By Ken Nagy, CFA
On May 9, 2013, Tower Semiconductor Ltd (NasdaqGS:
)., the Israel based global specialty foundry leader, reported
financial results for its first quarter ended March 31, 2013.
The company reported mixed results with first quarter revenues of
$112.647 million, which fell $55.366 million year over year and
$34.940 million sequentially.
The revenue reduction was primarily due to the planned
contractual decrease in the Micron volume agreement in Nishiwaki.
Still, it should be noted that management sees this as short
term, as evidenced by the Company's record number of full mask
tape-outs into Tower's 8" facilities and strong and increasing
demand in the Israeli 6" factory resulting in an upward
sequential quarterly guidance.
Year over year, GAAP gross margin dropped from 13.5 percent to
2.3 percent for the three months ended December 31, 2012.
Sequentially, gross revenue dropped from 5.8 percent in the
quarter ended December 31, 2012.
Operating loss for the three months ended March 31, 2013 was
$18.831 million compared to an operating profit of $2.248 million
for the comparable quarter of 2012 and an operating loss of
$9.517 million during the fourth quarter fiscal 2012.
Tower reported a first quarter 2013 GAAP net loss of $23.151
million, up year over year from a net loss of $16.281 million for
the first quarter 2012 and up sequentially from a net loss of
$25.700 million during the fourth quarter 2012
Based on a weighted average number of ordinary shares outstanding
of 24.1 million, GAAP basic net loss per share resulted in a net
loss of $0.96 per share during the first quarter of fiscal
2013. This compared to a basic net loss per ordinary share
of $1.05 on a weighted average number of ordinary shares of 22.2
million during the three months ended December 31, 2012.
Non-GAAP first quarter 2013 gross profit was $33.700 million
representing gross margin of 29.9 percent while non-GAAP net
profit was $6.473 million.
This compares to non-GAAP gross profit of $49.308 million and
gross margin of 33.4 percent. Non-GAAP net profit was $21.927
million for the fourth quarter ended December 31, 2012.
Tower Semiconductor's balance sheet remained strong with $119.707
million in cash and short-term deposits and working capital of
$141.438 million for the period ended March 31, 2013.
This compares to $133.398 million in cash and short-term deposits
and working capital of $129.186 million for the period ended
December 31, 2012.
Along the same lines, Tower reduced 2013 and 2014 principal
payments from $105 million to $30 million, extending a low
interest of LIBOR+3.5 percent bank loan ($131 million) to final
maturity in 2016.
Finally, management anticipates fiscal 2013 second quarter
revenues to be in the range of $122 to $132 million, representing
sequential mid-range growth of nearly 13 percent.
Additionally, design win activity remains strong at a quarterly
level of about one hundred, demonstrating customer acceptance of
Tower's platform differentiation.
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