Revenues of $300 Million; Cash from Operations of $68 Million, EBITDA of $73 Million and Net Profit of $17 Million

Guides Second Quarter Sequential Revenue Growth

MIGDAL HAEMEK, Israel, May 13, 2020 (GLOBE NEWSWIRE) -- Tower Semiconductor (NASDAQ: TSEM & TASE: TSEM) reported today its results for the first quarter ended March 31, 2020.

First Quarter Results Overview

Revenues for the first quarter of 2020 were $300 million, reflecting 10% year over year organic revenue growth (organic revenues are defined as total revenue excluding revenues from Panasonic in the TPSCo fabs and revenues from Maxim in the San Antonio fab).

Gross and operating profits for the first quarter of 2020 were $53 million and $16 million, respectively; the 10% year over year organic revenue growth and efficiencies enabled the company to mitigate 55% of the impact in gross and operating profits resulting from Panasonic renewed contract revenue reduction. EBITDA for the first quarter of 2020 was $73 million; Net profit for the first quarter of 2020 was $17 million, or $0.16 basic and diluted earnings per share.

Cash flow generated from operations in the first quarter of 2020 was $68 million. Investment in fixed assets, net was $63 million in the first quarter of 2020 and included payments related to the previously announced 300mm fab capex investment, to support current customer demand increase, with additional planned shipments beginning the third quarter of 2020. In the first quarter of 2020, the company repaid $24 million of its debt. 

Shareholders' equity as of March 31, 2020 was a record of $1.36 billion, reflecting 70% from total assets.

Business Outlook
Tower Semiconductor expects revenues for the second quarter of 2020 to be $310 million, with an upward or downward range of 5%.

Mr. Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, commented, “We began 2020 with a pandemic that has grown worldwide, vastly impacting the global business and economic environment. COVID-19 has created new and considerable hurdles, forcing us, together with the entire world, to modify and implement a new mode of life, and with that, a different mode of work. We remain proactive on all fronts with respect to the health and safety of our employees, operational and supply chain management and our customers with an even increased  communication, to maximize every 'wafer of opportunity' - providing reliable short- and long-term technology and manufacturing solutions in response to their changing needs.”

Ellwanger further commented: “Updated customer forecasts continue to show quarter over quarter growth through the year. As a well experienced, mature, strong global company – with an exceptional base of talented and most dedicated employees - we remain committed to our customer partnerships, towards long-term mutual growth, working through any short-term challenges.”

Corporate Credit Rating
On May 6, 2020, Standard & Poor’s Ma’alot (an Israeli rating company that is fully owned by S&P Global Ratings) completed its annual rating review for the Company and affirmed a corporate credit rating and bonds series G rating of “ilAA-“, with a stable horizon.

Shelf Filing
In May 2020, the ISA (Israel Securities Authority) approved the filing of the Company’s shelf registration statement, following the expiration of its previously filed 2016 shelf. The shelf provides the Company with a platform for future public fundraising although no specific fundraising is currently offered under this shelf. If the Company will make any decision to raise any funds under this shelf, it will publish a supplemental shelf-take-down report containing specific information and terms.  This shelf filing and/or this press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities. The shelf documents are available under www.tase.co.il.

Teleconference and Webcast
Tower Semiconductor will host an investor conference call today, Wednesday, May 13, 2020, at 10:00 a.m. Eastern time (9:00 a.m. Central time, 8:00 a.m. Mountain time, 7:00 a.m. Pacific time and 5:00 p.m. Israel time) to discuss the Company’s financial results for the first quarter of 2020 and its outlook.

This call will be webcast and can be accessed via Tower Semiconductor’s website at www.towersemi.com or by calling 1-888-668-9141 (U.S. Toll-Free), 03-918-0609 (Israel), +972-3-918-0609 (International). For those who are not available to listen to the live broadcast, the call will be archived on Tower Semiconductor’s website for 90 days.

The Company presents its financial statements in accordance with U.S. GAAP. The financial information included in the tables below includes unaudited condensed financial data. Some of the financial information in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, which we describe in this release as “adjusted” financial measures, are non-GAAP financial measures as defined in Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission as they apply to our Company. These adjusted financial measures are calculated excluding one or both of the following: (1) amortization of acquired intangible assets and (2) compensation expenses in respect of equity grants to directors, officers and employees. These adjusted financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the adjusted financial measures, as well as a reconciliation between the adjusted financial measures and the comparable GAAP financial measures. As used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, as well as calculated in the tables herein, the term Earnings Before Interest Tax Depreciation and Amortization (EBITDA) consists of net profit in accordance with GAAP, excluding interest and other financing expense, net, other income, net, taxes, non-controlling interest, depreciation and amortization expense and stock-based compensation expense. EBITDA is reconciled in the tables below from GAAP operating profit. EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies. EBITDA and the adjusted financial information presented herein and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, should not be considered in isolation or as a substitute for operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP. The term Net Cash, as used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, is comprised of cash, cash equivalents, short-term deposits and marketable securities less debt amounts as presented in the balance sheets included herein. The term Net Cash is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for cash, debt, operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP. The term Free Cash Flow, as used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, is calculated to be net cash provided by operating activities (in the amounts of $68 million, $72 million and $75 million for the three months periods ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively) less cash used  for investments in property and equipment, net (in the amounts of $63 million, $44 million and $42 million for the three months periods ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively) . The term Free Cash Flow is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP.