Guides 15% Year Over Year Revenue Growth for t he First Quarter of 2021;
Expecting Q uarterly Sequential Growth Throughout 2021

Initiated 200mm and 300mm Capacity Expansion to Answer the Exceeding Demand Forecast

MIGDAL HAEMEK, Israel, Feb. 17, 2021 (GLOBE NEWSWIRE) -- Tower Semiconductor (NASDAQ: TSEM & TASE: TSEM) reported today its results for the fourth quarter and for the full year ended December 31, 2020.

Highlights

• Fourth quarter revenues of $345 million, reflecting 11% quarter over quarter and 13% year over year growth.
• Organic revenue growth of 20% quarter over quarter and 17% year over year.
• Significant increases in the fourth quarter of 2020 in gross profit, operating profit, EBITDA and net profit, as compared to both prior quarter and the fourth quarter of 2019.
• Revenues for the full year 2020 of $1.266 billion, reflecting 3% total growth and 5% year over year organic growth.
• Revenue guidance for the first quarter of 2021 of $345 million, with an upward or downward range of 5%. Mid-range guidance represents year over year growth of 15% total and 20% organic.
• Expects sequential quarterly revenue growth through 2021.  
• Announcing capacity expansion for 200mm and 300mm to answer the exceeding demand forecast.
  

Fourth Quarter Results Overview

Revenues for the fourth quarter of 2020 were $345 million, reflecting 11% growth as compared to $310 million in the prior quarter and 13% growth as compared to $306 million in the fourth quarter of 2019. Organic revenue, defined as total revenue excluding revenues from Nuvoton Japan (previously named Panasonic Semiconductor Japan) and from Maxim in the San Antonio fab, grew by 20% quarter over quarter and by 17% year over year.

G ross profit for the fourth quarter of 2020 was $70 million, 30% higher than $53 million in the prior quarter and 27% higher than $55 million in the fourth quarter of 2019.

O perating profit for the fourth quarter of 2020 was $33 million as compared to $19 million both in the prior quarter and in the fourth quarter of 2019.

Net profit for the fourth quarter of 2020 was $31 million, or $0.29 basic earnings per share and $0.28 diluted earnings per share, as compared to net profit of $15 million, or $0.14 basic and diluted earnings per share in the prior quarter, and $21 million or $0.19 basic and diluted earnings per share in the fourth quarter of 2019.

EBITDA for the fourth quarter of 2020 was $96 million, $17 million higher as compared to $79 million in the prior quarter and $21 million higher as compared to $75 million in the fourth quarter of 2019.

Cash flow generated from operating activities in the fourth quarter of 2020 was $73 million with investment in fixed assets of $64 million that included payments related to the 300mm facility capacity expansion program. In addition, in the fourth quarter of 2020, the company repaid $8 million of its debt.

Manufacturing Expansion and Capabilities
Driven by very high confidence in customers’ demand which exceeds current 200mm and 300mm capacity, the Company is announcing it will invest an additional $150 million in the coming 12 months to purchase machinery and other fixed assets, in order to increase its manufacturing capacity, mostly in Fab2 in Israel, Fab9 in Texas (US), Fab5 in Tonami (Japan) and Fab7 in Uozu (Japan). This equipment will begin to have incremental revenue impact during the second half of 2021, targeted to be fully qualified during the first quarter of 2022.

During the fourth quarter of 2020, the Company (through TPSCo) has extended its Japanese buildings and facilities’ lease contract to continue its lease at least through 2032.

Business Outlook
Tower Semiconductor guides revenue for the first quarter of 2021 to be $345 million, with an upward or downward range of 5%. Mid-range guidance represents 15% growth year over year with 20% organic revenue growth. The Company expects sequential quarterly revenue growth through 2021.

Mr. Russell Ellwanger, Chief Executive Officer of Tower Semiconductor, commented: “We enter 2021 from a good place, namely a fourth quarter 2020 revenue of $345 million, representing 20% quarter over quarter organic growth. We voice appreciation to our worldwide employee base, who despite strong pandemic-related challenges, completed a year that not only drove this end of year growth but has enabled a 2021 with an increased customer base and overall increased demand, resulting in new exciting corporate wide growth initiatives.”

Ellwanger further commented: “Our $345 million guidance indicates the highest first quarter revenue in the company’s history, upon which we expect sequential quarterly revenue growth throughout the year. Given that customers’ forecast within every business unit, for every served segment indicate year over year increases, we are confident that 2021 will be a record revenue year for the company.”

Teleconference and Webcast
Tower Semiconductor will host an investor conference call today, Wednesday, February 17, 2021, 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 of 2020 and its outlook.

This call will be webcast and can be accessed via Tower Semiconductor’s website at www.towersemi.com or by calling 1-888-642-5032 (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 Tower Semiconductor’s website for 90 days.

The Company presents its financial statements in accordance with U.S. GAAP. The financial information included in the tables below includes unaudited condensed financial data. Some of the financial information in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, which we describe in this release as “adjusted” financial measures, are non-GAAP financial measures as defined in Regulation G and related reporting requirements promulgated by the Securities and Exchange Commission as they apply to our Company. These adjusted financial measures are calculated excluding one or both of the following: (1) amortization of acquired intangible assets and (2) compensation expenses in respect of equity grants to directors, officers, and employees. These adjusted financial measures should be evaluated in conjunction with, and are not a substitute for, GAAP financial measures. The tables also present the GAAP financial measures, which are most comparable to the adjusted financial measures, as well as a reconciliation between the adjusted financial measures and the comparable GAAP financial measures. As used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, as well as calculated in the tables herein, the term Earnings Before Interest Tax Depreciation and Amortization (EBITDA) consists of net profit in accordance with GAAP, excluding financing and other income (expense), net, taxes, non-controlling interest, depreciation and amortization expense and stock-based compensation expense. EBITDA is reconciled in the tables below from GAAP operating profit. EBITDA is not a required GAAP financial measure and may not be comparable to a similarly titled measure employed by other companies. EBITDA and the adjusted financial information presented herein and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, should not be considered in isolation or as a substitute for operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP. The term Net Cash, as used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, is comprised of cash, cash equivalents, short-term deposits and marketable securities less debt amounts as presented in the balance sheets included herein. The term Net Cash is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for cash, debt, operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP. The term Free Cash Flow, as used and/ or presented in this release and/ or in related public disclosures or filings with respect to the financial statements and/ or results of the Company, is calculated to be net cash provided by operating activities (in the amounts of $ 73 million, $6 9 million and $ 72 million for the three months periods ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively and $ 277 million and $ 291 million for the year s ended December 31, 2020 and December 31, 2019, respectively ) less cash used for investments in property and equipment, net (in the amounts of $ 64 million, $6 7 million and $ 4 4 million for the three months periods ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively and $257 million and $172 million for the years ended December 31, 2020 and December 31, 2019, respectively) . The term Free Cash Flow is not a required GAAP financial measure, may not be comparable to a similarly titled measure employed by other companies and should not be considered in isolation or as a substitute for operating profit, net profit or loss, cash flows provided by operating, investing and financing activities, per share data or other profit or cash flow statement data prepared in accordance with GAAP .