View:
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of May 2007 (No. 1)
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 May 1, 2007, the Registrant announced its financial results for the
three months ended March 31, 2007. Attached hereto are the following exhibits
Exhibit 99.1 Press release dated May 1, 2007
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: May 1, 2007 By: /s/ Nati Somekh Gilboa
--------------------------
Nati Somekh Gilboa
Corporate Secretary
EXHIBIT 99.1
TOWER SEMICONDUCTOR FIRST QUARTER 2007 REVENUES
INCREASED 55 PERCENT YEAR-OVER-YEAR
COMPANY MAINTAINS POSITIVE CASH FLOW FROM OPERATIONS AND POSITIVE
EBITDA AND GUIDES FOR EIGHTH SEQUENTIAL QUARTER OF REVENUE GROWTH
MIGDAL HAEMEK, Israel - May 1, 2007 - Tower Semiconductor Ltd. (Nasdaq: TSEM,
TASE: TSEM), an independent specialty foundry, today announced first quarter
2007 financial results.
FINANCIAL HIGHLIGHTS:
o Reported quarterly revenues of $55.6 million, meeting previously
stated guidance, and representing year-over-year growth of
approximately 55 percent
o Recorded positive cash flow from operations for the second consecutive
quarter and achieved positive EBITDA for the sixth consecutive quarter
o Expecting continued revenue growth in the second quarter of 2007 to be
between $56 and $60 million, which will represent the eighth
sequential quarter of revenue growth, and will represent between 26
and 35 percent year-over-year revenue growth.
For the first quarter of 2007, the Company reported total revenues of $55.6
million, representing a 55 percent increase as compared to $35.9 million
reported in the first quarter of 2006. Net Loss in accordance with generally
accepted accounting principles (GAAP) for the first quarter of 2007 was $37.4
million, or $0.36 per share, as compared to a GAAP net loss of $45.1 million, or
$0.63 per share, for the first quarter of 2006. Non-GAAP operating profit (as
described and reconciled below) for the first quarter of 2007 was $11.8 million,
as compared to non-GAAP operating profit for the first quarter of 2006 of $5.2
million.
"We take satisfaction that in Q1, which saw a world-wide foundry revenue drop
exceeding ten percent, we achieved the upper range of an aggressive guidance and
are able to guide Q2 to be our eighth consecutive quarter of revenue growth",
said Russell Ellwanger, chief executive officer of Tower Semiconductor. "Driven
by strong customer demand both Fabs ran at above 90 percent utilization rates
during the quarter. As we near the completion of our 50 percent Fab2 capacity
expansion, we believe we are well positioned to continue growth in the second
half of 2007, fueled by multiyear contracts from new and existing customers.
This quarter's results reaffirm our confidence in our business model and
demonstrate the benefits of serving a customer base representing multiple
segments and specialty products in order to enable growth despite the industry
cycles".
BUSINESS OUTLOOK:
Tower expects continued growth in the second quarter of 2007 and forecasts
revenue to be between $56 and $60 million, which will represent between 26 and
35 percent year-over-year revenue growth.
FIRST QUARTER 2007 FINANCIAL RESULTS CONFERENCE CALL AND WEB CAST: Tower will host a conference call to discuss these results on Tuesday, May 1, 2007, at 12:00 p.m. Eastern Standard Time / 7:00 p.m. Israel time. To participate, please call: 1-888-668-9141 (U.S. toll-free number) or 972-3-918-0609 (international) and mention ID code: TOWER. Callers in Israel are invited to call locally by dialing 03-918-0609. The conference call will also be Web cast live at http://www.earnings.com and at www.towersemi.com and will be available thereafter on both Web sites for replay for 90 days, starting at approximately 2:00 p.m. Eastern Standard Time on the day of the call. As used in this release, the term EBITDA consists of loss, according to GAAP (Generally Accepted Accounting Principles), excluding interest and financing expenses (net), tax and depreciation and amortization expenses. EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies. EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. This release, including the financial tables below, presents other financial information that may be considered "non-GAAP financial measures" under Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission as they apply to our company. These non-GAAP financial measures exclude (1) depreciation and amortization expenses and (2) compensation expenses in respect of options granted to directors, officers and employees. Non-GAAP 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 non-GAAP financial measures, as well a reconciliation between the non-GAAP financial measures and the most comparable GAAP financial measures. The non-GAAP financial information presented herein should not be considered in isolation from or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. ABOUT TOWER SEMICONDUCTOR LTD. Tower Semiconductor Ltd. (Nasdaq: TSEM, TASE: TSEM) is an independent specialty foundry that delivers customized solutions in a variety of advanced CMOS technologies, including digital CMOS, mixed-signal and RF (radio frequency) CMOS, CMOS image sensors, power management devices, and embedded non-volatile memory solutions. Tower's customer orientation is complemented by its uncompromising attention to quality and service. Its specialized processes and engineering expertise provides highly flexible, customized manufacturing solutions to fulfill the increasing variety of customer needs worldwide. Boasting two world-class manufacturing facilities with standard and specialized process technologies ranging from 1.0- to 0.13-micron, Tower Semiconductor provides exceptional design support and technical services to help customers sustain long-term, reliable product performance, while delivering on-time and on-budget results. More information can be found at http://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 and raising the funds therefor, (ii) the cyclical nature of the
semiconductor industry and the resulting periodic overcapacity, fluctuations in
operating results, future average selling price erosion that may be more severe
than our expectations, (iii) having sufficient funds to operate the company in
the short-term and the funding needs for its ramp-up plan, (iv) operating our
facilities at satisfactory utilization rates which is critical in order to
defray the high level of fixed costs associated with operating a foundry and
reduce our losses, (v) our ability to satisfy the covenants stipulated in our
amended credit facility agreement, (vi) our ability to capitalize on increases
in demand for foundry services, (vii) meeting the conditions to receive Israeli
government grants and tax benefits approved for Fab 2 and obtaining the approval
of the Israeli Investment Center for a new expansion program, (viii) attracting
additional customers, (ix) not receiving orders from our wafer partners and
customers, (x) failing to maintain and develop our technology processes and
services, (xi) competing effectively, (xii) our large amount of debt and our
ability to repay our short-term and long-term debt on a timely basis, (xiii)
achieving acceptable device yields, product performance and delivery times,
(xiv) the timely development, internal qualification and customer acceptance of
new processes and products and (xv) business interruption due to terror attacks,
earthquakes, other acts of God and the security situation in Israel.
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 filings on Forms 20-F, F-3 and 6-K, as were filed with the
Securities and Exchange Commission and the Israel Securities Authority. Future
results may differ materially from those previously reported. We do not intend
to update, and expressly disclaim any obligation to update, the information
contained in this release.
Contact:
Tower Semiconductor
Noit Levi, +972 4 604 7066
noitle@towersemi.com
or:
Shelton Group
Jim Mathias, (972) 239-5119 ext. 115
jmathias@sheltongroup.com
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31,
-------- --------
2007 2006
-------- --------
(UNAUDITED)
--------
A S S E T S
CURRENT ASSETS
CASH, CASH EQUIVALENTS AND DEPOSITS $ 43,592 $ 40,940
TRADE ACCOUNTS RECEIVABLE 36,127 31,498
OTHER RECEIVABLES 5,174 5,425
INVENTORIES 38,245 34,763
OTHER CURRENT ASSETS 1,676 1,473
-------- --------
TOTAL CURRENT ASSETS 124,814 114,099
-------- --------
PROPERTY AND EQUIPMENT, NET 519,876 539,292
-------- --------
INTANGIBLE ASSETS, NET 42,590 44,981
-------- --------
OTHER ASSETS, NET 1,320 1,346
======== ========
TOTAL ASSETS $688,600 $699,718
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF CONVERTIBLE DEBENTURES $ 6,597 $ 6,632
TRADE ACCOUNTS PAYABLE 57,922 55,128
OTHER CURRENT LIABILITIES 20,188 22,096
-------- --------
TOTAL CURRENT LIABILITIES 84,707 83,856
LONG-TERM DEBT FROM BANKS 358,798 356,947
CONVERTIBLE DEBENTURES 57,853 62,175
LONG-TERM CUSTOMERS' ADVANCES 44,050 46,042
OTHER LONG-TERM LIABILITIES 21,353 17,708
-------- --------
TOTAL LIABILITIES 566,761 566,728
-------- --------
SHAREHOLDERS' EQUITY 121,839 132,990
======== ========
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $688,600 $699,718
======== ========
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA AND PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
-------------------------------------
2007 2006 2005
--------- --------- ---------
REVENUES $ 55,604 $ 35,875 $ 23,167
COST OF SALES 71,494 61,280 61,214
--------- --------- ---------
GROSS PROFIT (LOSS) (15,890) (25,405) (38,047)
--------- --------- ---------
OPERATING COSTS AND EXPENSES
RESEARCH AND DEVELOPMENT 3,597 3,354 4,763
MARKETING, GENERAL&ADMINISTRATIVE 7,825 5,324 4,528
--------- --------- ---------
11,422 8,678 9,291
========= ========= =========
OPERATING PROFIT (LOSS) (27,312) (34,083) (47,338)
FINANCING INCOME (EXPENSE), NET (10,148) (11,524) (8,175)
OTHER INCOME, NET 69 551 193
--------- --------- ---------
NET PROFIT (LOSS) FOR THE PERIOD $ (37,391) $ (45,056) $ (55,320)
========= ========= =========
EARNING (LOSS) PER ORDINARY SHARE
(*) BASIC AND DILUTED EARNING (LOSS) PER SHARE $ (0.36) $ (0.63) $ (0.84)
========= ========= =========
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES OUTSTANDING - IN THOUSANDS 105,060 71,872 65,700
========= ========= =========
(*) BASIC AND DILUTED LOSS PER SHARE IN ACCORDANCE WITH U.S. GAAP FOR THE THREE
MONTHS PERIODS ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005 ARE
$0.38, $0.56 AND $0.84, RESPECTIVELY.
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
RECONCILIATION OF REPORTED GAAP TO NON-GAAP CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA AND PER SHARE DATA)
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31,
------------------------------ ------------------------------ --------------------------------
2007 2006 2005 2007 2006 2005 2007 2006 2005
-------- -------- -------- -------- -------- -------- -------- -------- --------
DEPRECIATION, AMORTIZATION AND
STOCK BASED COMPENSATION EXPENSES
NON-GAAP (SEE A, B, C BELOW) GAAP
------------------------------ ------------------------------ --------------------------------
REVENUES $ 55,604 $ 35,875 $ 23,167 $ -- $ -- $ -- $ 55,604 $ 35,875 $ 23,167
COST OF SALES 34,718 23,298 27,000 36,776(A) 37,982(A) 34,214(A) 71,494 61,280 61,214
-------- -------- -------- -------- -------- -------- -------- -------- --------
GROSS PROFIT (LOSS) 20,886 12,577 (3,833) (36,776) (37,982) (34,214) (15,890) (25,405) (38,047)
-------- -------- -------- -------- -------- -------- -------- -------- --------
OPERATING COSTS AND EXPENSES
RESEARCH AND DEVELOPMENT 2,752 2,227 3,810 845(B) 1,127(B) 953(B) 3,597 3,354 4,763
MARKETING, GENERAL&ADMINISTRATIVE 6,304 5,154 4,513 1,521(C) 170(C) 15(C) 7,825 5,324 4,528
-------- -------- -------- -------- -------- -------- -------- -------- --------
9,056 7,381 8,323 2,366 1,297 968 11,422 8,678 9,291
======== ======== ======== ======== ======== ======== ======== ======== ========
OPERATING PROFIT (LOSS) $ 11,830 $ 5,196 $(12,156) $(39,142) $(39,279) $(35,182) (27,312) (34,083) (47,338)
======== ======== ======== ======== ======== ========
FINANCING INCOME (EXPENSE), NET (10,148) (11,524) (8,175)
OTHER INCOME, NET 69 551 193
-------- -------- --------
NET PROFIT (LOSS) FOR THE PERIOD $(37,391) $(45,056) $(55,320)
======== ======== ========
EARNING (LOSS) PER ORDINARY SHARE
(*) BASIC AND DILUTED EARNING (LOSS) PER SHARE $ (0.36) $ (0.63) $ (0.84)
======== ======== ========
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES OUTSTANDING - IN THOUSANDS 105,060 71,872 65,700
======== ======== ========
(*) BASIC AND DILUTED LOSS PER SHARE IN ACCORDANCE WITH U.S. GAAP FOR THE THREE
MONTHS PERIODS ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005 ARE
$0.38, $0.56 AND $0.84, RESPECTIVELY.
(a) INCLUDES DEPRECIATION AND AMORTIZATION EXPENSES IN THE AMOUNTS OF $36,621,
$37,835 AND $34,214 FOR THE THREE MONTHS ENDED MARCH 31, 2007, MARCH 31,
2006 AND MARCH 31, 2005, RESPECTIVELY AND STOCK BASED COMPENSATION EXPENSES
IN THE AMOUNTS OF $155 AND $147 FOR THE THREE MONTHS ENDED MARCH 31, 2007
AND MARCH 31, 2006, RESPECTIVELY.
(b) INCLUDES DEPRECIATION AND AMORTIZATION EXPENSES IN THE AMOUNTS OF $706,
$1,055 AND $953 FOR THE THREE MONTHS ENDED MARCH 31, 2007, MARCH 31, 2006
AND MARCH 31, 2005, RESPECTIVELY AND STOCK BASED COMPENSATION EXPENSES IN
THE AMOUNTS OF $139 AND $72 FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND
MARCH 31, 2006, RESPECTIVELY.
(c) INCLUDES DEPRECIATION AND AMORTIZATION EXPENSES IN THE AMOUNTS OF $3, $10
AND $15 FOR THE THREE MONTHS ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH
31, 2005, RESPECTIVELY AND STOCK BASED COMPENSATION EXPENSES IN THE AMOUNTS
OF $1,518 AND $160 FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND MARCH 31,
2006, RESPECTIVELY.