FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the month of May 2006 No. 2
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 17, 2006, the Registrant announced record revenues during first
quarter 2006. Attached hereto is a copy of the press release.
This Form 6-K is being incorporated by reference into all effective
registration statements filed by us under the Securities Act of 1933.
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 18, 2006 By: /s/ Nati Somekh Gilboa
--------------------------
Nati Somekh Gilboa
Corporate Secretary
TOWER SEMICONDUCTOR ANNOUNCES RECORD
REVENUES DURING FIRST QUARTER 2006
REVENUES UP 55% AND DOUBLING OF FAB 2 CUSTOMERS IN PRODUCTION AS
COMPARED TO Q1 2005
MIGDAL HAEMEK, Israel -- May 17, 2006 -- Tower Semiconductor Ltd. (NASDAQ: TSEM;
TASE: TSEM), a pure-play independent specialty foundry, today announced first
quarter 2006 results with record revenues of $35.9 million. These revenues
represent an increase of 55% over the $23.2 million reported in the first
quarter of 2005 and an increase of 15% over the $31.1 million reported in the
fourth quarter of 2005. The 2006 first quarter loss was $45.1 million, or $0.63
per share, which included depreciation and amortization expenses of $38.1
million, compared to a loss of $55.3 million, or $0.84 per share, in the first
quarter of 2005, which included depreciation and amortization expenses of $34.6
million.
Tower expects further growth in revenues for the second quarter of 2006 over the
first quarter of 17% to 25%, and guides revenues of $42 to $45 million.
"We are continuing to execute according to our growth plan and are pleased with
both the Q1 revenues, which are the highest in the company's history, and the
EBITDA growth", said Russell Ellwanger, chief executive officer, Tower
Semiconductor. "We have increased our Fab 2 customers in production base line by
a factor of greater than 2 in the past year and are facing strong demand from
both the new and existing customers. This quarter demonstrates the strength and
realization of our customers' pipeline. The board approved plan to increase Fab
2 capacity by an additional 50%, the partnership with our banks in restructuring
Tower's debt, and The Israel Corporation commitment to invest $100 million
provide very encouraging outlook for a strong 2006, where we will continue to
focus on best serving our customers and contributing to their market success."
Tower will host a conference call to discuss these results Thursday, May 18,
2006, at 11:00 a.m. Eastern Daylight Time /6 p.m. Israel time. To participate,
please call 1-866-860-9642 (U.S. toll-free number) or 972-3-918-0600
(international) and mention ID code: TOWER. Callers in Israel are invited to
call locally 03-918-0600. The conference call will also be web cast live at
www.companyboardroom.com and at www.towersemi.com and will be available
thereafter on both websites for replay for 90 days, starting at 2:00 p.m.
Eastern Daylight 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.
***
ABOUT TOWER SEMICONDUCTOR LTD.
Tower Semiconductor Ltd. is a pure-play independent specialty foundry
established in 1993. The company manufactures integrated circuits with
geometries ranging from 1.0 to 0.13-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 standard and specialized process technologies
and has a current capacity of up to 15,000 200mm wafers per month. Tower's
website is located at www.towersemi.com.
CONTACT:
Tower Semiconductor
Ilanit Vudinsky, +972 4 650 6434
ilanitvu@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 operate the company in the short-term and
raising the funds required to implement the ramp up plan and complete Fab 2,
(iii) 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, (iv) operating our
facilities at satisfactory utilization rates which is critical in order to cover
the high level of fixed costs associated with operating a foundry, (v) our
ability to satisfy certain of the covenants stipulated in our amended facility
agreement (vi) the receipt of our banks' approval of the ramp up plan for Fab 2
and the entering into and consummation of a definitive agreement with our banks
for the restructuring our debt, (vii) our ability to capitalize on increases in
demand for foundry services, (viii) 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, (ix) attracting
additional customers, (x) not receiving orders from our wafer partners,
customers and technology providers, (xi) failing to maintain and develop our
technology processes and services, (xii) competing effectively, (xiii) our large
amount of debt and our ability to repay our debt on a timely basis, (xiv)
achieving acceptable device yields, product performance and delivery times, (xv)
the timely development, internal qualification and customer acceptance of new
processes and products, (xvi) the receipt of shareholder and other approvals as
required under applicable law or otherwise, including in connection with the
potential investment by TIC and the agreement with TIC for the ordering of
equipment described above, (xvii) business interruption due to terror attacks,
earthquakes, and other acts of God and (xviii) the entering into and the
consummation of investment agreements, including the potential investment by
TIC.
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-1, 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.
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31,
--------- ---------
2006 2005
--------- ---------
A S S E T S
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 17,570 $ 7,337
DESIGNATED CASH AND SHORT-TERM INTEREST-BEARING DEPOSITS 15,126 31,661
TRADE ACCOUNTS RECEIVABLE 18,882 16,776
OTHER RECEIVABLES 8,937 9,043
INVENTORIES 28,684 24,376
OTHER CURRENT ASSETS 1,350 1,048
--------- ---------
TOTAL CURRENT ASSETS 90,549 90,241
--------- ---------
PROPERTY AND EQUIPMENT, NET 484,289 510,645
--------- ---------
OTHER ASSETS, NET 61,201 77,800
========= =========
TOTAL ASSETS $ 636,039 $ 678,686
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF LONG-TERM DEBT $ -- $ 21,103
CURRENT MATURITIES OF CONVERTIBLE DEBENTURES 5,734 6,453
TRADE ACCOUNTS PAYABLE 52,028 59,741
OTHER CURRENT LIABILITIES 8,913 8,972
--------- ---------
TOTAL CURRENT LIABILITIES 66,675 96,269
LONG-TERM DEBT 514,966 497,000
CONVERTIBLE DEBENTURES 34,429 19,358
LONG-TERM LIABILITY IN RESPECT
OF CUSTOMERS' ADVANCES 54,537 59,621
OTHER LONG-TERM LIABILITIES 10,238 11,012
--------- ---------
TOTAL LIABILITIES 680,845 683,260
--------- ---------
CONVERTIBLE DEBENTURES -- 25,493
--------- ---------
SHAREHOLDERS' DEFICIT (44,806) (30,067)
========= =========
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 636,039 $ 678,686
========= =========
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSAND, EXCEPT SHARE DATA AND PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
--------------------
2006 2005
-------- --------
REVENUES 35,875 23,167
COST OF SALES 61,280 61,214
-------- --------
GROSS LOSS (25,405) (38,047)
-------- --------
OPERATING COSTS AND EXPENSES
RESEARCH AND DEVELOPMENT 3,354 4,763
MARKETING, GENERAL AND ADMINISTRATIVE 5,324 4,528
-------- --------
8,678 9,291
======== ========
OPERATING LOSS (34,083) (47,338)
FINANCING EXPENSE, NET (11,524) (8,175)
OTHER INCOME, NET 551 193
-------- --------
LOSS FOR THE PERIOD $(45,056) $(55,320)
======== ========
BASIC AND DILUTED LOSS PER ORDINARY SHARE
Loss per share (*) $ (0.63) $ (0.84)
======== ========
WEIGHTED AVERAGE NUMBER OF ORDINARY
SHARES OUTSTANDING - IN THOUSANDS 71,872 65,700
======== ========
(*) BASIC AND DILUTED LOSS PER SHARE IN ACCORDANCE WITH U.S. GAAP FOR THE THREE
MONTHS PERIODS ENDED MARCH 31, 2006 AND MARCH 31, 2005 ARE $0.56 AND $0.84,
RESPECTIVELY.