TowerJazz Continues Strong Performance: Announces Highest Ever Revenues, EBITDA And Free Cash Flow For The Third Quarter Of 2016

Revenues up 34% year over year; EBITDA up 54% year over year resulting in Net Profit of $51 million and Cash from Operations of $86 million

Further Revenue Growth Guided For the Fourth Quarter of 2016

MIGDAL HAEMEK, Israel, Nov. 15, 2016 (GLOBE NEWSWIRE) -- TowerJazz (NASDAQ:TSEM) (TASE:TSEM) today reported results for the third quarter of 2016 ended September 30, 2016.

Highlights of the Third Quarter of 2016
  • Record revenues of $326 million, 34% year over year growth;
  • Record EBITDA of $97 million, up 54% year-over-year;
  • Net profit of $51 million with basic earnings per share of $0.58, as compared with $14 million, or $0.18 basic earnings per share, in the third quarter of last year;
  • Cash from operations of $86 million as compared to $51 million for the third quarter of 2015, with free cash flow of $31 million as compared with $10 million for the third quarter of 2015;
  • Fourth quarter revenue guidance with mid-range of $340 million, representing 34% year over year growth; extending to 12 consecutive quarters of year over year growth.

CEO Commentary Mr. Russell Ellwanger, Chief Executive Officer of TowerJazz, commented, "our third quarter is our eleven consecutive quarter of year over year revenue and EBITDA growth and yielded approximately $400 million, $340 million and $200 million of annualized EBITDA, cash from operations and net profit, respectively. These results speak loudly to our business model and execution, including acquisitions that provide immediate ROI with long term revenue and margin guarantees from our seller partners and incremental growth against fully covered fixed costs. We have developed a customer base from which we continue to see strong demand across our different business units for our leading edge forefront differentiated technology. In addition, our worldwide operational model allows us to optimize product mix according to utilization rates, as demonstrated with significant increase in margins and EPS."

Ellwanger continued, "We expect to complete 2016 as the strongest year in our history. Based on our mid-range guidance, full year revenues would be $1.25 billion, a foundry leading year-over-year growth of 30% with more than proportional increase in all related financial metrics."

Third Quarter Results Overview Revenues for the third quarter of 2016 were a record of $326 million, reflecting 34% growth as compared with $244 million reported for the third quarter of 2015 and 7% higher than the $305 million reported in the immediately preceding quarter.

Gross profit for the third quarter of 2016 was $81 million. This represents an increase of 47% as compared with $55 million in gross profit in the third quarter of 2015, and an increase of 12% as compared with $73 million gross profit in the immediately preceding quarter.

Operating profit was $49 million for the third quarter of 2016, as compared with $24 million as reported in the third quarter of 2015 and $40 million in the immediately preceding quarter.

Net profit for the third quarter of 2016 was $51 million, or $0.58 in basic earnings per share, demonstrating increased net profit as compared with $14 million or $0.18 earnings per share in the third quarter of 2015 and as compared with $38 million, or $0.45 earnings per share in the second quarter of 2016. Net profit for the third quarter of 2016 included $6.5 million of income tax benefit related to finalization of the closure of the Japanese subsidiary that held the fab in Nishiwaki that ceased operations in 2014.

On an adjusted basis, as described and reconciled in the tables below, adjusted net profit for the third quarter of 2016 was $49 million, as compared with $19 million adjusted net profit reported for the third quarter of 2015 and $40 million reported in the immediately preceding quarter.

EBITDA for the third quarter of 2016 totaled $97 million. This represents a 54% increase as compared with $63 million in the third quarter of 2015 and 11% increase as compared with $87 million in the second quarter of 2016.

Cash and short-term deposits as of September 30, 2016 were $363 million, as compared with $311 million as of June 30, 2016. The main cash activities during the third quarter of 2016 were comprised mainly of the following: $86 million cash generated from operations; $22 million from exercise of warrants and options; $9 million debt received, net; investments of $55 million in fixed assets, net; and investment of $12 million in long term deposits. These cash activities resulted in free cash flow for the third quarter of 2016 of $31 million, as compared with $10 million in the third quarter of 2015 and $27 million, which included $11 million, net, of received customer prepayments, in the second quarter of 2016.

Shareholders' equity as of September 30, 2016 was $636 million, an increase of 65% as compared with $386 million as of December 31, 2015 and an increase of 14% as compared with $559 million as of June 30, 2016.  Net debt amounted to $16 million as of September 30, 2016 as compared with net debt of $51 million as of June 30, 2016.

Nine Months Results Overview Revenues for the first nine months of 2016 were a record $909 million, reflecting 29% growth as compared to $706 million in the first nine months of 2015.

Gross and operating profit for the first nine months of 2016 were $215 million and $120 million, respectively, reflecting a 53% and 152% increase respectively, as compared to gross and operating profit of $141 million and $48 million in the first nine months of 2015, respectively.

Net profit for the first nine months of 2016 was $156 million, or $1.81 in basic earnings per share. This included $51 million gain from the San Antonio acquisition and $6.5 million income tax benefit related to the finalization of the closure of the Nishiwaki Japanese subsidiary, which were partially offset by $7 million non-cash financing expenses relating to the Israeli banks' loans early repayment. This is compared to a net loss for the nine months ended September 30, 2015 of $52 million which included $74 million in a non-cash finance expense associated with Series F Bonds accelerated conversion done in 2015 and $11 million income tax benefit resulting from expiration of statute of limitations.

Excluding the above described one-time items, net profit for the first nine months of 2016 was $105 million as compared with $11 million for the first nine months of 2015, a $94 million improvement against $203 million of higher revenues.

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