Company Records Positive Cash Flow from Operations and Positive EBITDA and Achieves Eighth Consecutive Quarterly Revenue Growth
MIGDAL HAEMEK, Israel – August 15, 2007 – Tower Semiconductor Ltd. (Nasdaq: TSEM, TASE: TSEM), an independent specialty foundry, today announced second quarter 2007 financial results.
- Achieved record quarterly revenues of $57.1 million representing the eighth consecutive quarter of revenue growth, representing year-over-year growth of approximately 28 percent
- Achieved positive cash flow from operations for the third consecutive quarter and positive EBITDA for the seventh consecutive quarter
- Achieved 40 percent revenue growth in the first half of 2007, compared to the same period for 2006
- Plans to Further expand Fab2 capacity at a low cost model, to be funded by the previously announced long-term bonds financing and by credit lines from banks & Israel Corporation.
For the second quarter of 2007, the Company reported total revenues of $57.1 million, representing a 28 percent increase as compared to revenues of $44.6 million reported in the second quarter of 2006. For the first half of 2007, the Company reported total revenues of $112.7 million, representing a 40 percent increase when compared to revenues of $80.4 million reported in the first half of 2006. Net loss in accordance with Generally Accepted Accounting Principles (GAAP) for the second quarter of 2007 has improved by $9.2 million to $34.4 million, or $0.28 per share, as compared to a GAAP net loss of $43.6 million, or $0.55 per share, for the second quarter of 2006. Non-GAAP gross profit (as described and reconciled below) for the second quarter of 2007 was $19.2 million, representing a gross margin of 34 percent. Non-GAAP operating profit (as described and reconciled below) for the second quarter of 2007 was $11.5 million, representing a 20 percent operating margin.
"The second quarter 2007 marked the two year anniversary of Tower's new management team”, Said Russell Ellwanger, chief executive officer of Tower Semiconductor. “The ensuing 8 quarters demonstrated sequential Sales growth, resulting in a 3x sales increase and a $25 million positive shift in cash flow from operations as compared to two years ago quarterly run rate. We have continued to run at very high utilization levels in Fab 2, and even with the capacity ramp reaching 24,000 wafer starts per month in the third quarter of 2007, we will need to increase the capacity further to fully meet the current as well as longer term forecasted customer demand. To this end, we have raised moneys in, predominantly, non share diluting, long term debt vehicles, to enable the next phase of fab 2 capacity ramp targeting acquisition of low cost, short period of return tool sets. We have experienced a recent decrease in the Fab 1 utilization rates, which we expect will be corrected in the second half of Q4 and will remain high throughout 2008, as a function of multiple new projects with several very large customers. We see our overall business strong and target continued sequential growth."
Tower forecasts revenue in the third quarter 2007 to be between $56 and $60 million, which will represent between 9 and 17 percent year-over-year revenue growth.
Second Quarter 2007 Financial Results Conference Call and Web Cast
Tower will host a conference call to discuss these results on Wednesday, August 15, 2007, at 10 a.m. Eastern Standard Time / 5 p.m. Israel time. To participate, please call: 1-888-668-9141 (U.S. toll-free number) or 972-3-918-0687 (international) and mention ID code: TOWER. Callers in Israel are invited to call locally by dialing 03-918-0687. The conference call will also be Web cast live at http://www.earnings.com and at www.towersemi.com and will be available thereafter on both Web sites for replay for 90 days, starting at approximately 2 p.m. Eastern Standard Time on the day of the call. Financial tables
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About Tower Semiconductor Ltd.
Tower Semiconductor Ltd. (Nasdaq: TSEM, TASE: TSEM) is an independent specialty foundry that delivers customized solutions in a variety of advanced CMOS technologies, including digital CMOS, mixed-signal and RF (radio frequency) CMOS, CMOS image sensors, power management devices, and embedded non-volatile memory solutions. Tower’s customer orientation is complemented by its uncompromising attention to quality and service. Its specialized processes and engineering expertise provides highly flexible, customized manufacturing solutions to fulfill the increasing variety of customer needs worldwide. Offering two world-class manufacturing facilities with standard and specialized process technologies ranging from 1.0- to 0.13-micron, Tower Semiconductor provides exceptional design support and technical services to help customers sustain long-term, reliable product performance, while delivering on-time and on-budget results. More information can be found at http://www.towersemi.com.