TowerJazz Announces First Quarter 2019 Results: Revenues of $310 million, Cash from Operations of $75 million and Net Profit of $26 million

Noit Levy | TowerJazz | +972 4 604 7066 |
GK Investor Relations | Gavriel Frohwein, (646) 688 3559 |

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 (as of March 31, 2019 we are in compliance with all such covenants included in our banks’ agreements, bond G indenture and others); (x) pending litigation; (xi) new customer engagements, qualification and production ramp-up at our facilities; (xii) 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; (xiii) receipt of orders that are lower than the customer purchase commitments; (xiv) failure to receive orders currently expected; (xv) possible incurrence of additional indebtedness; (xvi) effect of global recession, unfavorable economic conditions and/or credit crisis; (xvii) our ability to accurately forecast financial performance, which is affected by limited order backlog and lengthy sales cycles; (xviii) possible situations of obsolete inventory if forecasted demand exceeds actual demand when we manufacture products before receipt of customer orders; (xix) the cyclical nature of the semiconductor industry and the resulting periodic overcapacity, fluctuations in operating results and future average selling price erosion; (xx) the execution of debt re-financing and/or fundraising to enable the service of our debt and/or other liabilities; (xxi) 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; (xxii) the purchase of equipment to increase capacity, the timely completion of the equipment installation, technology transfer and raising the funds therefor; (xxiii) the concentration of our business in the semiconductor industry; (xxiv) product returns; (xxv) 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; (xxvi) competing effectively; (xxvii) use of outsourced foundry services by both fabless semiconductor companies and integrated device manufacturers; (xxviii) achieving acceptable device yields, product performance and delivery times; (xxix) 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; (xxx) retention of key employees and recruitment and retention of skilled qualified personnel; (xxxi) 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; (xxxii) 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; (xxxiii) meeting regulatory requirements worldwide, including environmental and governmental regulations; (xxxiv) negotiation and closure of a definitive agreement in relation to fab establishment in China, as well as project implementation through required outside funding and resources and receipt of future proceeds therefrom; 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)


(dollars in thousands)
        March 31,  December 31,  March 31,
        2019  2018  2018
        (unaudited)    (unaudited)
A S S E T S       
    Cash and cash equivalents $ 408,098 $ 385,091 $ 464,661
    Short-term deposits     121,101   120,079     --  
    Marketable securities     144,023   135,850   125,105
    Trade accounts receivable   134,223   153,409   144,352
    Inventories     173,782   170,778   148,367
    Other current assets     22,084   22,752   19,175
      Total current assets     1,003,311   987,959   901,660
  LONG-TERM INVESTMENTS   36,117   35,945   28,798
  PROPERTY AND EQUIPMENT, NET   698,447   657,234   652,816
  INTANGIBLE ASSETS, NET   11,759   13,435   18,479
  GOODWILL     7,000   7,000   7,000
  DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET   89,357   88,404   110,771
      TOTAL ASSETS   $ 1,845,991 $ 1,789,977 $ 1,719,524
    Short-term debt   $ 43,148 $ 10,814 $ 114,763
    Trade accounts payable     109,536   104,329   116,496
    Deferred revenue and customers' advances   9,213   20,711   14,310
    Other current liabilities     60,512   67,867   64,011
      Total current liabilities     222,409   203,721   309,580
  LONG-TERM DEBT     265,397   256,669   229,013
  LONG-TERM CUSTOMERS' ADVANCES   28,939   28,131   31,224
      TOTAL LIABILITIES     578,805   553,772   651,769
      TOTAL SHAREHOLDERS' EQUITY   1,267,186   1,236,205   1,067,755
        TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,845,991 $ 1,789,977 $ 1,719,524

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