ON Semiconductor Reports Third Quarter 2017 Results

 

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)

       
Quarter Ended Nine Months Ended

September 29,
2017

  June 30, 2017  

September 30,
2016

September 29,
2017

 

September 30,
2016

Revenue $ 1,390.9 $ 1,338.0 $ 950.9 $ 4,165.6 $ 2,645.9
Cost of revenue (exclusive of amortization shown below) 866.7   845.9   621.9   2,646.0   1,733.5  
Gross profit 524.2 492.1 329.0 1,519.6 912.4
Gross margin 37.7 % 36.8 % 34.6 % 36.5 % 34.5 %
Operating expenses:
Research and development 150.9 145.5 111.5 436.4 312.5
Selling and marketing 78.6 79.5 56.7 235.6 158.6
General and administrative 68.9 76.6 67.6 213.9 158.1
Amortization of acquisition-related intangible assets 37.3 28.6 24.7 95.0 71.9
Restructuring, asset impairments and other, net 9.7 5.9 21.8 16.1 28.7
Intangible asset impairment 1.5   1.8     7.7   2.2  
Total operating expenses 346.9   337.9   282.3   1,004.7   732.0  
Operating income 177.3   154.2   46.7   514.9   180.4  
Other (expense) income, net:
Interest expense (34.9 ) (34.7 ) (46.7 ) (108.0 ) (104.4 )
Interest income 0.7 0.5 1.4 1.8 3.8
Gain on divestiture of business 12.5 92.2 12.5 92.2
Licensing income 21.5 23.9 45.4
Loss on debt refinancing and prepayment (6.7 ) (6.3 ) (32.9 ) (6.3 )
Other expense (2.1 ) (0.7 )   (7.2 ) (3.3 )
Other (expense) income, net (9.0 ) (11.0 ) 40.6   (88.4 ) (18.0 )
Income before income taxes 168.3 143.2 87.3 426.5 162.4
Income tax provision (59.4 ) (48.8 ) (76.7 ) (144.5 ) (89.6 )
Net income 108.9 94.4 10.6 282.0 72.8
Less: Net income attributable to non-controlling interest (0.2 ) (0.5 ) (0.5 ) (1.2 ) (1.6 )
Net income attributable to ON Semiconductor Corporation $ 108.7   $ 93.9   $ 10.1   $ 280.8   $ 71.2  
Net income per common share attributable to ON Semiconductor Corporation:
Basic $ 0.26   $ 0.22   $ 0.02   $ 0.67   $ 0.17  
Diluted $ 0.25   $ 0.22   $ 0.02   $ 0.66   $ 0.17  
Weighted average common shares outstanding:
Basic 422.2   420.8   415.8   421.0   414.4  
Diluted 427.5   425.9   419.8   426.5   417.6  
 
 

 

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in millions)

 
As of

September 29,
2017

    June 30, 2017     December 31, 2016
Assets
Cash and cash equivalents $ 901.2 $ 871.6 $ 1,028.1
Receivables, net 695.6 696.4 629.8
Inventories 1,029.0 1,002.0 1,030.2
Other current assets 189.6   194.3   181.0  
Total current assets 2,815.4 2,764.3 2,869.1
Property, plant and equipment, net 2,238.2 2,215.0 2,159.1
Goodwill 916.9 924.7 924.7
Intangible assets, net 662.5 708.6 762.1
Deferred tax assets 148.8 148.4 138.9
Other assets 79.5   73.3   70.5  
Total assets $ 6,861.3   $ 6,834.3   $ 6,924.4  
Liabilities, Non-Controlling Interest and Stockholders’ Equity
Accounts payable $ 590.3 $ 546.3 $ 434.0
Accrued expenses 580.5 548.7 405.0
Deferred income on sales to distributors 109.8
Current portion of long-term debt 258.5   268.2   553.8  
Total current liabilities 1,429.3 1,363.2 1,502.6
Long-term debt 2,684.4 2,872.3 3,068.5
Deferred tax liabilities 309.1 271.3 288.9
Other long-term liabilities 203.1   208.2   186.5  
Total liabilities 4,625.9   4,715.0   5,046.5  
 
2.625% Notes, Series B - Redeemable conversion feature 32.9
 
ON Semiconductor Corporation stockholders’ equity:
Common stock 5.5 5.5 5.4
Additional paid-in capital 3,557.1 3,538.5 3,473.3
Accumulated other comprehensive loss (43.8 ) (43.8 ) (50.2 )
Accumulated deficit (178.4 ) (287.1 ) (527.3 )
Less: Treasury stock, at cost (1,128.0 ) (1,116.6 ) (1,078.0 )
Total ON Semiconductor Corporation stockholders’ equity 2,212.4 2,096.5 1,823.2
Non-controlling interest in consolidated subsidiary 23.0   22.8   21.8  
Total stockholders' equity 2,235.4   2,119.3   1,845.0  
Total liabilities and equity $ 6,861.3   $ 6,834.3   $ 6,924.4  
 
     

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND
NET CASH PROVIDED BY OPERATING ACTIVITIES
(in millions)

 

 
Quarter Ended Nine Months Ended

September
29, 2017

    June 30, 2017    

September
30, 2016

September
29, 2017

   

September
30, 2016

Net income $ 108.9 $ 94.4 $ 10.6 $ 282.0   $ 72.8
Adjusted for:
Licensing income (21.5 ) (23.9 ) (45.4 )
R&D costs related to licensing income 2.2 4.1 6.3
Restructuring, asset impairments and other, net 9.7 5.9 21.8 16.1 28.7
Intangible asset impairment 1.5 1.8 7.7 2.2
Interest expense 34.9 34.7 46.7 108.0 104.4
Interest income (0.7 ) (0.5 ) (1.4 ) (1.8 ) (3.8 )
Loss on debt refinancing and prepayment 6.7 6.3 32.9 6.3
Income tax provision 59.4 48.8 76.7 144.5 89.6
Net income attributable to non-controlling interest (0.2 ) (0.5 ) (0.5 ) (1.2 ) (1.6 )
Depreciation and amortization 127.7 116.5 83.8 358.5 244.1
Amortization of fair market value step-up of inventory 2.5 1.3 11.9 13.6 11.9
Sell-through to sell-in adjustment (59.0 )
Gain on divestiture of business (12.5 ) (92.2 ) (12.5 ) (92.2 )
Adjustment to contingent consideration (0.3 ) 0.8 (1.3 ) 2.0 (1.3 )
Third party acquisition and divestiture related costs 0.5   0.7   17.8   2.2   22.3  
Adjusted EBITDA 318.8 284.1 180.2 853.9 483.4
Increase (decrease):
Licensing income 21.5 23.9 45.4
R&D costs related to licensing income (2.2 ) (4.1 ) (6.3 )
Restructuring, asset impairments and other, net (9.7 ) (5.9 ) (21.8 ) (16.1 ) (28.7 )
Interest expense (34.9 ) (34.7 ) (46.7 ) (108.0 ) (104.4 )
Interest income 0.7 0.5 1.4 1.8 3.8
Income tax provision (59.4 ) (48.8 ) (76.7 ) (144.5 ) (89.6 )
Net income attributable to non-controlling interest 0.2 0.5 0.5 1.2 1.6
Amortization of fair market value step-up of inventory (2.5 ) (1.3 ) (11.9 ) (13.6 ) (11.9 )
Third party acquisition and divestiture related costs (0.5 ) (0.7 ) (17.8 ) (2.2 ) (22.3 )
Sell-through to sell-in adjustment 59.0
Loss (gain) on sale or disposal of fixed assets 1.0 (1.1 ) 0.4 2.8 0.6
Amortization of debt discount and issuance costs 3.8 3.9 3.4 12.2 7.4
Non-cash asset impairment charges 6.4 7.3
Write-down of excess inventories 21.2 21.4 4.4 56.8 40.1
Adjustment to contingent consideration 0.3 (0.8 ) (2.0 )
Payments for term debt modification (26.4 ) (2.4 ) (26.4 )
Non-cash share-based compensation expense 16.8 20.8 14.2 52.7 41.9
Non-cash interest on convertible notes 8.6 8.6 6.6 21.9 19.6
Change in deferred taxes 38.9 21.0 62.3 96.1 65.5
Other 0.6 0.5 2.0 2.6 (1.4 )
Changes in operating assets and liabilities (1.4 ) 45.4   58.6   (48.7 ) (27.4 )
Net cash provided by operating activities $ 328.2   $ 333.2   $ 132.7   $ 869.9   $ 351.8  
Cash flows from investing activities:
Purchases of property, plant and equipment $ (90.1 ) $ (69.0 ) $ (35.9 ) $ (211.8 ) $ (160.8 )
Proceeds from divestiture of business, net of cash transferred 20.0 104.0 20.0 104.0
Proceeds from sales of property, plant and equipment 0.3 1.6 2.1 0.4
Deposits (made) utilized for purchases of property, plant and equipment (3.2 ) 1.3 (1.3 ) (2.1 ) 0.9
Purchase of business, net of cash acquired (2,277.2 ) (0.8 ) (2,277.2 )
Cash received from escrow 23.8 23.8
Purchases of held-to-maturity securities (1.6 )
Cash placed in escrow (67.7 )
Other   0.3   0.8   0.3   1.8  
Net cash used in investing activities $ (73.0 ) $ (65.8 ) $ (2,185.8 ) $ (193.9 ) $ (2,374.8 )
Cash flows from financing activities:
Proceeds from issuance of common stock under the employee stock purchase plan $ 0.1 $ 5.4 $ 3.9 $ 11.4 $ 10.9
Proceeds from exercise of stock options 1.7 1.7 2.9 10.9 5.1
Payments of tax withholding for restricted shares (11.4 ) (0.6 ) (2.2 ) (25.0 ) (10.4 )
Repurchase of common stock (25.0 )
Proceeds from debt issuance 5.3 6.9 2,572.4 701.2 2,581.9
Purchase of convertible note hedges (144.7 )
Proceeds from issuance of warrants 85.2
Payments of debt issuance and other financing costs (3.4 ) (6.5 )
Repayment of long-term debt (220.3 ) (136.9 ) (223.6 ) (1,411.6 ) (287.6 )
Payment of capital lease obligations (1.2 ) (1.1 ) (2.8 ) (7.7 ) (12.2 )
Dividend to non-controlling shareholder of consolidated subsidiary     (1.9 )   (1.9 )
Net cash provided by (used in) financing activities $ (225.8 ) $ (124.6 ) $ 2,345.3   $ (805.3 ) $ 2,279.3  
Effect of exchange rate changes on cash and cash equivalents $ 0.2   $ (0.1 ) $ 0.2   $ 2.4   $ 6.6  
Net increase (decrease) in cash and cash equivalents $ 29.6 $ 142.7 $ 292.4 $ (126.9 ) $ 262.9
Cash and cash equivalents, beginning of period $ 871.6   $ 728.9   $ 588.1   $ 1,028.1   $ 617.6  
Cash and cash equivalents, end of period $ 901.2   $ 871.6   $ 880.5   $ 901.2   $ 880.5  
 
     

ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
ANALYSIS OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)

 
Quarter Ended Nine Months Ended

September
29, 2017

 

June 30,
2017

 

September
30, 2016

September
29, 2017

 

September
30, 2016

Reconciliation of GAAP revenue to non-GAAP revenue:
GAAP revenue $ 1,390.9 $ 1,338.0 $ 950.9 $ 4,165.6 $ 2,645.9
Special items:
a) Sell-through to sell-in adjustment       (155.1 )  
Total special items       (155.1 )  
Non-GAAP revenue $ 1,390.9   $ 1,338.0   $ 950.9   $ 4,010.5   $ 2,645.9  
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit $ 524.2   $ 492.1   $ 329.0   $ 1,519.6   $ 912.4  
Special items:
a) Expensing of appraised inventory at fair market value step up 2.5 1.3 11.9 13.6 11.9
b) Sell-through to sell-in adjustment       (59.0 )  
Total special items 2.5   1.3   11.9   (45.4 ) 11.9  
Non-GAAP gross profit $ 526.7   $ 493.4   $ 340.9   $ 1,474.2   $ 924.3  
Reconciliation of GAAP gross margin to non-GAAP gross margin:
GAAP gross margin 37.7 % 36.8 % 34.6 % 36.5 % 34.5 %
Special items:
a) Expensing of appraised inventory at fair market value step up 0.2 % 0.1 % 1.3 % 0.3 % 0.4 %
b) Sell-through to sell-in adjustment % % % (1.5 )% %
Total special items 0.2 % 0.1 % 1.3 % (1.1 )%   0.4 %
Non-GAAP gross margin 37.9 % 36.9 % 35.9 % 35.4 %   34.9 %
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses $ 346.9   $ 337.9   $ 282.3   $ 1,004.7   $ 732.0  
Special items:
a) Amortization of acquisition related intangible assets (37.3 ) (28.6 ) (24.7 ) (95.0 ) (71.9 )
b) Restructuring, asset impairments and other, net (9.7 ) (5.9 ) (21.8 ) (16.1 ) (28.7 )

c)

 

Intangible asset impairments (1.5 ) (1.8 ) (7.7 ) (2.2 )
d) Third party acquisition and divestiture related costs (0.5 ) (0.7 ) (17.8 ) (2.2 ) (22.3 )
e) R&D Costs related to licensing income (2.2 ) (4.1 )   (6.3 )  
Total special items (51.2 ) (41.1 ) (64.3 ) (127.3 ) (125.1 )
Non-GAAP operating expenses $ 295.7   $ 296.8   $ 218.0   $ 877.4   $ 606.9  
Reconciliation of GAAP operating income to non-GAAP operating income:
GAAP operating income $ 177.3   $ 154.2   $ 46.7   $ 514.9   $ 180.4  
Special items:
a) Expensing of appraised inventory at fair market value step up 2.5 1.3 11.9 13.6 11.9
b) Sell-through to sell-in adjustment (59.0 )

c)

 

Amortization of acquisition related intangible assets 37.3 28.6 24.7 95.0 71.9
d) Restructuring, asset impairments and other, net 9.7 5.9 21.8 16.1 28.7
e) Intangible asset impairments 1.5 1.8 7.7 2.2
f) Third party acquisition and divestiture related costs 0.5 0.7 17.8 2.2 22.3
g) R&D Costs related to licensing income 2.2   4.1     6.3    
Total special items 53.7   42.4   76.2   81.9   137.0  
Non-GAAP operating income $ 231.0   $ 196.6   $ 122.9   $ 596.8   $ 317.4  

Reconciliation of GAAP operating margin to non-GAAP operating margin (operating income / revenue) :

GAAP operating margin 12.7 % 11.5 % 4.9 % 12.4 % 6.8 %
Special items:
a) Expensing of appraised inventory at fair market value step up 0.2 % 0.1 % 1.3 % 0.3 % 0.4 %
b) Sell-through to sell-in adjustment % % % (1.5 )% %

c)

 

Amortization of acquisition related intangible assets 2.7 % 2.1 % 2.6 % 2.3 % 2.7 %
d) Restructuring, asset impairments and other, net 0.7 % 0.4 % 2.3 % 0.4 % 1.1 %
e) Intangible asset impairments 0.1 % 0.1 % % 0.2 % 0.1 %
f) Third party acquisition and divestiture related costs % 0.1 % 1.9 % 0.1 % 0.8 %
g) R&D Costs related to licensing income 0.2 % 0.3 % % 0.2 %

%

Total special items 3.9 % 3.2 % 8.0 % 1.9 % 5.2 %
Non-GAAP operating margin 16.6 % 14.7 % 12.9 % 14.3 % 12.0 %
Reconciliation of GAAP income before income taxes to non-GAAP income before income taxes:
GAAP income before income taxes $ 168.3   $ 143.2   $ 87.3   $ 426.5   $ 162.4  
Special items:
a) Expensing of appraised inventory at fair market value 2.5 1.3 11.9 13.6 11.9
b) Sell-through to sell-in adjustment (59.0 )

c)

 

Amortization of acquisition related intangible assets 37.3 28.6 24.7 95.0 71.9
d) Restructuring, asset impairments and other, net 9.7     5.9     21.8   16.1     28.7  
e) Intangible asset impairments 1.5 1.8 7.7 2.2
f) Third party acquisition and divestiture related costs 0.5 0.7 17.8 2.2 22.3
g) R&D Costs related to licensing income 2.2 4.1 6.3
h) Loss on debt refinancing and prepayment 6.7 6.3 32.9 6.3
i) Non-cash interest on convertible notes 8.6 8.6 6.6 21.9 19.6
j) Pre-acquisition interest expense, net 24.4 48.3
k) Adjustment to contingent consideration (0.3 ) 0.8 (1.3 ) 2.0 (1.3 )
l) Licensing income (21.5 ) (23.9 ) (45.4 )

m)

 

Gain on divestiture of business (12.5 )   (92.2 ) (12.5 ) (92.2 )
Total special items 34.7   27.9   20.0   80.8   117.7  
Non-GAAP income before income taxes $ 203.0   $ 171.1   $ 107.3   $ 507.3   $ 280.1  
Reconciliation of Net cash provided by operating activities to free cash flow:
Net cash provided by operating activities $ 328.2 $ 333.2 $ 132.7 $ 869.9 $ 351.8
Special items:
a) Purchases of property, plant and equipment (90.1 ) (69.0 ) (35.9 ) (211.8 ) (160.8 )
Total special items (90.1 ) (69.0 ) (35.9 ) (211.8 ) (160.8 )
Free cash flow $ 238.1   $ 264.2   $ 96.8   $ 658.1   $ 191.0  

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 | 7  Next Page »



© 2024 Internet Business Systems, Inc.
670 Aberdeen Way, Milpitas, CA 95035
+1 (408) 882-6554 — Contact Us
ShareCG™ is a trademark of Internet Business Systems, Inc.

Report a Bug Report Abuse Make a Suggestion About Privacy Policy Contact Us User Agreement Advertise