MIGDAL HAEMEK, Israel -- February 19, 2009 -- Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), an independent specialty foundry, today announced financial results for the fourth quarter and full year ended December 31, 2008.
- Record annual revenue of $251.7 million, representing year-over-year growth of 9 percent
- EBITDA of $36 million and positive annual cash flow from operations
- Strategic merger with Jazz Technologies in September
- Debt decreased by approximately $250 million, with favorably adjusted terms on the Company's remaining debt
Fourth Quarter Highlights
- Record revenue of $77.5 million, up 26 percent as compared to the fourth quarter of 2007
- Recorded positive cash flow from operations (ninth consecutive quarter) and positive EBITDA (thirteenth consecutive quarter)
- Jazz integration has been seamless, including cost reduction that has already exceeded the original $60 million annual run-rate plan, with additional activities under way.
Revenue for the fourth quarter of 2008 was $77.5 million, which was within Company's guidance range, and included the full quarter of results from Jazz Technologies following the close of the merger on September 19, 2008. This compares to revenue of $61.6 million in the fourth quarter of 2007 and $58.5 million in the third quarter of 2008. Calculated in accordance with GAAP, net loss for the fourth quarter of 2008 was $24.2 million, or $0.15 per share, which included approximately $29 million of depreciation and amortization.
Revenue for the full year 2008 was $251.7 million, representing an increase of 9 percent when compared to revenue of $230.9 million for the full year 2007. For the full year of 2008, non-GAAP gross and operating profit, as described and reconciled below, were $77.4 million and $36.1 million, respectively, which represent 31 percent gross margin and 14 percent operating margin. Calculated in accordance with GAAP, net loss for the year improved by $28 million, from $134 million to $106 million, which included $139 million of depreciation and amortization. Such high incremental net margin was achieved due to the previously announced cost reduction plans and lower financing expense.
"This past year was a very successful year for Tower on a number fronts. Our accomplishments and efforts throughout the year have dramatically improved the Company's financials and future growth opportunities as we work towards our goal of becoming the leading specialty foundry in the world," commented Russell Ellwanger, Chief Executive Officer of Tower Semiconductor Ltd. "Most notably, in September we completed the merger with Jazz Technologies, which has resulted in a larger, more competitive company with a broader global presence, double the worldwide customer base with the intrinsic cross-selling opportunities and substantial cost savings synergies."
Amir Elstein, chairman of the board of directors of Tower Semiconductor Ltd, stated, "The merger with Jazz and our now undisputed leadership in multiple foundry segments, as well as several not yet released initiatives, have put us in a position to capitalize on many opportunities presented during this global economic downturn and to exit 2009 as the definitive specialty foundry winner."
Commenting on the fourth quarter, Ellwanger stated, "During the fourth quarter worldwide foundry revenues declined significantly. The strategic Jazz merger was timely in that it allowed us to counter that trend and achieve sequential and year-over-year growth, which places us in a unique position when compared with other foundries that have reported to date. Looking forward, we see a continued weakening in customer demand for the first quarter and, based on our customer's current degree of visibility, for the second quarter as well. The cost synergies associated with the Jazz merger have positioned us to face the decline in revenue during the first half of 2009 in a successful manner, while also giving us the strength to capitalize on the various opportunities presented by the current economic conditions."
Fourth Quarter and Year End 2008 Financial Results Conference Call and Web Cast
Tower will host a conference call to discuss these results today, February 19, 2009, at 10:00 a.m. Eastern Time (ET) / 5:00 p.m. Israel time. To participate, please call: +1-866-345-5855 (U.S. toll-free number) or +972-3-918-0691 (international) and mention ID code: TOWER. Callers in Israel are invited to call locally by dialing 03-918-0691. The conference call will also be Web cast live at http://www.earnings.com and at http://www.towersemi.com and will be available thereafter on both Web sites for replay for 90 days, starting at approximately 2 p.m. ET on the day of the call.
Following the merger with Jazz, the amounts presented in this release, including the financial tables below for the fourth quarter and year of 2008 include Jazz's results commencing September 19, 2008. The balance sheet as of December 31, 2008 includes Jazz's balances as of such date.
About Tower Semiconductor Ltd.
Tower Semiconductor Ltd. is a pure-play independent specialty wafer foundry. Tower manufactures integrated circuits with geometries ranging from 1.0 to 0.13-micron; it also provides complementary technical services and design support. In addition to digital CMOS process technology, Tower offers advanced mixed-signal & RF-CMOS, Power Management, CMOS image-sensor and non-volatile memory technologies. Through access to the process portfolio of its wholly owned subsidiary, Jazz Semiconductor, Tower offers RF CMOS, Analog CMOS, Silicon and SiGe BiCMOS, SiGe C-BiCMOS, Power CMOS and High Voltage CMOS. To provide world-class customer service, Tower maintains two manufacturing facilities in Israel with access to Jazz Semiconductor's fab in the U.S. and manufacturing capacity in China through Jazz's partnerships with ASMC and HHNEC. For more information, please visit http://www.towersemi.com and http://www.jazzsemi.com.