TowerJazz Presents Fourth Quarter and Full Year 2012 Financial Results

Full Year 2012 Revenues of $639 Million up 5% YoY

MIGDAL HAEMEK, Israel — (BUSINESS WIRE) — February 13, 2013 — TowerJazz, the global specialty foundry leader, today announced financial results for the fourth quarter and full year, ended December 31, 2012.

Highlights

  • Record full year revenues of $638.8 million, up 5% year-over-year, further cementing TowerJazz’s position as the #1 specialty foundry; $164 million EBITDA for 2012, reflecting 26% EBITDA margins and up 6% year-over-year;
  • Improvement in full year non-GAAP gross and operating margins at 37% and 26%, respectively as compared to 36% and 25% in 2011, respectively;
  • Full year non-GAAP net profit of $132 million and net margin of 21%, higher than $124 million and 20% net margin in 2011;
  • End of year cash balance of $133 million as compared to $101 million as of December 31, 2011.

CEO Perspective

Russell Ellwanger, Chief Executive Officer of TowerJazz, commented: "2012 was a noteworthy and strategically significant year for the company. We acquired the Nishiwaki factory with an understanding of long term capacity needs of our business. This demand is being realized and satisfied in the Nishiwaki factory with the press released Vishay-Siliconix advanced technology transfer, a very large Asian based fabless existing customer transferring its highest volume flow to Nishiwaki and multiple new Japanese and Korean customer engagements. Our recent introduction of an advanced SOI Switch platform opens a new market for us and has already realized over 25 customer tape-outs. In 2012, we had over 450 full mask set tape outs and left the year with more than 400 new design wins. These numbers are at record levels and a strong indicator of customer traction and continued growth."

Ellwanger further stated: "In the immediate, we see revenue reduction as per the planned contractual decrease in the Micron volume agreement in Nishiwaki. We see this as short term, corrected by the qualification and ramp of the above mentioned Nishiwaki based activities, as well as other strategic initiatives in new markets such as the SOI Switch. Our worldwide presence and specialty technology offerings have enabled us to create a competitive advantage for our customers and we expect further market share growth in our chosen value add segments during 2013."

Full year 2012 summary

2012 revenues were a record $638.8 million, an increase of 5 percent over revenues of $611.0 million for 2011.

On a non-GAAP basis, we achieved improvements in gross profit, operating profit and net profit.

Gross profit on a non-GAAP basis for 2012 was $233 million or gross margin of 37%, an improvement over the $219 million or gross margin of 36% in 2011.

Non-GAAP operating profit for 2012 was $165 million or operating margin of 26% compared with an operating profit of $155 or operating margin of 25% million in 2011.

Net profit for 2012, on a non-GAAP basis was $131.5 million or net margin of 21%, as compared to $124.0 million or net margin of 20% in 2011.

On a GAAP basis, 2012 net loss was $70 million or $3.25 per share compared with a net loss of $19 million, or $0.92 per share in 2011. As compared to the previous year, financing expenses increased, mainly due to GAAP, non-cash financing expenses resulting from the changes in the fair market value of part of our debentures and warrants which are recorded at fair market value per GAAP and from the effect of the NIS/USD exchange rate changes on our NIS denominated debentures. Excluding financing expenses and the one-time items in 2011 of gain from the sale of the Company’s investment in HHNEC and the one-time gain from acquisition in 2011, and excluding the one-time acquisition related and reorganization costs, net of taxes, net loss in 2012 was $12 million as compared to $4 million in 2011.

EBITDA for 2012 improved to $164 million compared with $155 million in 2011.

The Company's cash and short-term deposits balance as of December 31, 2012 was $133 million as compared to $101 million as of December 31, 2011. Positive cash flow from operations for the year was $75 million (or $95 million excluding the one-time reorganization payments).

Fourth quarter 2012 results summary

Fourth quarter 2012 revenue reached $147.6 million as compared with $154.6 million in the prior quarter.

On a non-GAAP basis, as described and reconciled below, gross profit for the fourth quarter of 2012 was $49 million, representing a 33 percent gross margin, similar to the gross margin reported in the fourth quarter of 2011.

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