Full Year 2019 Revenues of $1.23 Billion Resulting in Positive Cash from Operations of $ 291 Million and Free Cash Flow of $119 Million

MIGDAL HAEMEK, Israel, Feb. 18, 2020 (GLOBE NEWSWIRE) -- TowerJazz (NASDAQ: TSEM & TASE: TSEM) reported today its results for the full year and for the fourth quarter ended December 31, 2019.

Full Year Results Overview:
Revenues for 2019 were $1.23 billion as compared to $1.30 billion in 2018, reflecting $111 million non-organic revenue reduction (mainly as a result of the March 2019 announced Panasonic renewed contract), offset by $41 million year over year organic revenue growth (defined as total revenue excluding revenues from Panasonic and revenues from Maxim in the San Antonio fab), reflecting 5% organic revenue growth.

Gross and operating profits for 2019 were $230 million and $87 million, respectively, as compared to $293 million and $155 million, in 2018, respectively; EBITDA for 2019 was $299 million as compared to $362 million in 2018; Net profit for 2019 was $90 million, representing $0.84 diluted earnings per share, as compared to $136 million net profit, or $1.32 diluted earnings per share, in 2018. The margin decrease as compared to 2018 is mainly due to the above described reduction in the non-organic revenue components.

Cash flow generated from operations in 2019 was $291 million, with $172 million investments in fixed assets, net, resulting in $119 million free cash flow. In 2019, the company repaid $19 million of its debt.  In 2018, cash generated from operations was $313 million, with investment in fixed assets, net of $170 million, resulting in $143 million free cash flow. In 2018 the company repaid a net amount of $49 million of its debt.  

Shareholders' equity as of December 31, 2019 was a record of $1.35 billion, as compared to $1.24 billion as of December 31, 2018, reflecting 70% from total assets.

Fourth Quarter Results Overview
Revenues for the fourth quarter of 2019 were $306 million as compared to $334 million in the fourth quarter of 2018, reflecting $36 million non-organic revenue reduction (mainly as a result of the March 2019 announced Panasonic renewed contract), offset by $8 million year over year organic growth (defined as total revenue excluding revenues from Panasonic in the TPSCo fabs and revenues from Maxim in the San Antonio fab), reflecting 4% organic revenue growth.

Gross and operating profits for the fourth quarter of 2019 were $55 million and $19 million, respectively, as compared to $58 million and $23 million respectively, in the prior quarter, and as compared to $76 million and $40 million respectively, in the fourth quarter of 2018; EBITDA for the fourth quarter of 2019 was $75 million, as compared to $75 million in the prior quarter and to $93 million in the fourth quarter of 2018; Net profit for the fourth quarter of 2019 was $21 million, or $0.19 basic and diluted earnings per share, as compared to $22 million or $0.21 basic and diluted earnings per share in the prior quarter. Net profit for the fourth quarter of 2018 was $38 million, or $0.36 diluted earnings per share. The margin decrease, as compared to 2018, is mainly due to the above described reduction in the non-organic revenue components.

Cash flow generated from operations in the fourth quarter of 2019 was $72 million, with $44 million investments in fixed assets, net, resulting in $28 million free cash flow. In the fourth quarter of 2019, the company repaid $3 million of its debt.  In the third quarter of 2019, cash generated from operations was $73 million, with investment in fixed assets, net of $43 million, resulting in $30 million free cash flow. In the third quarter of 2019 the company repaid $6 million of its debt.  

Business Outlook
TowerJazz expects revenues for the first quarter of 2020 to be $300 million, with an upward or downward range of 5%.

Mr. Russell Ellwanger, Chief Executive Officer of TowerJazz, commented, “Our strong, long-term customer partnerships with a focus on growing analog market applications, enabled us to achieve organic growth in 2019. Our customer forecast and present orders indicate good overall growth ramping sequentially throughout 2020, resulting in a significant second half 2020 performance as compared to the second half 2019. We expect 2020 to achieve year-over-year growth with low double-digit organic growth, achieved through higher utilization levels in our factories including the ramp of our newer 200mm technology platforms and offerings, an increase in 300mm customer demand supported by capacity increase organically for short to mid-term, and in addition, capacity growth through M&As for long-term demand. We are well-positioned to participate in and benefit from expected markets recovery and present upward business trends.”

Teleconference and Webcast 
TowerJazz will host an investor conference call today, Tuesday, February 18, 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 fourth quarter and full year 2019 and its outlook.

This call will be webcast and can be accessed via TowerJazz’s website at www.towerjazz.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 TowerJazz’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, is 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 more 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 cash from operating activities (in the amounts of $72 million, $73 million and $91 million for the three months periods ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively and in the amounts of $291 million and $313 million for the years ended December 31, 2019 and December 31, 2018, respectively) less cash for investments in property and equipment, net (in the amounts of $44 million, $43 million and $49 million for the three months periods ended December 31, 2019, September 30, 2019 and December 31, 2018, respectively and in the amounts of $172 million and $170 million for the years ended December 31, 2019 and December 31, 2018, 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. With regards to our balance sheet as of December 31, 2019, as disclosed in our annual financial statements, we implemented ASU 2016-02 “Leases” effective January 1, 2019 with regards to lease right-of-use assets and lease liabilities, which implementation resulted in our lease contracts value presentation under long-term assets, short-term debt and long-term debt as of December 31, 2019. In addition, short-term debt as of December 31, 2019 includes $38 million of the first and second installment payments scheduled in March and September 2020 for series G bonds.