ending June 30, 2018 to be $335 million, with an upward or downward range of 5%, representing a sequential growth of 7%.
Mr. Russell Ellwanger, Chief Executive Officer of TowerJazz, commented, “This past quarter we formally began projects and/ or were informed of wins for several varied industry defining projects with respective customer market leaders. The quarter, as forecasted, was impacted by seasonality and some activities, moving our offering to higher value richer mixes. Present customer forecasts show continued quarter over quarter growth throughout 2018, with a fourth quarter demonstrating over 25% organic business unit growth against the first quarter, and with commensurate bottom line achievements.”
First Quarter 2018 Results
Revenues for the first quarter of 2018 were $313 million, seasonally down, reflecting a 5% decrease as compared to $330 million in the first quarter of 2017.
Gross and operating profits for the first quarter of 2018 were $66 million and $32 million, respectively, as compared to $89 million and $54 million, respectively, in the fourth quarter of 2017, and as compared to $85 million and $53 million, respectively, in the first quarter of 2017. This represents quarter over quarter gross and operating margins decrease of 4 and 5 percentage points, respectively, and year over year decrease of 5 and 6 percentage points, respectively.
EBITDA for the first quarter of 2018 was $84 million, as compared to $101 million, in the first quarter of 2017.
Net profit for the first quarter of 2018 was $26 million, or $0.26 diluted earnings per share, as compared to $46 million, or $0.45 diluted earnings per share in the first quarter of 2017.
Free cash flow for the quarter was $35 million, with $75 million cash flow from operations and $40 million investments in fixed assets, net. The other main cash activities during the first quarter of 2018 were: $15 million investment in marketable securities and other investments; $7 million loan repayment and a positive $5 million item due to the effect of the Japanese Yen exchange rate on the cash balance.
Cash (including marketable securities), net of gross debt, as of March 31, 2018, totaled to a record of $247 million as compared to net cash of $226 million as of December 31, 2017.
Shareholders' equity as of March 31, 2018 was a record of $1.07 billion, as compared to $1.03 billion as of December 31, 2017.
On April 30, 2018, the Company received an upgraded rating from Standard & Poor’s 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”.
Teleconference and Webcast
TowerJazz will host an investor conference call today, May 7, 2018, 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 first quarter 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) non-recurring items related to long-term investments, (4) income tax benefit resulted from Israeli deferred tax asset realization following valuation allowance release; and (5) 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 interest and other financing expense, net, other income, 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 $590 million and $560 million as of March 31, 2018 and December 31, 2017, respectively) less the outstanding principal amount of bank loans (in the amounts of $138 million as of March 31, 2018 and December 31, 2017), the outstanding principal amount of capital leases (in the amounts of $25 million and $16 million as of March 31, 2018 and December 31, 2017) and the outstanding principal amount of debentures (in the amount of $180 million as of March 31, 2018 and December 31, 2017). 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 $75 million, $85 million and $82 million for the three months periods ended March 31, 2018, December 31, 2017 and March 31, 2017, respectively) less cash for investments in property and equipment, net (in the amounts of $40 million, $41 million and $40 million for the three months periods ended March 31, 2018, December 31, 2017 and March 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.
Tower Semiconductor Ltd. (NASDAQ:TSEM) (TASE:TSEM) and its subsidiaries operate collectively under the brand name TowerJazz, the global specialty foundry leader. TowerJazz manufactures next-generation integrated circuits (ICs) in growing markets such as consumer, industrial, automotive, medical and aerospace and defense. TowerJazz’s advanced technology is comprised of a broad range of customizable process platforms such as: SiGe, BiCMOS, mixed-signal/CMOS, RF CMOS, CMOS image sensor, integrated power management (BCD and 700V), and MEMS. TowerJazz also provides world-class design enablement 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 facilities in Japan (two 200mm and one 300mm). For more information, please visit www.towerjazz.com .