Exhibit 99.1
TOWER SEMICONDUCTOR LTD. ANNOUNCES SECOND QUARTER AND SIX MONTHS 2004 RESULTS
Quarterly Revenues Increased 161 Percent Year-Over-Year
and 24 Percent Sequentially
MIGDAL HAEMEK, Israel - July 21, 2004 - Tower Semiconductor Ltd. (NASDAQ: TSEM;
TASE: TSEM) today announced results for the second quarter and six months ended
June 30, 2004.
Revenues for the second quarter of 2004 totaled $33.7 million, an increase of
161 percent over $12.9 million reported in the second quarter of 2003 and an
increase of 24 percent over revenues of $27.2 million in the first quarter of
2004.
The loss in the second quarter narrowed to $36.5 million, or $0.55 per share,
compared to a loss of $38.5 million, or $0.61 per share, for the first quarter
of the year. In the second quarter of 2003 the company reported a net loss of
$16.8 million, or $0.37 per share.
Revenues for the six months ended June 30, 2004, were $60.9 million, an increase
of 139 percent over revenues of $25.5 million for the six months ended June 30,
2003. The company reported a loss of $75.0 million, or $1.16 per share, compared
with a loss of $31.2 million, or $0.70 per share, in the six months ended June
30, 2003.
Tower said the second quarter and first half losses reflect the high investment
made in Fab 2 and its resulting depreciation, and that it is on course toward
positive EBITDA by year-end. The company expects Q-3 2004 revenues to be in the
range of $35 million and $38 million.
"I am very pleased that we were able to achieve our performance goals this
quarter for both Fab 1 and Fab 2," said Carmel Vernia, Tower's chairman and
chief executive officer. "Fab 1 is profitable, and its utilization continues to
increase. Fab 2 is still expected to reach 14,000 installed capacity by year-end
and we continue to experience higher demand than our current installed capacity
from virtually all markets, especially for consumer devices, which results in
strong revenue growth."
"Progress was also made in our specialized technologies, with the receipt of our
first customer commitment for 0.18-micron embedded flash. Additionally, we
shipped first product samples of 0.18-micron CMOS image sensors to two customers
and started development work for the RFID tag market, combining our know how and
expertise in two of our specialized areas - embedded NVM and mixed signal
technologies. We have also continued to execute per plan on our 0.13-micron
technology transfer and infrastructure activities."
During the second quarter, the company received a Gold Supplier award for the
fifth-consecutive year from Freescale Semiconductor Inc., a subsidiary of
Motorola Inc.
Tower will host a conference call to discuss these results on Wednesday, July
21, 2004 at 11:00 a.m. Eastern time / 18:00 Israel time. To participate, call
1-800-946-0712 (U.S. toll-free number) or 1-719-457-2641 (international) and
mention ID code: TOWER. Callers in Israel are invited to call locally, at
03-918-0610. The conference call also will be Webcast live at
www.companyboardroom.com and at www.towersemi.com. The call will be available on
both Web sites for replay for 90 days.
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 micron; it also provides complementary technical 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 micron 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. When
complete, Fab 2 is expected to 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. 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 (512) 328 8855 +1 (212) 268 1816 +1 (408) 330 6871
lass@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)
JUNE 30, DECEMBER 31,
--------- ---------
2004 2003
--------- ---------
A S S E T S
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 19,115 $ 12,448
SHORT-TERM INTEREST-BEARING DEPOSITS -- --
CASH AND SHORT-TERM INTEREST-BEARING DEPOSITS
DESIGNATED FOR INVESTMENTS RELATING TO FAB 2 42,279 44,042
TRADE ACCOUNTS RECEIVABLE 19,113 11,631
OTHER RECEIVABLES 20,067 11,073
INVENTORIES 25,712 19,382
OTHER CURRENT ASSETS 2,112 1,729
--------- ---------
TOTAL CURRENT ASSETS 128,398 100,305
--------- ---------
LONG-TERM INVESTMENTS
LONG-TERM INTEREST-BEARING DEPOSITS
DESIGNATED FOR INVESTMENTS RELATING TO FAB 2 4,918 4,848
OTHER LONG-TERM INVESTMENTS 6,000 6,000
--------- ---------
10,918 10,848
--------- ---------
PROPERTY AND EQUIPMENT, NET 589,271 568,412
--------- ---------
OTHER ASSETS, NET 102,094 108,770
--------- ---------
TOTAL ASSETS $ 830,681 $ 788,335
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
SHORT-TERM DEBT $ -- $ --
TRADE ACCOUNTS PAYABLE 51,082 40,249
OTHER CURRENT LIABILITIES 8,853 9,564
--------- ---------
TOTAL CURRENT LIABILITIES 59,935 49,813
LONG-TERM DEBT 461,000 431,000
CONVERTIBLE DEBENTURES 25,508 25,783
LONG-TERM LIABILITY IN RESPECT
OF CUSTOMERS' ADVANCES 45,762 46,347
OTHER LONG-TERM LIABILITIES 8,209 5,935
--------- ---------
TOTAL LIABILITIES 600,414 558,878
SHAREHOLDERS' EQUITY
ORDINARY SHARES 16,251 13,150
ADDITIONAL PAID-IN CAPITAL 517,041 427,881
PROCEEDS ON ACCOUNT OF SHARE CAPITAL -- 16,428
SHAREHOLDER RECEIVABLES (26) (26)
ACCUMULATED DEFICIT (293,927) (218,904)
--------- ---------
239,339 238,529
TREASURY STOCK, AT COST - 1,300,000 SHARES (9,072) (9,072)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 230,267 229,457
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 830,681 $ 788,335
========= =========
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data and per share data)
Six months ended Three months ended
---------------- ------------------
June 30, June 30,
2004 2003 2004 2003
--------- --------- --------- ---------
SALES $ 60,899 $ 25,471 $ 33,652 $ 12,879
COST OF SALES 104,399 37,268 54,250 19,334
--------- --------- --------- ---------
GROSS LOSS (43,500) (11,797) (20,598) (6,455)
--------- --------- --------- ---------
OPERATING COSTS AND EXPENSES
Research and development 7,256 8,656 3,751 4,799
Marketing, general and administrative 11,021 10,764 5,430 5,120
--------- --------- --------- ---------
18,277 19,420 9,181 9,919
--------- --------- --------- ---------
OPERATING LOSS (61,777) (31,217) (29,779) (16,374)
FINANCING EXPENSE, NET (13,340) (29) (6,809) (515)
OTHER INCOME, NET 94 66 56 59
--------- --------- --------- ---------
LOSS FOR THE PERIOD $ (75,023) $ (31,180) $ (36,532) $ (16,830)
========= ========= ========= =========
BASIC LOSS PER ORDINARY SHARE
(*) Loss per share $ (1.16) $ (0.70) $ (0.55) $ (0.37)
========= ========= ========= =========
- ----------
(*) Basic and diluted loss per share in accordance with U.S. GAAP would be
$1.18 and $0.56 for the six and three months ended June 30, 2004 [$0.70
and $0.37 in the six and three months ended June 30, 2003, respectively].