Business in Brief: Tower Semiconductor Shares Plunge 13% on Earnings Report

Celltick gearing up for TASE IPO; Ace Israel IPO on the TASE running into complications from institutional investors; Liveperson shares slip slightly Monday after 9% jump on Sunday on Q1 earnings report

TowerJazz headquarters in Migdal Haemek, Israel, September 17, 2015.
TowerJazz

Tower Semiconductor shares plunge 13% on earnings report

Shares of Tower Semiconductor plummeted 13% to 85.71 shekels ($23.61) on the Tel Aviv Stock Exchange on Monday following the release of its earnings report for the 1st quarter of the year. The drop came even though the company also forecast improved revenues in the final quarter of 2018. Tower Semiconductor, which is also known as TowerJazz, reported GAAP first quarter profits of $26 million, or 26 cents a share, off 42% from the 1st quarter of last year. On average, analysts had projected profits of 38.5 cents per share. Tower’s 1st quarter revenues, $313 million, declined by 5.3% compared to 1st quarter 2017 and 12.5% compared to 4th quarter 2017. The company, which is based in Migdal Ha’emek, explained the decline as the result of seasonal factors and moves that TowerJazz took to shift its product mix to offerings with higher profitability. It forecasts organic sales growth of 25% in the 4th quarter compared to the 1st quarter of this year. (Yoram Gabison)

Celltick gearing up for TASE IPO

Celltick, a cellular technology and content firm, released a draft prospectus on Sunday in advance of an initial public offering on the Tel Aviv Stock Exchange, a move that is seen as an interim step in advance of a public offering on the Nasdaq exchange in the United States. Founded in 2000, and with offices in Herzliya, and a staff of 150, about 100 of whom are in Israel, the company’s current stakeholders include Jerusalem Venture Partners, with a 35% stake and Amadeus Capital, with a 25% share. Celltick is seeking to raise $12 to $15 million to expand the company’s operations and to penetrate the American market to a greater extent.  Although the company has generated revenues and operating profits since 2009, it is still generating net losses and has not made major inroads in the United States. It has operations in 18 countries, and most of its revenues currently come from Asia. (Guy Erez

Ace Israel IPO on the TASE running into complications from institutional investors

The interest expressed by institutional investors in the Israeli home improvement retailer Ace Auto Depot’s initial public offering in Tel Aviv has reflected a company valuation that is 35% to 40% lower than the company’s valuation of 300 to 350 million shekels ($83 million to $96 million). As a result, Kedma Capital, which has a 98% stake in the retailer, which it bought from Electra Consumer Products in March of last year, is considering scrapping the IPO. Kedma has conducted a road show in advance of the offering over the past couple of weeks and ultimately agreed to slash its valuation by 15% to 20%, but institutional investors are demanding a further cut in Ace’s valuation, pushing it under 200 million shekels. Some of the institutional investors have cited the fact that Kedma acquired control of Ace last year at a valuation of 190 million shekels in support of its argument that Kedma has pegged Ace’s value too high. The Israeli retailer, which has 29 stores and a staff of about 900, had previously been publicly traded. It has suffered years of losses in the face of competition in the sector, but has shifted its business model in recent years and has demonstrated a major improvement in its operating results. (Eran Azran)

Liveperson shares slip slightly Monday after 9% jump on Sunday on Q1 earnings report

The Israeli shares of Liveperson, the U.S.-based messaging and chat platform firm, much of whose operations are in Israel, were virtually unchanged on Monday, slipping 0.03% to 64.96 shekels ($17.92) on the Tel Aviv Stock Exchange on Monday following a 9.3% increase on Sunday. The prior day’s increase came in the wake of the release of the company’s 1st quarter earnings report, which were a pleasant surprise for analysts as the company cut its losses. The company reported a net loss of $3 million in losses, down $6 million from the same quarter a year earlier, on 1st quarter 2018 revenues of $58 million. The firm, which is traded in the United States on the Nasdaq exchange, also raised its forecast somewhat for revenues for 2018 as a whole to the $239 to $243 million range. It previously pegged the lower range of its forecast at $237 million. Based in New York City, the company maintains a technology hub in Israel. (Uri Tomer)

Tower Semiconductor shares dampen TA-35 

Shares on the Tel Aviv Stock Exchange slipped overall in Monday trading. The Tel Aviv-35 and Tel Aviv-125 indexes were pulled down by a 13% plunge in shares of Tower Semiconductor. (See story above). The blue-chip TA-35 ended the day off 0.1% at 1,474.74 points while the TA-125 dropped 0.2% to 1,334.32. The attention on share markets was directed at the sale of Frutarom to the American firm International Flavors & Fragrances for $7.1 billion. (See coverage on this page). Frutarom shares closed Monday up 2.6% at 355.00 shekels ($97.79). (Jasmin Gueta)