Try our mobile app

Published: 2022-08-08 00:00:00 ET
<<<  go to TSEM company page
HTTP/1.1 200 OK HTTP/1.1 200 OK X-Crawlera-Slave: 198.154.83.183:8800 X-Crawlera-Version: 1.60.1 accept-ranges: bytes content-type: text/html last-modified: Mon, 08 Aug 2022 20:02:06 GMT server: AmazonS3 x-amz-id-2: f3bbWPwEBljNK67onbkDjZzlpRoVWzBbXkXMfrYJC3+bm9WgrmTatQSF0Q1SmkjfxiPG2DwyC7I= x-amz-meta-mode: 33188 x-amz-meta-s3cmd-attrs: uid:504/gname:fitrprnt/uname:fitrprnt/gid:504/mode:33184/mtime:1659988921/atime:1659988921/md5:ad6e4795888ea74e3bef522405b4657f/ctime:1659988922 x-amz-replication-status: COMPLETED x-amz-request-id: 0PH3B12ZFFM83AKP x-amz-version-id: A.AJjwzGc8M_f90kgwbGNyRHFkG2w_2x x-content-type-options: nosniff x-frame-options: SAMEORIGIN x-xss-protection: 1; mode=block x-akamai-transformed: 9 23166 0 pmb=mTOE,2 expires: Thu, 06 Apr 2023 01:48:34 GMT cache-control: max-age=0, no-cache, no-store pragma: no-cache date: Thu, 06 Apr 2023 01:48:34 GMT vary: Accept-Encoding akamai-x-true-ttl: -1 strict-transport-security: max-age=31536000 ; includeSubDomains ; preload set-cookie: ak_bmsc=BD192C5A3FF5B9B40772B76B37D13E6A~000000000000000000000000000000~YAAQXu/dF1mKRzGHAQAAuVJAVBM1pnR+qDL/KPGzDmK1Y1RBWm4SBNzPU3OwQMQgQn2bFw+vsgmQN2AYhoPRWQtZUblGh8uhfDAVkSNGvRMYI2fzla7fncyVSCgzd7h4pFq5HV43ck5qkNSA6xnDonIWqWMtjrwshN9KAxM02aJyyScYcuzPlCnIny/m8REbCV2/cLAziLsAit9G7B0+x2qpx5IROBm6kpyKXh4nhx4uWWlxlnRv9U4psNykZfMArzJpWSNmOHXOFHXLuahm7eNJcAhSD7ooMoHdJMahQjD2ufjInm5Fq2nTaeKsMC8zX8WPbN5xUc2jb9a2RAzgfnc/QOjpD2X7ejbnTliWQ692jGs67PtCj9mqMATvk2ahYi55nr3QXBM=; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 03:48:34 GMT; Max-Age=7200; HttpOnly set-cookie: bm_mi=77DDECBEB235F83D6E75CFA03E725DC5~YAAQXu/dF1qKRzGHAQAAuVJAVBNBMfQfLqxqfTK3L37IYcjzZxFFEcxnca6qCQmuJvacWRtUUVYj6Z6xK56QCtVQfSL3sSaQYdE0TyJjqsAREp0Z/yX1am3LlFzyvwqtfAyS4UKviTnlsz+i27OSbBYcxeTNUBjNIZZfiC8YEQ08ppiWHQdPT/Rtv42DwHzEZ0Z/Ud6cb0l76xvhREvlK+V8uys+/yej80mHafRTJs3+rRVc2eR2jraz/mcNB7FC79r4nygMrczkXJMfNDFHaafWbinCymy86WCU6rQdnsuGpSQ66jtcPjbvw5mkHlWnOpW9VEF3JB4T0HaQasPvxR76xp2pp46pDKnc5J4/j7lTDLXxn6dS99LMsz7BfobA8TeKbTxX7U4=~1; Domain=.sec.gov; Path=/; Expires=Thu, 06 Apr 2023 01:48:34 GMT; Max-Age=0; Secure Transfer-Encoding: chunked Proxy-Connection: close Connection: close TOWER SEMICONDUCTOR LTD - 928876 - 2022
0000928876 2021-12-31 0000928876us-gaap:NoncontrollingInterestMember 2021-12-31 0000928876us-gaap:TreasuryStockMember 2021-12-31 0000928876us-gaap:RetainedEarningsMember 2021-12-31 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2021-12-31 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2021-12-31 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2021-12-31 0000928876us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0000928876us-gaap:CommonStockMember 2021-12-31 0000928876 2022-01-01 2022-06-30 0000928876us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-06-30 0000928876us-gaap:CommonStockMember 2022-01-01 2022-06-30 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2022-01-01 2022-06-30 0000928876us-gaap:NoncontrollingInterestMember 2022-01-01 2022-06-30 0000928876us-gaap:ComprehensiveIncomeMember 2022-01-01 2022-06-30 0000928876us-gaap:RetainedEarningsMember 2022-01-01 2022-06-30 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2022-01-01 2022-06-30 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2022-01-01 2022-06-30 0000928876 2022-06-30 0000928876us-gaap:NoncontrollingInterestMember 2022-06-30 0000928876us-gaap:TreasuryStockMember 2022-06-30 0000928876us-gaap:RetainedEarningsMember 2022-06-30 0000928876us-gaap:AccumulatedTranslationAdjustmentMember 2022-06-30 0000928876tsem:AccumulatedOtherComprehensiveIncomeExcludingForeignCurrencyMember 2022-06-30 0000928876us-gaap:DeferredCompensationShareBasedPaymentsMember 2022-06-30 0000928876us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0000928876us-gaap:CommonStockMember 2022-06-30 0000928876currency:JPYtsem:TpsCoMemberus-gaap:SubsequentEventMember 2022-07-01 0000928876tsem:TpsCoMemberus-gaap:SubsequentEventMember 2022-07-01 0000928876currency:JPYtsem:TpsCoMember 2022-06-30 0000928876tsem:TpsCoMember 2022-06-30 0000928876tsem:WellsFargoCapitalFinanceMemberus-gaap:SubsequentEventMembertsem:TsnbCreditLineAgreementMember 2022-07-14 0000928876tsem:TsnbCreditLineAgreementMember 2022-06-30 0000928876 2021-01-01 2021-06-30 0000928876 2022-04-01 2022-06-30 0000928876 2021-04-01 2021-06-30 0000928876 2020-12-31 0000928876 2021-06-30 0000928876tsem:DefinitiveAgreementMember 2022-02-01 2022-02-15 xbrli:pure xbrli:shares iso4217:USD iso4217:USDxbrli:shares iso4217:JPY

Exhibit 99.1

 

TOWER SEMICONDUCTOR LIMITED
AND SUBSIDIARIES
 
UNAUDITED CONDENSED INTERIM
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
 
 
TOWER SEMICONDUCTOR LIMITED AND SUBSIDARIES
 
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022
 
 
Page
   
F-2
   
F-3
   
F-4
   
F-5
   
F-6 - F-7
   
F-8 - F-9
 
TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)

 

   
As of
  
   
June 30,
    
December 31,
  
   
2022
    
2021
  
             
ASSETS
            
CURRENT ASSETS
            
Cash and cash equivalents
  
$
211,177
    
$
210,930
  
Short-term deposits
    
468,298
      
363,648
  
Marketable securities (*)
    
176,487
      
190,068
  
Trade accounts receivable
    
170,552
      
142,228
  
Inventories
    
249,038
      
234,512
  
Other current assets
    
43,253
      
54,817
  
Total current assets
    
1,318,805
      
1,196,203
  
LONG-TERM INVESTMENTS
    
26,544
      
39,597
  
PROPERTY AND EQUIPMENT, NET
    
878,991
      
876,683
  
GOODWILL AND OTHER INTANGIBLE ASSETS, NET
    
16,217
      
18,820
  
DEFERRED TAX AND OTHER LONG-TERM ASSETS, NET
    
83,866
      
99,938
  
TOTAL ASSETS
  
$
2,324,423
    
$
2,231,241
  
LIABILITIES AND SHAREHOLDERS' EQUITY
                
CURRENT LIABILITIES
                
Current maturities of long-term debt
  
$
79,535
    
$
83,868
  
Trade accounts payable
    
127,762
      
78,712
  
Deferred revenue and customers' advances
    
38,632
      
39,992
  
Employee related liabilities
    
61,831
      
57,747
  
Other current liabilities
    
38,415
      
16,009
  
Total current liabilities
    
346,175
      
276,328
  
LONG-TERM DEBT
    
200,726
      
230,972
  
LONG-TERM CUSTOMERS' ADVANCES
    
60,600
      
69,968
  
EMPLOYEE RELATED LIABILITIES
    
13,962
      
14,622
  
DEFERRED TAX AND OTHER LONG-TERM LIABILITIES
   
14,410
      
23,962
  
TOTAL LIABILITIES
    
635,873
      
615,852
  
THE COMPANY'S SHAREHOLDERS' EQUITY
    
1,705,271
      
1,622,007
  
Non-controlling interest
    
(16,721
)
    
(6,618
)
TOTAL SHAREHOLDERS' EQUITY
    
1,688,550
      
1,615,389
  
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
  
$
2,324,423
    
$
2,231,241
  
 
(*) Marketable securities are available-for-sale securities; the amortized cost of such marketable securities of $184,257 and $189,543 as of June 30, 2022 and December 31, 2021, respectively, is presented net of an immaterial allowance for credit losses.
 
See notes to consolidated financial statements.

 

F - 2

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(dollars and shares in thousands, except per share data)

 

   
Six months ended June 30,
    
Three months ended June 30,
  
   
2022
    
2021
    
2022
    
2021
  
REVENUES
  
$
847,300
    
$
709,352
    
$
426,168
    
$
362,138
  
COST OF REVENUES
    
630,229
      
565,783
      
313,728
      
288,383
  
GROSS PROFIT
    
217,071
      
143,569
      
112,440
      
73,755
  
OPERATING COSTS AND EXPENSES:
                                
Research and development
    
40,799
      
41,424
      
20,481
      
21,081
  
Marketing, general and administrative
    
42,538
      
35,662
      
21,285
      
18,671
  
     
83,337
      
77,086
      
41,766
      
39,752
  
                                 
OPERATING PROFIT
    
133,734
      
66,483
      
70,674
      
34,003
  
FINANCING AND OTHER EXPENSE, NET
    
(10,295
)
    
(8,326
)
    
(8,162
)
    
(484
)
PROFIT BEFORE INCOME TAX
    
123,439
      
58,157
      
62,512
      
33,519
  
INCOME TAX BENEFIT (EXPENSE), NET
    
(9,492
)
    
3,674
      
(4,339
)
    
(2,202
)
NET PROFIT
    
113,947
      
61,831
      
58,173
      
31,317
  
Net income attributable to non-controlling interest
    
(1,837
)
    
(2,643
)
    
(96
)
    
(451
)
NET PROFIT ATTRIBUTABLE TO THE COMPANY
  
$
112,110
    
$
59,188
    
$
58,077
    
$
30,866
  
BASIC EARNINGS PER SHARE
                                
Earnings per share
  
$
1.03
    
$
0.55
    
$
0.53
    
$
0.29
  
Weighted average number of shares
    
109,037
      
107,992
      
109,138
      
108,043
  
DILUTED EARNINGS PER ORDINARY SHARE:
                          
Earnings per share
  
$
1.01
    
$
0.54
    
$
0.53
    
$
0.28
  
Net profit used for diluted earnings per share
  
$
112,110
    
$
59,188
    
$
58,077
    
$
30,866
  
Weighted average number of ordinary shares outstanding used for diluted earnings per share
    
110,561
      
109,545
      
110,561
      
109,629
  
 
See notes to consolidated financial statements.
            

 

F - 3

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(dollars in thousands)

 

   
Six months ended June 30,
    
Three months ended June 30,
  
   
2022
    
2021
    
2022
    
2021
  
Net profit
  
$
113,947
    
$
61,831
    
$
58,173
    
$
31,317
  
Other comprehensive income, net of tax:
                          
Foreign currency translation adjustment
    
(25,206
)
    
(9,741
)
    
(16,921
)
    
1,209
  
Change in employees plan assets
   and benefit obligations, net of taxes
    
(20
)
    
(100
)
    
(10
)
    
(50
)
Unrealized gain (loss) on derivatives
    
(14,922
)
    
(523
)
    
(8,151
)
    
1,134
  
Comprehensive income
    
73,799
      
51,467
      
33,091
      
33,610
  
Comprehensive loss (income) attributable
   to non-controlling interest
    
(1,837
)
    
2,021
      
(96
)
    
(552
)
Comprehensive income attributable to the Company
  
$
71,962
    
$
53,488
    
$
32,995
    
$
33,058
  
 
See notes to consolidated financial statements.
        

 

F - 4

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)

(dollars and share data in thousands)

 
   
THE COMPANY'S SHAREHOLDERS' EQUITY
                    
                           
Accumulated
    
Foreign
                                
   
Ordinary
    
Ordinary
    
Additional
          
other
    
currency
                      
Non
        
   
shares
    
shares
    
paid-in
    
Unearned
    
comprehensive
    
translation
    
Accumulated
    
Treasury
    
Comprehensive
    
controlling
        
   
issued
    
amount
    
capital
    
compensation
    
loss
    
adjustments
    
deficit
    
stock
    
income
    
interest
    
Total
  
BALANCE AS OF JANUARY 1, 2022
    
108,970
    
$
435,453
    
$
1,389,051
    
$
149,906
    
$
(412
)
  
$
(27,471
)
  
$
(315,448
)
  
$
(9,072
)
        
$
(6,618
)
  
$
1,615,389
  
Changes during the period:
                                                                                      
Exercise of options and RSUs
    
402
      
1,812
      
(1,768
)
                                                          
44
  
Employee stock-based compensation
                            
11,258
                                                    
11,258
  
Other comprehensive income:
                                                                                      
Profit
                                                    
112,110
            
$
112,110
      
1,837
      
113,947
  
Foreign currency translation adjustments
                                            
(25,206
)
                    
(25,206
)
    
(11,940
)
    
(37,146
)
Change in employees plan assets and benefit obligations
                                    
(20
 )                             (20 )             (20 )
Unrealized loss on derivatives
                                    
(14,922
)
                            
(14,922
)
            
(14,922
)
Comprehensive income
                                                                  
$
71,962
                  
BALANCE AS OF JUNE 30, 2022
    
109,372
    
$
437,265
    
$
1,387,283
    
$
161,164
    
$
(15,354
)
  
$
(52,677
)
  
$
(203,338
)
  
$
(9,072
)
          
$
(16,721
)
  
$
1,688,550
  
OUTSTANDING SHARES, NET OF TREASURY STOCK
AS OF JUNE 30, 2022
    
109,285
                                                                                  
 

See notes to consolidated financial statements.

 

F - 5

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

 
   

Six months ended June 30,

  

 

 

2022

 

 

2021

 

CASH FLOWS - OPERATING ACTIVITIES

                

Net profit for the period

 

$

113,947

 

 

$

61,831

 

Adjustments to reconcile net profit for the period to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Income and expense items not involving cash flows:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

137,787

 

 

 

127,535

 

Effect of exchange rate differences

 

 

946

 

 

 

(1,994

)

Other expense (income), net

 

 

1,907

 

 

 

(3,227

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Trade accounts receivable

 

 

(31,603

)

 

 

12,722

 

Other current assets

 

 

10,519

 

 

 

(8,983

)

Inventories

 

 

(28,958

)

 

 

(15,484

)

Trade accounts payable

 

 

53,010

 

 

 

(14,568

)

Deferred revenue and customers' advances

 

 

(10,646

)

 

 

16,207

 

Employee related liabilities and other current liabilities

 

 

26,077

 

 

 

19,696

 

Long-term employee related liabilities

 

 

357

 

 

 

140

 

Deferred tax, net and other long-term liabilities

 

 

1,325

 

 

 

(13,212

)

Net cash provided by operating activities

 

 

274,668

 

 

 

180,663

 

CASH FLOWS - INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Investments in property and equipment, net

 

 

(130,217

)

 

 

(105,599

)

Investments in marketable securities and other assets, net

 

 

(94,745

)

 

 

(18,666

)

Net cash used in investing activities

 

 

(224,962

)

 

 

(124,265

)

CASH FLOWS - FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Exercise of options, net

 

 

44

 

 

 

364

 

Loans repayment

 

 

-

 

 

 

(11,163

)

Principal payments on account of capital lease obligation

 

 

(17,778

)

 

 

(17,903

)

Debentures repayment

 

 

(20,972

)

 

 

(20,078

) 

Net cash used in financing activities

 

 

(38,706

)

 

 

(48,780

)

EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGE

 

 

(10,753

)

 

 

(3,546

) 
                 

INCREASE IN CASH AND CASH EQUIVALENTS

 

 

247

 

 

 

4,072

 

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD

 

 

210,930

 

 

 

211,683

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

 

$

211,177

 

 

$

215,755

 

 

See notes to consolidated financial statements.

 

F - 6

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

 
   

Six months ended June 30,

  
   

2022

    

2021

  

NON-CASH ACTIVITIES:

              

Investments in property and equipment

  

$

82,526

    

$

74,142

  

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

                

Cash received during the period from interest, net

  

$

1,495

    

$

769

  

Cash paid during the period for income taxes, net

  

$

8,718

 

  

$

5,016

  
 

See notes to consolidated financial statements.

 

F - 7

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS AS OF JUNE 30, 2022

(dollars in thousands, except per share data)

 

NOTE 1 - GENERAL

 

Basis for Presentation

 

The unaudited condensed interim consolidated financial statements of Tower Semiconductor Ltd. (“Tower” or “the Company”) as of June 30, 2022 include the financial statements of Tower and (i) its wholly-owned subsidiary Tower US Holdings Inc., the sole owner of: (1) Tower Semiconductor NPB Holdings, Inc. and its wholly-owned subsidiary, Tower Semiconductor Newport Beach, Inc. and (2) Tower Semiconductor San Antonio, Inc. (ii) its 51% owned subsidiary, Tower Partners Semiconductor Co., Ltd. (“TPSCo”) and (iii) its wholly-owned subsidiary, Tower Semiconductor Italy S.r.l. (“TSIT”). Tower and its subsidiaries are collectively referred to as the “Company”.

 

The Company’s unaudited condensed interim consolidated financial statements are presented after elimination of inter-company transactions and balances and are presented in accordance with U.S. generally accepted accounting principles (“US GAAP”).

 

The unaudited condensed interim consolidated financial statements of the Company should be read in conjunction with the audited consolidated financial statements of the Company as of December 31, 2021 and for the year then ended, including the notes thereto. 

 

In the opinion of the Company's management, the unaudited condensed interim consolidated financial statements include all adjustments necessary for a fair presentation of the Company’s financial position as of the dates presented and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results to be expected on a full-year basis.
 

NOTE 2 -   INITIAL ADOPTION OF NEW STANDARDS

 

During the period there was no initial adoption of new accounting standards.
 

NOTE 3 -   RECENT DEVELOPMENTS

 

On February 15, 2022, Intel Corporation (“Intel”) and Tower announced the signing of a definitive agreement under which Intel will acquire all of Tower’s outstanding Ordinary Shares for cash consideration of $53 per share. The transaction was approved by the boards of directors of both Intel and Tower, by Tower’s shareholders and is subject to certain regulatory approvals and customary closing conditions.

 

As part of the agreement between the Company, Nuvoton Technology Corporation Japan (“NTCJ”) and TPSCo, it has been decided to re-organize and re-structure operations in Japan such that, while operations at the Uozu and Tonami facilities will remain unchanged, the Arai manufacturing factory, which manufactured products solely for NTCJ and was not serving the Company’s customers, ceased operations effective June 30, 2022. The Company evaluated the need for impairment and concluded there was no material impairment to its long-lived assets as of June 30, 2022. All other restructuring related costs will be reported as incurred.

 

F - 8

TOWER SEMICONDUCTOR LTD. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS AS OF JUNE 30, 2022

(dollars in thousands, except per share data)

 

NOTE 4 -   SUBSEQUENT EVENTS
 

On July 1, 2022, the Company’s affiliates, including TPSCo, have extended their existing capital lease lines with JA Mitsui Leasing, Ltd., described in Note 11D to the Company’s annual financial statements as of December 31, 2021, whereby the ability to utilize such lines was extended by one year to mature in June 2023 with an increased remaining amount available for future utilization, totaling up to approximately JPY 7 billion  (approximately $50,000 as of July 1, 2022), as compared to approximately JPY 3.5 billion prior to such extension (approximately $25,000 as of June 30, 2022). The lease agreements’ terms did not change and contain annual interest rates of approximately 2%.

 

On July 14, 2022, TSNB entered into an agreement with Wells Fargo Capital Finance, part of Wells Fargo & Company (“Wells Fargo”), under which it extended its secured asset-based revolving credit line in the total amount of up to $70,000, to mature in September 2023, under substantially similar terms as the terms and conditions of the line described in Note 11F to the Company’s annual financial statements as of December 31, 2021. As of June 30, 2022, no loan amounts were outstanding under the TSNB Credit Line Agreement and the borrowing availability under the TSNB Credit Line Agreement was approximately $54,000, of which approximately $1,000 was utilized through letters of credit.
 

F - 9