Second quarter financial results were released today from Israel-based Tower Semiconductor (NASDAQ: TSEM), showing high revenues, a plan for debt reduction and reflecting the company’s purchase of Jazz Technologies.
Tower achieved revenue of $58.1 million in the second quarter, slightly above company projections. That compares to $57.6 in the 1st quarter and $57.1 million in the same quarter last year.
Tower is also aggressively pursuing ways to restructure cash flow and debt. These moves include:
– A cost reduction plan expected to result in about $40 million annual savings
– Decreased net loss in the first six months of 2008 by $13 million, year-over-year
– The signing of a Memorandum of Understanding to significantly improve balance sheet and financial position, by lowering debt $250 million and increasing shareholders equity by a similar amount
“Over the past few years, Tower has substantially improved its revenue and operational results as evidenced by becoming the number one revenue growth foundry for 2007 over 2005,” said Russell Ellwanger, Tower’s chief executive officer. “Today’s announcement of a memorandum of understanding signed with our banks and Israel Corporation provides a much stronger corporate capital structure from which we can continue this momentum. We expect that these financial improvements combined with the expected closing of the Jazz merger will maintain our growth trajectory.”
Jazz will hold a special meeting for shareholders on Sept. 17 to vote on, adopt and approve the proposed transaction, with the closing of the transaction expected to occur prior to the end of the third quarter of 2008.
Tower Semiconductor Ltd. is an independent specialty foundry that delivers customized solutions in advanced CMOS (complementary metal oxide semiconductor) technologies, including digital CMOS, mixed-signal and RF (radio frequency) CMOS, embedded non-volatile memory solutions, and more. It has two manufacturing facilities with standard and specialized process technologies ranging from 1.0- to 0.13-micron.
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