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TowerJazz Presents Fourth Quarter And Full Year 2012 Financial Results

Stocks in this article: TSEM

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, F-3, F-4, S-8 and 6-K, as were filed with the Securities and Exchange Commission (the “SEC”) and the Israel Securities Authority and Jazz’s most recent filings on Forms 10-K and 10-Q, as were filed with the SEC. 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.

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
 
    December 31,         December 31,
2012 2011
 

ASSETS

 
CURRENT ASSETS
Cash, short-term deposits and designated deposits $ 133,398 $ 101,149
Trade accounts receivable 79,354 75,350
Other receivables 5,379 5,000
Inventories 65,570 69,024
Other current assets   14,804   15,567
Total current assets   298,505   266,090
 
LONG-TERM INVESTMENTS   12,963   12,644
 
PROPERTY AND EQUIPMENT, NET   434,468   498,683
 
INTANGIBLE ASSETS, NET   47,936   58,737
 
GOODWILL   7,000   7,000
 
OTHER ASSETS, NET   13,768   14,067
 
TOTAL ASSETS $ 814,640 $ 857,221
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES
Short term debt $ 49,923 $ 48,255
Trade accounts payable 81,372 111,620
Deferred revenue 1,784 5,731
Other current liabilities   36,240   64,654
Total current liabilities 169,319 230,260
 
LONG-TERM DEBT 288,954 301,610
 
LONG-TERM CUSTOMERS' ADVANCES 7,407 7,941
 

EMPLOYEE RELATED LIABILITIES

77,963 97,927
 
DEFERRED TAX LIABILITY 26,804 20,428
 
OTHER LONG-TERM LIABILITIES   24,168   24,352
 
Total liabilities   594,615   682,518
 
SHAREHOLDERS' EQUITY (*)   220,025   174,703
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 814,640 $ 857,221
 
(*)   In accordance with ASC 470-20 (formerly EITF 98-5 and EITF 00-27), a Beneficial Conversion Feature (BCF) exists for bonds series F, which has been measured in accordance with such standards and classified during 2012 as a net increase of $109 thousands in shareholders’ equity with a correspondence decrease in the carrying value of the debentures presented as long term liabilities; said amount will be accreted through the remaining life of the debentures to the non-cash financing expenses.
 
 
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
 
        Three months ended
December 31,         December 31,
2012 2011
GAAP GAAP
(Unaudited)
 
REVENUES $ 147,587 $ 174,584
 
COST OF REVENUES   139,017     157,010  
 
GROSS PROFIT   8,570     17,574  
 
OPERATING COSTS AND EXPENSES
 
Research and development 7,332 7,279
Marketing, general and administrative   10,755     13,297  
 
  18,087     20,576  
 
OPERATING LOSS (9,517 ) (3,002 )
 
INTEREST EXPENSES, NET (8,647 ) (6,110 )
 
OTHER FINANCING EXPENSE, NET (7,614 ) (5,852 )
 
OTHER INCOME (EXPENSE), NET   78     (157 )
 
LOSS BEFORE INCOME TAX (25,700 ) (15,121 )
 
INCOME TAX BENEFIT (EXPENSE) 2,311 (1,580 )
   
LOSS FOR THE PERIOD $ (23,389 ) $ (16,701 )
 

Basic loss per ordinary share is $1.05 and $0.79 for the three months ended December 31, 2012 and December 31, 2011, respectively and the weighted average number of ordinary shares outstanding is 22,235 thousands and 21,217 thousands for these periods.

 
Loss per ordinary share includes the effect of the reverse stock split of one-for-fifteen effected on August 5, 2012.
 
 
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)
 
  Year ended     Year ended     Year ended
December 31,

December 31,

December 31,

2012     2011 2012       2011   2012     2011
non-GAAP Adjustments (see a, b, c, d, e, f, g below) GAAP
 
REVENUES

 

$

638,831

 

$

611,023

 

$

--

 

$

--

 

$

638,831

 

$

611,023

 
COST OF REVENUES   405,398     392,132     154,648   (a)   134,066   (a)   560,046     526,198  
 
GROSS PROFIT   233,433     218,891     (154,648 )   (134,066 )   78,785     84,825  
 
OPERATING COSTS AND EXPENSES
 
Research and development 29,075 22,862 2,018 (b) 2,024 (b) 31,093 24,886
Marketing, general and administrative 39,171 40,698 5,242 (c) 7,541 (c) 44,413 48,239
Acquisition related and reorganization costs   --     --     5,789   (d)   1,493   (d)   5,789     1,493  
 
  68,246     63,560     13,049     11,058     81,295     74,618  
 
OPERATING PROFIT (LOSS) 165,187 155,331 (167,697 ) (145,124 ) (2,510 ) 10,207
 
INTEREST EXPENSES, NET (31,808 ) (27,797 ) -- (e) -- (e) (31,808 ) (27,797 )
 
OTHER FINANCING EXPENSE, NET -- -- (27,583 ) (e) (12,505 ) (e) (27,583 ) (12,505 )
 

GAIN FROM ACQUISITION

-- -- -- 19,467 (d) -- 19,467
 
OTHER INCOME (EXPENSE), NET   (1,042 )   (598 )   --     14,058   (f)   (1,042 )   13,460  
 
PROFIT (LOSS) BEFORE INCOME TAX 132,337 126,936 (195,280 ) (124,104 ) (62,943 ) 2,832
 
INCOME TAX EXPENSE (852 ) (2,907 ) (6,474 ) (g) (18,455 ) (g) (7,326 ) (21,362 )
           
NET PROFIT (LOSS) FOR THE PERIOD

 

$

131,485

 

 

$

124,029

 

 

$

(201,754

)

 

$

(142,559

)

 

$

(70,269

)

 

$

(18,530

)

 
 
 
NON-GAAP GROSS MARGINS   37 %   36 %
 
NON-GAAP OPERATING MARGINS   26 %   25 %
 
NON-GAAP NET MARGINS   21 %   20 %
 
(a)   Includes depreciation and amortization expenses in the amounts of $153,746 and $132,946 and stock based compensation expenses in the amounts of $902 and $1,120 for the years ended December 31, 2012 and 2011, respectively.
(b) Includes depreciation and amortization expenses in the amounts of $1,304 and $1,174 and stock based compensation expenses in the amounts of $714 and $850 for the years ended December 31, 2012 and 2011, respectively.
(c) Includes depreciation and amortization expenses in the amounts of $1,121 and $1,404 and stock based compensation expenses in the amounts of $4,121 and $6,137 for the years ended December 31, 2012 and 2011, respectively.
(d) Includes acquisition costs, reorganization costs and gain from acquisition.
(e)

Non-GAAP interest expense, net and other financing expense, net include only interest on an accrual basis

(f) Includes gain from the sale of HHNEC shares.
(g) Non-GAAP income tax expenses include taxes paid during the period
(*)

Basic earnings per ordinary share according to non-GAAP results is $6.08 and $6.16 for the years ended December 31, 2012 and December 31, 2011, respectively and the weighted average number of ordinary shares outstanding is 21,623 thousands and 20,138 thousands for these periods.

Fully diluted earnings per share according to non-GAAP results would be $2.68 and $2.60 for the years ended December 31, 2012 and December 31, 2011, respectively, and the weighted average number of shares outstanding would be 49.0 million and 47.6 million for these periods. Fully diluted earnings results and quantities of number of shares outstanding exclude 7.4 million and 4.0 million for the years ended December 31, 2012 and 2011, respectively, of equity and debt vehicles that carry exercise price and conversion ratios, which are above the average price of the company’s stock in 2012 and 2011, respectively.

(*) Share amounts reflect the one-to-fifteen reverse stock split effected on August 5, 2012.
 
 
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)
 
    Three months ended     Three months ended       Three months ended
December 31,

December 31,

December 31,

2012     2011 2012       2011 2012     2011
non-GAAP Adjustments (see a, b, c, d, e below) GAAP
 
REVENUES

 

$

147,587

 

$

174,584

 

$

--

 

$

--

 

$

147,587

 

$

174,584

 
COST OF REVENUES   98,279     116,842     40,738   (a)   40,168   (a)   139,017     157,010  
 
GROSS PROFIT   49,308     57,742     (40,738 )   (40,168 )   8,570     17,574  
 
OPERATING COSTS AND EXPENSES
 
Research and development 7,138 6,551 194 (b) 728 (b) 7,332 7,279
Marketing, general and administrative   9,737     11,526     1,018   (c)   1,771   (c)   10,755     13,297  
 
  16,875     18,077     1,212     2,499     18,087     20,576  
 
OPERATING PROFIT (LOSS) 32,433 39,665 (41,950 ) (42,667 ) (9,517 ) (3,002 )
 
INTEREST EXPENSES, NET (8,647 ) (6,110 ) -- (d) -- (d) (8,647 ) (6,110 )
 
OTHER FINANCING EXPENSE, NET -- -- (7,614 ) (d) (5,852 ) (d) (7,614 ) (5,852 )
 
OTHER INCOME (EXPENSE), NET   78     (157 )   --     --     78     (157 )
 
PROFIT (LOSS) BEFORE INCOME TAX 23,864 33,398 (49,564 ) (48,519 ) (25,700 ) (15,121 )
 
INCOME TAX BENEFIT (EXPENSE) (1,937 ) 509 4,248 (e) (2,089 ) (e) 2,311 (1,580 )
           
NET PROFIT (LOSS) FOR THE PERIOD

 

$

21,927

 

 

$

33,907

 

 

$

(45,316

)

 

$

(50,608

)

 

$

(23,389

)

 

$

(16,701

)

 
 
 
NON-GAAP GROSS MARGINS   33 %   33 %
 
NON-GAAP OPERATING MARGINS   22 %   23 %
 
NON-GAAP NET MARGINS   15 %   19 %
 
(a)   Includes depreciation and amortization expenses in the amounts of $40,539 and $39,917 and stock based compensation expenses in the amounts of $199 and $251 for the three months ended December 31, 2012 and 2011, respectively.
(b) Includes depreciation and amortization expenses in the amounts of $33 and $526 and stock based compensation expenses in the amounts of $161 and $202 for the three months ended December 31, 2012 and 2011, respectively.
(c) Includes depreciation and amortization expenses in the amounts of $208 and $332 and stock based compensation expenses in the amounts of $810 and $1,439 for the three months ended December 31, 2012 and 2011, respectively.
(d)

Non-GAAP interest expense, net and other financing expense, net include only interest on an accrual basis.

(e) Non-GAAP income tax expenses include taxes paid during the period.
(*)

Basic earnings per ordinary share according to non-GAAP results is $0.99 and $1.60 for the three months ended December 31, 2012 and December 31, 2011, respectively and the weighted average number of ordinary shares outstanding is 22,235 thousands and 21,217 thousands for these periods.

Fully diluted earnings per shares according to non-GAAP results would be $0.45 and $0.70 for the three months ended December 31, 2012 and December 31, 2011, respectively, and the weighted average number of shares outstanding would be 48.9 million and 48.6 million for these periods. Fully diluted earnings results and quantities of number of shares outstanding exclude 22.7 million and 4.0 million for the three months ended December 31, 2012 and 2011, respectively, of equity and debt vehicles that carry exercise price and conversion ratios, which are above the average price of the company’s stock in 2012 and 2011, respectively.

(*) Share amounts reflect the one-to-fifteen reverse stock split effected on August 5, 2012.




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