Components | August 08, 2011

TowerJazz reports record revenues for 2Q

Second quarter 2011 revenue reached USD 139.7 million, an 11% growth over second quarter 2010 revenue of USD 125.7 million and 16% growth over prior quarter.
Second quarter 2011 results summary

On a non-GAAP basis, as described and reconciled below, the second quarter 2011 gross profit was USD 59.5 million, representing a 43% gross margin. This is a 5% increase over the gross profit of USD 56.9 million, achieved in the second quarter of 2010 and 12% increase over gross profit of USD 53 million in prior quarter.

Non-GAAP operating profit increased by 6% to USD 44 million, or operating margin of 31%, when compared with operating profit of USD 41.5 million, or operating margin of 33%, as achieved in the second quarter of 2010.

On a GAAP basis, the net profit was USD 1.7 million, or USD 0.01 earnings per share, a strong improvement when compared with a net loss of USD 8.7 million, or USD 0.04 loss per share, in the second quarter of 2010.

On a non-GAAP basis, net profit was USD 46 million, representing a 33% net margin an increase of 40% over net profit of USD 33 million, representing a 26% net margin, achieved in the second quarter of 2010.

Non-GAAP net profit increased by 50% to USD 46 million, or USD 0.15 earnings per share, as compared to the USD 30 million net profit, or USD 0.11 earnings per share in the prior quarter.

Net profit for the quarter includes approximately USD 4 million net positive effect from Nishiwaki Fab acquisition, comprised of approximately USD 10 million gross gain from the acquisition, as the fair market value of the assets, net acquired exceeded the purchase price; approximately USD 6 million of related tax provisions and other expenses directly associated with this acquisition.

EBITDA for the second quarter of 2011 was USD 54 million, a year-over-year increase of 30% and 36% increase sequentially.

The Company’s cash and short-term deposits balance as of June 30, 2011 was $139 million as compared to $85 million as of June 30, 2010.

CEO Perspective

Russell Ellwanger, Chief Executive Officer, commented: “The second quarterof 2011 integrated many fantastic developments in our company. The acquisition of an operational facility in Japan was a strategic corporate directive. And now the Nishiwaki factory opens a new chapter in our Company’s history. Our substantially greater capacity will allow us to unleash much additional future growth and enable us to quickly turn our recent strong design win momentum into products, ramping quickly to volume production. The acquisition also provides us with a very strong foothold in the growing Asia-Pacific market and in Japan in particular. Just as importantly, it cements a long-term partnership with Micron, through both a three year supply agreement and through their becoming a strategic shareholder of our Company. The important steps taken in the quarter bring a surer realization of our 2014 goal of becoming a billion dollar-plus company in revenues.”

Financial Guidance

TowerJazz forecasts revenues of USD 173-183 million in the third quarter of 2011, representing a mid range growth of 32% year-over-year and 27% growth quarter- over-quarter.
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