PHOENIX, Ariz. – April 27, 2005 – ON Semiconductor Corporation (Nasdaq: ONNN) today announced that total revenues in the first quarter of 2005 were $302.4 million, a decrease of approximately 1 percent from the fourth quarter of 2004. During the first quarter of 2005, the company reported net income of $14.8 million, or $0.04 per share, which included restructuring, asset impairments and other charges of $1.1 million. During the fourth quarter of 2004, the company reported a net loss of $88.3 million, or $0.36 per share, which included a loss on debt prepayment of $96.3 million and restructuring, asset impairments and other charges of $5.6 million.
On a mix-adjusted basis, average selling prices in the first quarter of 2005 were down approximately 2 percent from the fourth quarter of 2004. The company’s gross margin in the first quarter was 31.8 percent, a decrease of approximately 30 basis points as compared to the fourth quarter of 2004.
EBITDA for the first quarter of 2005 was $55.4 million and included $1.1 million in restructuring, asset impairments and other charges. EBITDA for the fourth quarter of 2004 was a $39.7 million deficit and included the $96.3 million loss on debt prepayment and restructuring, asset impairments and other charges of $5.6 million. A reconciliation of this non-GAAP financial measure to the company’s net income (net loss) and net cash provided by (used in) operating activities prepared in accordance with U.S. GAAP is set out in the attached schedule.
“In the first quarter of 2005, we continued our focus of maintaining gross margin levels and driving profitability,” said Keith Jackson, ON Semiconductor president and CEO. “We believe our operational execution throughout this cycle has been and continues to be superior to many of our peers. During the first quarter, we continued to work down inventory levels internally and in the distribution network, while maintaining gross margin levels above 31 percent.”
SECOND QUARTER 2005 OUTLOOK
“Based upon booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be approximately flat in the second quarter of 2005, plus or minus 2 percent,” Jackson said. “Backlog levels at the beginning of the second quarter were down slightly from backlog levels at the beginning of the first quarter of 2005, and represented approximately 80 percent of our anticipated second quarter revenues. We believe we are in a high turns environment similar to that of the first quarter. We expect that average selling prices will be down approximately 1 to 2 percent for the second quarter of 2005. We also expect cost reductions to offset the decline in average selling prices and that gross margins will be flat to slightly up in the second quarter of 2005.”
ON Semiconductor will hold a conference call for the financial community at 5 p.m. Eastern time (EDT) today to discuss the first quarter results. The company will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its website at https://www.onsemi.com. The webcast will be available for approximately 30 days following the conference call.
About ON Semiconductor
With its global logistics network and strong portfolio of power semiconductor devices, ON Semiconductor (Nasdaq: ONNN) is a preferred supplier of power solutions to engineers, purchasing professionals, distributors and contract manufacturers in the computer, cell phone, portable devices, automotive and industrial markets. For more information, please visit ON Semiconductor’s website at https://www.onsemi.com.
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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 website in this news release, such information on the website is not to be incorporated herein.
This news release includes “forward-looking statements” as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements and are often characterized by the use of words such as “believes,” “expects,” “estimates,” “projects,” “may,” “will,” “intends,” “plans,” or “anticipates,” or by discussions of strategy, plans or intentions. In this news release, forward-looking information relates to the second quarter of 2005 and its bookings trends, backlog levels, estimated turns levels, revenues, gross margins and average selling prices, and similar matters. All forward-looking statements in this news release are made based on management's current expectations and estimates, which involve risks, uncertainties and other factors that could cause results to differ materially from those expressed in forward-looking statements. Among these factors are changes in overall economic conditions, 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, availability of raw materials, competitors' actions, pricing and gross margin pressures, loss of key customers, order cancellations or reduced bookings, changes in manufacturing yields, control of costs and expenses, significant litigation, risks associated with acquisitions and dispositions, risks associated with our substantial leverage and restrictive covenants in our debt agreements, risks associated with our international operations, 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), and risks involving environmental or other governmental regulation. Additional factors that could affect the company's future operating results are described in our Form 10-K for the year ended December 31, 2004 under the caption “Trends, Risks and Uncertainties” in the MD&A section, and other factors are described from time to time in our subsequent SEC filings. Readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update such information.