Tower Semiconductor Ltd. (NASDAQ:TSEM) Q1 2019 Earnings Conference Call Transcript

May 15, 2019 • 10:00 am ET


Tower Semiconductor Ltd. (NASDAQ:TSEM) Q1 2019 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to TowerJazz First Quarter 2019 Results Conference Call. All participants are currently present in a listen-only mode. Following management's prepared statements, instructions will be given for the question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded, May 15th 2019. Joining us today are Mr. Russell Ellwanger, TowerJazz's CEO, and Mr. Oren Shirazi, CFO.

I would now like to turn the conference over to Ms. Noit Levy, Vice President of Investor Relations and Corporate Communications. Ms. Levy, please go ahead.

Noit Levy

Thank you and welcome to TowerJazz financial results conference call for the first quarter of 2019. Before we begin, I would like to remind you that some statements made during this call may be forward-looking and are subject to uncertainties and risk factors that could cause actual results to be different from those currently expected. These uncertainties and risk factors are fully disclosed in our Forms 20-F, F-4, F-3 and 6-K filed with the Securities and Exchange Commission as well as filings with the Israeli Securities Authority. They are also available on our website. TowerJazz assumes no obligation to update any such forward-looking statement.

Please note that the first quarter of 2019 financial results have been prepared in accordance with US GAAP. The financial tables and data in today's earnings release and in this earnings call also include certain adjusted financial information that may be considered non-GAAP financial measures under Regulation G and related reporting requirements as established with the Securities and Exchange Commission. The financial tables include a full explanation of these measures and reconciliation of these non-GAAP measures to the GAAP financial measures.

Now I'd like to turn the call to our CEO, Mr. Russell Ellwanger. Russell, please go ahead.

Russell Ellwanger

Thank you, Noit. Welcome to our first quarter of 2019 results conference call, and thank you for your interest in our business. Revenue for the first quarter of 2019 was at our guidance at $310 million, EBITDA was $79 million, and net profit was $26 million, with our cash from operations for the quarter being $75 million, of which $33 million was free cash flow. This profit and cash generation continue to strengthen our balance sheet with record shareholders' equity of almost $1.3 billion. We remain contributing to be in the strongest financial situation we have ever been in with open doors that we are exploring which were not available in years past. We look forward to further leveraging our strength and potential to increase value at TowerJazz that will last.

Looking ahead, through 2019, the semiconductor market remains soft. Macroeconomic uncertainties have led our customers to drive tighter inventory management, in particular, we have seen a pullback in high-end optical for data centers, some families of discrete components and also for industrial vision sensors used in high volume manufacturing lines. However, the indications we see in the broad market as well as from specific customers are for a stronger second half. We see a broader set of