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TowerJazz Reports Full Year 2019 Results with 5% Organic Revenue Growth

Daniel Nenni

Admin
Staff member
Expects Revenue Growth for 2020
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 – February 18, 2020 – 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.
 
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