Third Quarter Revenue Guidance Calls for 24 Percent Sequential Growth and 28 Percent Year-over-Year Growth MIGDAL HAEMEK, Israel – August 12, 2009 –
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), an independent specialty foundry, today announced financial results for the second quarter ended June 30, 2009.
• Achieved revenue of $60.6 million
• Posted positive cash flow from operations for the eleventh consecutive quarter and positive EBITDA for the fifteenth consecutive quarter
• Significant cost efficiencies across the board have enabled the Company to achieve improved non-GAAP gross, operating and net margins
• Expects strong growth in third quarter revenues in the range of $73 - $77 million, representing revenue growth of 24 percent sequentially, substantially higher than industry weighted average, and 28 percent year-over-year
Second quarter 2009 revenue was $60.6 million, towards the upper-end of the Company’s previously provided guidance range. This represents a 4 percent increase over first quarter 2009 revenue of $58.1 million.
Calculated in accordance with GAAP, net loss for the second quarter was $30.9 million or $0.19 per share, an improvement from $0.25 per share for the second quarter of 2008. Net loss for the first half of 2009 narrowed by $2.1 million as compared to the corresponding period in 2008.
On a non-GAAP basis, as described and reconciled below, second quarter 2009 gross profit was $15.7 million, a sequential growth of 30 percent, representing a 26 percent gross margin as compared to 21 percent in the first quarter of 2009. Non-GAAP operating profit grew sequentially by 158 percent to $3.5 million, and Non-GAAP net profit for the second quarter of 2009 improved to $5.4 million, representing 9 percent net margin.
“During the second quarter we had many achievements, including a record 83 new design wins and new collaborations, with more underway, which demonstrate the value we add to our customers with our highly advanced specialty wafer processes, designer-centric models and kits, and the realization of the successful merger with Jazz Technologies. This combination of unparalleled design enablement capabilities and the breadth and great depth of customizable CMOS specialty technologies reinforces our position as a leading global specialty foundry,” commented Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, Ltd. “Due to our manufacturing mix moving to more specialized products and flows, we realized a year over year average selling prices increase of approximately 35 percent."
Ellwanger further commented, “I am very confident with regard to the coming quarters. The significant effort we have put in during the past few quarters, including enhancing cost efficiencies and realizing technological synergies, has placed us in an incredible position. It has allowed us to structure ourselves for enhanced growth and enter the second half of 2009 in excellent standing, which we will discuss in detail in our conference call later today. As I look at Tower’s position entering an upcycle, I am extremely optimistic and see Tower as most probably the single foundry that will exit 2009 with year over year growth.”
“I’m proud of the achievements of Tower’s executive team, including the quick, complete and beneficial integration of the Jazz Technologies merger, as evidenced by the increased shareholder value over the last few quarters,” said Amir Elstein, Chairman of Tower’s Board of Directors. “We are boldly emerging from the recent global downturn as a stronger, more efficient and leaner company, with a platform primed for long-term and profitable growth.”
Tower forecasts revenue in the third quarter 2009 to range between $73 and $77 million, representing a midrange sequential revenue growth of 24 percent and a 28 percent year over year revenue growth.
Tower also announced that it has signed a definitive agreement with YA Global Master SPV Ltd. a fund managed by Yorkville Advisors ("Yorkville"), according to which Yorkville has committed to invest in Tower up to $25 million over the next 24 months by way of a standby equity-line, in consideration for ordinary shares of Tower to be issued at a 3 percent discount to the market price of the ordinary shares, as set forth in the agreement. To date, no draw downs have been made under this agreement. No warrants or any other debt or derivative instruments are issuable by Tower under this agreement. Commencement of draw downs under the standby equity line is subject to our obtaining certain regulatory approvals and approval from the Tel-Aviv Stock Exchange. Additional information regarding the agreement is included in the Company’s Report on Form 6-K and prospectus supplement as filed today with the SEC and available at www.sec.gov.
Conference Call/ Web Cast Announcement
Tower will host a conference call to discuss second quarter 2009 results today, August 12, 2009, at 10:00 a.m. Eastern Time (ET) / 5:00 p.m. Israel time. To participate, please call: 1-888-407-2553 (U.S. toll-free number) or 972-3-918-0644 (international) and mention ID code: TOWER. Callers in Israel are invited to call locally by dialing 03-918-0644. The conference call will also be Web cast live at http://www.earnings.com and will be available thereafter on both Web sites for replay for 90 days, starting at approximately 2:00 p.m. ET on the day of the call.
About Tower Semiconductor, Ltd.
Tower Semiconductor Ltd. (NASDAQ: TSEM, TASE: TSEM), a global specialty foundry leader, manufactures integrated circuits with geometries ranging from 1.0 to 0.13-micron and provides complementary technical services and design support. Tower, along with its fully owned U.S. subsidiary, Jazz Semiconductor, Inc., offers a broad range of process technologies including Digital, Mixed-Signal and RFCMOS, HV CMOS, Power Management, Non-Volatile Memory (NVM), Embedded NVM, MEMS, and CMOS Image Sensors. Tower provides world-class customer service and maintains two fabrication facilities in Israel and a fab in Newport Beach, CA, with manufacturing capacity available in China through partnerships with ASMC and HHNEC. For more information, please visit www.towersemi.com and www.jazzsemi.com.