For the fourth quarter of 2011, highlights include:
For 2011, highlights include:
PHOENIX, Ariz. – Feb. 8, 2012 – ON Semiconductor Corporation (Nasdaq: ONNN) today announced that total revenues in the fourth quarter of 2011 were $767.9 million, a decrease of approximately 14 percent from the third quarter of 2011. During the fourth quarter of 2011, as previously indicated, the company was negatively impacted from the flood in Thailand. During the fourth quarter of 2011, the company reported a GAAP net loss of $8.8 million, or $0.02 per fully diluted share. The fourth quarter 2011 GAAP net loss was impacted by $67.2 million of special items which include restructuring, asset impairment and other charges, which were primarily related to the Thailand flood and charges associated with the convertible notes exchange. The complete special item details can be found in the attached schedules.
Fourth quarter 2011 non-GAAP net income was $58.4 million, or $0.13 per share on a fully diluted basis. Third quarter 2011 non-GAAP net income was $110.5 million, or $0.24 per share on a fully diluted basis. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release, such as non-GAAP gross margin and adjusted EBITDA) to the company’s most directly comparable measures prepared in accordance with U.S. GAAP are set forth in the attached schedules and on our website at https://www.onsemi.com/.
On a mix-adjusted basis, average selling prices for ON Semiconductor in the fourth quarter of 2011 were down approximately two to three percent when compared to the third quarter of 2011. Total company GAAP gross margin in the fourth quarter was 31.1 percent. Total company GAAP gross margin in the fourth quarter included a net charge of approximately $13.3 million, or approximately 180 basis points, from special items including the Thailand related inventory write down. Total company non-GAAP gross margin in the fourth quarter was 32.9 percent.
Adjusted EBITDA for the fourth quarter of 2011 was $122.0 million. Adjusted EBITDA for the third quarter of 2011 was $169.9 million.
Total revenues for 2011 were a record $3.442 billion, an increase of approximately 49 percent from $2.313 billion in 2010. During 2011, the company reported GAAP net income of $11.6 million, or $0.03 per fully diluted share. The 2011 GAAP net income included net charges of $383.5 million from special items. During 2010, the company reported GAAP net income of $290.5 million, or $0.65 per fully diluted share. The 2010 GAAP net income included net charges of $105.3 million from special items. The special item details can be found in the attached schedules.
The non-GAAP net income for 2011 was $395.1 million, or $0.86 per share on a fully diluted basis. The non-GAAP net income for 2010 was $395.8 million, or $0.89 per share on a fully diluted basis.
The company’s GAAP gross margin in 2011 was 29.3 percent. GAAP gross margin in 2011 included a net charge of approximately $190.8 million, or approximately 550 basis points, from special items. Non-GAAP gross margin in 2011 was 34.8 percent. The company’s GAAP gross margin in 2010 was 41.3 percent. GAAP gross margin in 2010 included a net charge of approximately $10.4 million, or approximately 50 basis points, from special items. Non-GAAP gross margin in 2010 was 41.8 percent. The special item details can be found in the attached schedules.
“2011 was a transformational year for the company,” said Keith Jackson, ON Semiconductor president and CEO. “During the year we completed the acquisitions of SANYO Semiconductor and the CMOS Image Sensor Business Unit. We achieved record annual revenues and adjusted EBITDA in 2011 and ended the year with our highest cash, cash equivalents and short term-investments in our history at over $900 million. After a challenging second half of 2011 for the industry and ON Semiconductor, we believe that the first quarter of 2012 represents the bottom of the current semiconductor cycle.”
FIRST QUARTER 2012 OUTLOOK
“Based upon product booking trends, backlog levels and estimated turns levels, we anticipate that total ON Semiconductor revenues will be approximately $720 to $760 million in the first quarter of 2012,” Jackson said. “Backlog levels for the first quarter of 2012 represent approximately 80 to 85 percent of our anticipated first quarter 2012 revenues. We expect that average selling prices for the first quarter of 2012 will be down approximately two to three percent when compared to the fourth quarter of 2011. The non-GAAP outlook for the first quarter of 2012 includes stock-based compensation expense of approximately $8 to $10 million.”
The following table outlines ON Semiconductor’s projected first quarter of 2012 GAAP and non-GAAP outlook.
* Convertible Notes, Non-cash Interest Expense is pursuant to FASB’s Accounting Standards Codification (“ASC”) Topic 470: Debt.
About ON Semiconductor
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ON Semiconductor and the ON Semiconductor logo are registered trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders. Although the company references its Web site in this news release, such information on the Web site is not to be incorporated herein.
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included or incorporated in this document could be deemed forward-looking statements, particularly statements about the future financial performance of ON Semiconductor. These forward-looking statements are often characterized by the use of words such as “believes,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” or “anticipates,” or by discussions of strategy, plans or intentions. All forward-looking statements in this document are made based on information available to us as of the date of this release, our current expectations, forecasts and assumptions, and involve risks, uncertainties and other factors that could cause results or events to differ materially from those expressed in the forward-looking statements. Among these factors are the uncertainty surrounding natural disasters, including the ongoing impact of the flood in Thailand, including availability of historical books and financial and corporate records and data, labor and supply costs, our ability to effectively shift production to other facilities in order to maintain supply continuity for our customers, any impact on our controls and procedures, our ability to collect on insurance claims and the timing thereof, the fact that the timing of events could differ materially from those anticipated, uncertainties as to restructuring, impairment and other costs and charges including the potential for unanticipated charges not currently contemplated and our revenues and operating performance. Other factors include poor economic conditions and markets (including current credit and financial conditions), effects of exchange rate fluctuations, the cyclical nature of the semiconductor industry, changes in demand for our products, changes in inventories at our customers and distributors, technological and product development risks, enforcement and protection of our intellectual property rights and related risks, availability of raw materials, electricity, gas, water and other supply chain uncertainties, our ability to effectively shift production to other facilities in order to maintain supply continuity for our customers, variable demand and the aggressive pricing environment for semiconductor products, our ability to successfully manufacture in increasing volumes on a cost-effective basis and with acceptable quality for our current products, competitor actions including the adverse impact of competitor product announcements, pricing and gross profit pressures, loss of key customers, order cancellations or reduced bookings, changes in manufacturing yields, control of costs and expenses and realization of cost savings from restructurings and synergies, significant litigation, risks associated with decisions to expend cash reserves for various uses such as debt prepayment or acquisitions rather than to retain such cash for future needs, risks associated with acquisitions and dispositions (including from integrating and consolidating, and timely filing financial information with the Securities and Exchange Commission for, acquired businesses, such as SANYO Semiconductor, and difficulties encountered in accurately predicting the future financial performance of acquired businesses, such as SANYO Semiconductor), risks associated with our substantial leverage and restrictive covenants in our debt agreements from time to time, risks associated with our worldwide operations including foreign employment and labor matters associated with unions and collective bargaining arrangements as well as man-made and/or natural disasters such as the flooding in Thailand or the Japan earthquake and tsunami affecting our operations and finances/financials, the threat or occurrence of international armed conflict and terrorist activities both in the United States and internationally, risks and costs associated with increased and new regulation of corporate governance and disclosure standards (including pursuant to Section 404 of the Sarbanes-Oxley Act of 2002), risks related to new legal requirements and risks involving environmental or other governmental regulation. Information concerning additional factors that could cause results to differ materially from those projected in the forward-looking statements is contained in ON Semiconductor’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other of our filings with the Securities and Exchange Commission. If any of these trends, risks or uncertainties actually occurs or continues, our business, financial condition or operating results could be materially adversely affected, the trading prices of our securities could decline, and investors could lose all or part of their investment. Readers are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements should not be relied upon as representing our views as of any subsequent date and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made.