FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of February 2004
TOWER SEMICONDUCTOR LTD.
(Translation of registrant's name into English)
RAMAT GAVRIEL INDUSTRIAL PARK
P.O. BOX 619, MIGDAL HAEMEK, ISRAEL 23105
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [_]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [_] No [X]
On February 2, 2004, the Registrant announced its financial results for the
fourth quarter and year ended December 31, 2003. Attached hereto is the press
release announcing the results.
This Form 6-K is being filed and incorporated by reference in all effective
registration statements filed by the Registrant under the Securities Act of
1933.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TOWER SEMICONDUCTOR LTD.
Date: February 2, 2004 By: /s/ Tamar Cohen
-------------------
Tamar Cohen
Corporate Secretary and General
Counsel
EXHIBIT 99.1 PRESS RELEASE ISSUED ON FEBRUARY 2, 2004
TOWER SEMICONDUCTOR LTD. ANNOUNCES
FOURTH QUARTER AND YEAR-END 2003 RESULTS
MIGDAL HAEMEK, Israel - February 2, 2004. Tower Semiconductor Ltd. (NASDAQ:
TSEM; TASE: TSEM) today announced results for the fourth quarter and 12 months
ended December 31, 2003.
Revenues for the fourth quarter of 2003 were $19.8 million, an increase of 23
percent over revenues of $16.1 million in the prior quarter. In the fourth
quarter of 2002, the company reported revenues of $15.6 million, including $4.0
million from a technology-related agreement.
Total fourth quarter loss was $ 46.0 million, or $0.91 per share, compared with
a loss of $37.1 million, or $0.77 per share, for the third quarter of 2003 and a
loss of $13.6 million, or $0.33 per share, in the fourth quarter of 2002. The
increased loss in the fourth and third quarters of 2003, as compared to the
respective period of 2002, results mainly from the commencement of Fab 2
depreciation and amortization expenses, which were $20.0 million and $17.3
million for the fourth and third quarters of 2003, respectively.
Revenues for the 12 months ended December 31, 2003 were $61.4 million, compared
with revenues of $51.8 million for the 12 months ended December 31, 2002, which
included $8.1 million from a technology-related agreement.
The company reported a loss of $114.3 million, or $2.40 per share, for the 12
months ended December 31, 2003, compared with a loss of $51.4 million, or $1.63
per share in the 12 months ended December 31, 2002. The increased loss resulted
primarily from the commencement of Fab 2 depreciation and amortization expenses,
which totaled $37.3 million for the 12 months ended December 31, 2003.
The company expects Q-1 2004 consolidated revenues to be in the range of $23
million and $25 million. Depreciation expenses for that period are expected to
be in the range of $26 million and $28 million.
"Strong demand from our Fab 2 existing and new customers enables us to continue
to focus on our ramp execution," said Carmel Vernia, Tower's chairman and chief
executive officer. "By December 31, 2003, Fab 2 had installed equipment capacity
of 8,500 wafer starts per month using 0.18-micron process technology. We
currently expect to have installed equipment capacity of between 13,000 and
15,000 wafers per month by the end of 2004."
"Our Fab 2 financing package with our banks and major investors was completed,
as well as our underwritten equity offering of 11 million of our ordinary shares
at a price to the public of $7.00 per share. With these financing deals behind
us, we can now focus on our business operations," continued Vernia.
"In addition, Fab 1 had positive cash flow from operations for the seventh
consecutive quarter. The memorandum of understanding recently signed with
Siliconix calls for placing orders valued at approximately $200 million for the
purchase of products to be manufactured in Fab 1 over a seven to ten years
period."
During January the company's share count increased mainly as a result of the
follow-on public offering and issuance of 2.3 million shares to its strategic
partners in connection with the final payment of Fab 2's fifth milestone, at $7
per share. The number of Tower's outstanding shares as of February 2, 2004 is
65,137,883.
Tower will host a conference call to discuss these results on Monday, February
2, 2004 at 11:00 a.m. Eastern time / 18:00 Israel time. To participate, call
1-800-915-4836 (U.S. toll-free number) or 1-973-317-5319 (international) and
mention ID code: TOWER. Callers in Israel are invited to call local 03-925-5910.
The conference call also will be webcast live at www.companyboardroom.com and at
www.towersemi.com and will be available thereafter on both Web sites for replay
for 90 days, starting at 2:00 p.m. Eastern time on the day of the call.
ABOUT TOWER SEMICONDUCTOR LTD.
Tower Semiconductor Ltd. is a pure-play independent wafer foundry established in
1993. The company manufactures integrated circuits with geometries ranging from
1.0 to 0.18 microns; it also provides complementary manufacturing services and
design support. In addition to digital CMOS process technology, Tower offers
advanced non-volatile memory solutions, mixed-signal and CMOS image-sensor
technologies. To provide world-class customer service, the company maintains two
manufacturing facilities: Fab 1 has process technologies from 1.0 to 0.35
microns and can produce up to 16,000 150mm wafers per month. Fab 2 features
0.18-micron and below process technologies, including foundry-standard
technology, and will offer full production capacity of 33,000 200mm wafers per
month. The Tower Web site is located at www.towersemi.com.
SAFE HARBOR
THIS PRESS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT
TO RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY FROM THOSE PROJECTED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. POTENTIAL RISKS AND UNCERTAINTIES
INCLUDE, WITHOUT LIMITATION, RISKS AND UNCERTAINTIES ASSOCIATED WITH: (I) THE
COMPLETION OF THE EQUIPMENT INSTALLATION, TECHNOLOGY TRANSFER AND RAMP-UP OF
PRODUCTION IN FAB 2, (II) HAVING SUFFICIENT FUNDS TO COMPLETE THE FAB 2 PROJECT,
(III) THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY AND THE RESULTING
PERIODIC OVERCAPACITY, (IV) OPERATING OUR FACILITIES AT SATISFACTORY UTILIZATION
RATES, (V) OUR ABILITY TO CAPITALIZE ON INCREASES IN DEMAND FOR FOUNDRY
SERVICES, (VI) MEETING THE CONDITIONS TO RECEIVE ISRAELI GOVERNMENT GRANTS AND
TAX BENEFITS APPROVED FOR FAB 2 AND OBTAINING THE APPROVAL OF THE ISRAELI
INVESTMENT CENTER TO EXTEND THE FIVE-YEAR INVESTMENT PERIOD UNDER OUR FAB 2
APPROVED ENTERPRISE PROGRAM AND OF AMENDMENTS TO OUR MODIFIED BUSINESS PLAN,
(VII) ATTRACTING ADDITIONAL CUSTOMERS, (VIII) NOT RECEIVING ORDERS FROM OUR
WAFER PARTNERS AND TECHNOLOGY PROVIDERS, (IX) FAILING TO MAINTAIN AND DEVELOP
OUR TECHNOLOGY PROCESSES AND SERVICES, (X) COMPETING EFFECTIVELY, (XI) OUR LARGE
AMOUNT OF DEBT AND OUR SATISFYING THE COVENANTS SET FORTH IN OUR AMENDED
FACILITY AGREEMENT, AND (XII) ACHIEVING ACCEPTABLE DEVICE YIELDS, PRODUCT
PERFORMANCE AND DELIVERY TIMES (XIII) THE COMPLETION OF THE DOCUMENTATION FOR
THE SILICONIX AGREEMENT. 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 OUR MOST RECENT ANNUAL REPORT ON FORM 20-F AND IN OUR
FORM F-3, AS AMENDED, AS WERE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND THE ISRAEL SECURITIES AUTHORITY.
# # #
PR Agency Contact Investor Relations Contact Corporate Contact
Julie Lass Sheldon Lutch Michael Axelrod
Loomis Group Fusion IR & Communications Tower Semiconductor USA
+1 (713) 526 3737 +1 (212) 268 1816 +1 (408) 330 6871
lassj@loomisgroup.com sheldon@fusionir.com pr@towersemi.com
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA AND PER SHARE DATA)
As of December 31,
------------------
2003 2002
------------- -------------
A S S E T S
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 12,448 $ 7,857
SHORT-TERM INTEREST-BEARING DEPOSITS -- 10,500
CASH AND SHORT-TERM INTEREST-BEARING DEPOSITS
DESIGNATED FOR INVESTMENTS RELATING TO FAB 2 44,042 51,338
TRADE ACCOUNTS RECEIVABLE (NET OF ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $0 AND $155, RESPECTIVELY) 11,631 7,456
OTHER RECEIVABLES 11,073 21,322
INVENTORIES 19,382 10,201
OTHER CURRENT ASSETS 1,729 1,407
------------- -------------
TOTAL CURRENT ASSETS 100,305 110,081
------------- -------------
LONG-TERM INVESTMENTS
LONG-TERM INTEREST-BEARING DEPOSITS
DESIGNATED FOR INVESTMENTS RELATING TO FAB 2 4,848 11,893
OTHER LONG-TERM INVESTMENT 6,000 6,000
------------- -------------
10,848 17,893
------------- -------------
PROPERTY AND EQUIPMENT, NET 568,412 493,074
------------- -------------
OTHER ASSETS, NET 108,770 95,213
============= =============
TOTAL ASSETS $ 788,335 $ 716,261
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
SHORT-TERM DEBT $ -- $ 4,000
TRADE ACCOUNTS PAYABLE 40,249 76,083
OTHER CURRENT LIABILITIES 9,564 8,071
------------- -------------
TOTAL CURRENT LIABILITIES 49,813 88,154
LONG-TERM DEBT 431,000 253,000
CONVERTIBLE DEBENTURES 25,783 24,121
OTHER LONG-TERM LIABILITIES 5,935 5,406
LONG-TERM LIABILITY IN RESPECT
OF CUSTOMERS' ADVANCES 46,347 47,246
------------- -------------
TOTAL LIABILITIES 558,878 417,927
------------- -------------
SHAREHOLDERS' EQUITY
ORDINARY SHARES 13,150 11,294
ADDITIONAL PAID-IN CAPITAL 427,881 400,808
PROCEEDS ON ACCOUNT OF SHARE CAPITAL 16,428 --
SHAREHOLDER RECEIVABLES AND UNEARNED COMPENSATION (26) (53)
ACCUMULATED DEFICIT (218,904) (104,643)
------------- -------------
238,529 307,406
TREASURY STOCK, AT COST - 1,300,000 SHARES (9,072) (9,072)
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 229,457 298,334
============= =============
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 788,335 $ 716,261
============= =============
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- --------------------------
2003 2002 2003 2002
----------- ---------- ---------- ----------
SALES $ 61,368 $ 51,801 $ 19,823 $ 15,572
COST OF SALES 122,395 67,022 46,579 17,066
----------- ---------- ---------- ----------
GROSS LOSS (61,027) (15,221) (26,756) (1,494)
OPERATING COSTS AND EXPENSES
RESEARCH AND DEVELOPMENT 20,709 17,031 8,158 6,847
MARKETING, GENERAL AND ADMINISTRATIVE 22,615 17,091 5,551 5,284
----------- ---------- ---------- ----------
OPERATING LOSS (104,351) (49,343) (40,465) (13,625)
FINANCING EXPENSE, NET (9,826) (2,104) (5,533) (4)
OTHER INCOME (EXPENSE), NET (84) 45 3 45
----------- ---------- ---------- ----------
LOSS FOR THE YEAR $ (114,261) $ (51,402) $ (45,995) $ (13,584)
=========== ========== ========== ==========
BASIC LOSS PER ORDINARY SHARE
LOSS PER SHARE $ (2.40) $ (1.63) $ (0.91) $ (0.33)
=========== ========== ========== ==========
(**) BASIC AND DILUTED LOSS PER SHARE IN ACCORDANCE WITH U.S. GAAP WOULD BE
$(2.45) AND $(0.93) FOR THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2003
[$(1.63) AND $(0.33) IN THE YEAR AND THREE MONTHS ENDED DECEMBER 31, 2002,
RESPECTIVELY].