ON Semiconductor Reports Fourth Quarter and 2009 Annual Results
Wednesday, February 03, 2010 4:05:02 PM ET ON Semiconductor Corporation (ONNN ):
For the fourth quarter of 2009, highlights include:
--
Total revenues of approximately $497.1 million
--
Adjusted EBITDA of $135.4 million or approximately 27.2% of revenue
--
GAAP net income of $0.15 per fully diluted share
--
Non-GAAP net income of $0.19 per fully diluted share which includes
stock based compensation expense
--
Record cash, cash equivalents and short-term investments of $571.2
million
--
Acquired PulseCore Semiconductor for approximately $17 million in
an all-cash transaction
--
Signed definitive merger agreement to acquire California Micro
Devices
For 2009, highlights include:
--
Total revenues of approximately $1.769 billion
--
Adjusted EBITDA of $381.8 million
--
GAAP net income of $0.14 per fully diluted share
--
Non-GAAP net income of $0.38 per fully diluted share which includes
stock based compensation expense
--
Record low net debt position of approximately $362 million
ON Semiconductor Corporation (ONNN )
today announced that total revenues in the fourth quarter of 2009 were
$497.1 million, an increase of approximately 5 percent from the third
quarter of 2009. During the fourth quarter of 2009, the company reported
GAAP net income of $68.0 million, or $0.15 per fully diluted share. The
fourth quarter 2009 GAAP net income included net charges of $16.9
million, or $0.04 per fully diluted share, from special items. The
special item details can be found in the attached schedules. During the
third quarter of 2009, the company reported a GAAP net income of $29.9
million, or $0.07 per fully diluted share.
Fourth quarter 2009 non-GAAP net income was $84.9 million, or $0.19 per
share on a fully diluted basis and includes stock based compensation
expense. Stock based compensation expense was previously excluded in our
non-GAAP net income and fourth quarter 2009 outlook. We intend to
include stock based compensation expense on a go forward basis in our
non-GAAP outlook. Third quarter 2009 non-GAAP net income was $57.4
million, or $0.13 per share on a fully diluted basis and includes stock
based compensation expense. 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 www.onsemi.com.
On a mix-adjusted basis, average selling prices in the fourth quarter of
2009 were down less than one percent when compared to the third quarter
of 2009. GAAP gross margin in the fourth quarter was 39.1 percent.
Non-GAAP gross margin in the fourth quarter of 2009 was 39.9 percent
including stock based compensation expense. Stock based compensation
expense was previously excluded in our non-GAAP gross margin outlook for
the fourth quarter of 2009. GAAP gross margin in the fourth quarter
included a net charge of approximately $3.9 million, or approximately 80
basis points, from special items. The special item details can be found
in the attached schedules.
Adjusted EBITDA for the fourth quarter of 2009 was $135.4 million.
Adjusted EBITDA for the third quarter of 2009 was $110.2 million.
Total revenues for 2009 were approximately $1.769 billion, a decrease of
14 percent from approximately $2.055 billion in 2008. During 2009, the
company reported GAAP net income of $61.0 million. The 2009 GAAP net
income included net charges of $104.9 million from special items. During
2008, the company reported a GAAP net loss of $428.9 million. The 2008
GAAP net loss included net charges of $736.7 million from special items,
with the largest special item a $544.5 million non-cash goodwill
impairment. The special item details can be found in the attached
schedules.
The non-GAAP net income for 2009 was $165.9 million, or $0.38 per share
on a fully diluted basis and includes stock based compensation expense.
The non-GAAP net income for 2008 was $307.8 million, or $0.80 per share
on a fully diluted basis and includes stock based compensation expense.
The company’s GAAP gross margin in 2009 was 35.1 percent. GAAP gross
margin in 2009 included a net charge of approximately $13.8 million, or
approximately 80 basis points from special items. Non-GAAP gross margin
in 2009 was 35.9 percent including stock based compensation expense.
Stock based compensation expense was previously excluded in our non-GAAP
gross margin. The company’s GAAP gross margin in 2008 was 36.3 percent.
GAAP gross margin in 2008 included a net charge of approximately $73.1
million, or approximately 350 basis points from special items. Non-GAAP
gross margin in 2008 was 39.8 percent including stock based compensation
expense. The special item details can be found in the attached schedules.
"In 2009, ON Semiconductor was able to successfully navigate one of the
most challenging economic periods in the company’s and industry’s
history," said Keith Jackson, ON Semiconductor president and CEO.
"Through the hard work and dedication of our employees, we were able to
generate positive operating cash flow in even the most challenging
quarter of the year. During 2009, ON Semiconductor reduced its overall
gross debt by approximately $76 million and increased its cash, cash
equivalents and short-term investments by approximately $113 million. We
believe we entered 2010 in the strongest financial position in the
company’s history with over $571 million of cash, cash equivalents and
short-term investments and lowest net debt position in the company’s
history of approximately $362 million. We continue to look for
opportunities to grow our product portfolio and completed the
acquisition of California Micro Devices Corporation (CMD) on Jan. 27,
2010. CMD’s expertise in protection solutions for the high brightness
LED (HBLED) market, as well as their strengths in LC-based EMI
(electromagnetic interference) filtering and low capacitance ESD
(electrostatic discharge) protection complement our existing portfolio
of protection and lighting solutions."
FIRST QUARTER 2010 OUTLOOK
"Based upon product booking trends, backlog levels and estimated turns
levels, we anticipate that total revenues will be approximately $515 to
$525 million in the first quarter of 2010," Jackson said. "Backlog
levels at the beginning of the first quarter of 2010 were up from
backlog levels at the beginning of the fourth quarter of 2009 and
represent over 90 percent of our anticipated first quarter 2010
revenues. We expect that average selling prices for the first quarter of
2010 will be down approximately one to two percent sequentially. The
non-GAAP outlook for the first quarter of 2010 includes stock based
compensation expense of approximately $13 to $14 million. The following
table outlines our first quarter 2010 GAAP and non-GAAP outlook."
ON SEMICONDUCTOR Q1 2010 BUSINESS OUTLOOK
GAAP Special Non-GAAP****
Items ***
Revenue $515 to $525 million $515 to $525 million
Gross Margin 40.0% to 41.0% $3 million 40.5% to 41.5%
Operating Expenses $132 to $136 million $10 million $122 to $126 million
Net Interest Expense / Other Expenses $10 to $11 million $10 to $11 million
Convertible Notes, Non-cash Interest Expense* $9 million $9 million $0 million
Tax $4 million $4 million
Fully Diluted Share Count ** 445 million 445 million
* Convertible Notes, Non-cash Interest Expense are included in FASB’s
Accounting Standards Codification ("ASC") Topic 470 Debt.
** Fully diluted share count can vary for among other things, the actual
exercise of options or restricted stock units, the incremental dilutive
shares from all of the company’s convertible senior subordinated notes,
and the repurchase or the issuance of stock or the sale of treasury
shares. Please refer to the table on our website for potential changes
to the Fully Diluted Share Count.
*** Special Items can include: restructuring, asset impairments and
other, net; expensing of appraised inventory fair market value (FMV)
step up; amortization of intangibles; goodwill impairments; income tax
adjustments to approximate cash taxes; non-cash interest expense and
certain other special items as necessary.
**** Regulation G and other provisions of the securities laws regulate
the use of financial measures that are not prepared in accordance with
generally accepted accounting principles. We believe these non-GAAP
measures provide important supplemental information to investors. We use
these measures, together with GAAP measures, for internal managerial
purposes and as a means to evaluate period-to-period comparisons.
However, we do not, and you should not, rely on non-GAAP financial
measures alone as measures of our performance. We believe that non-GAAP
financial measures reflect an additional way of viewing aspects of our
operations that -- when taken together with GAAP results and the
reconciliations to corresponding GAAP financial measures that we also
provide in our releases -- provide a more complete understanding of
factors and trends affecting our business. Because non-GAAP financial
measures are not standardized, it may not be possible to compare these
financial measures with other companies’ non-GAAP financial measures,
even if they have similar names.
TELECONFERENCE
ON Semiconductor will host a conference call for the financial community
at 5:00 p.m. Eastern Time (ET) on Feb. 3, 2010 to discuss this
announcement and ON Semiconductor’s results for the 2009 fourth quarter
and annual results. The company will also provide a real-time audio
broadcast of the teleconference on the Investor Relations page of its
website at http://www.onsemi.com .
The webcast replay will be available at this site approximately one hour
following the live broadcast and will continue to be available for
approximately 30 days following the conference call. Investors and
interested parties can also access the conference call through a
telephone call by dialing (888) 546-9664 (U.S./Canada) or (973) 935-8144
(International). In order to join this conference call, you will be
required to provide the Conference ID Number -- which is 51283327.
Approximately one hour following the live broadcast, the company will
provide a dial-in replay that will continue to be available through
February 10, 2010. To listen to the teleconference replay, call
800-642-1687 (U.S./Canada) or 706-645-9291 (International). You will be
required to provide the Conference ID Number -- which is 51283327.
About ON Semiconductor
ON Semiconductor (ONNN ) is a premier supplier of high
performance, energy efficient, silicon solutions for green electronics.
The company’s broad portfolio of power and signal management, logic,
discrete and custom devices helps customers effectively solve their
design challenges in automotive,
communications, computing, consumer, industrial, LED lighting, medical,
military/aerospace and power applications. ON Semiconductor operates
a world-class, value-added supply chain and a network of manufacturing
facilities, sales offices and design centers in key markets throughout
North America, Europe, and the Asia Pacific regions. For more
information, visit http://www.onsemi.com .
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, information on
the website is not to be incorporated herein.
This document contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
related to the future financial performance of ON Semiconductor and our
ability to increase cash flow from current levels. These forward-looking
statements are based on information available to us as of the date of
this release and current expectations, forecasts and assumptions and
involve a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated by these
forward-looking statements. Such risks and uncertainties include a
variety of factors, some of which are beyond our control. In particular,
such risks and uncertainties include, but are not limited to,
difficulties encountered in integrating acquired businesses; the
variable demand and the aggressive pricing environment for semiconductor
products; dependence on our company’s ability to successfully
manufacture in increasing volumes on a cost-effective basis and with
acceptable quality for our current products; the adverse impact of
competitive product announcements; revenues and operating performance;
poor economic conditions and markets, including the current credit
markets; the cyclical nature of the semiconductor industry; changes in
demand for our products; changes in inventories at 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 leverage and restrictive covenants
in debt agreements; risks associated with international operations
including foreign employment and labor matters associated with unions
and collective bargaining agreements; 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.
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. 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.
ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
Quarter Ended Year Ended
December 31, October 2, December 31, December 31, December 31,
2009 2009 2008 (1) 2009 2008 (1)
Net revenues $ 497.1 $ 472.9 $ 488.7 $ 1,768.9 $ 2,054.8
Cost of revenues 302.5 297.1 303.0 1,148.2 1,309.3
Gross profit 194.6 175.8 185.7 620.7 745.5
Gross margin 39.1 % 37.2 % 38.0 % 35.1 % 36.3 %
Operating expenses:
Research and development 50.7 53.8 58.9 198.8 233.9
Selling and marketing 33.5 30.0 33.4 120.9 134.4
General and administrative 20.1 27.1 32.5 104.5 122.4
In-process research and development - - 9.4 - 27.1
Amortization of acquisition related intangible assets 7.2 7.3 7.0 29.0 22.9
Restructuring, asset impairments and other, net (0.7 ) 7.9 3.7 24.9 26.2
Goodwill impairment charges - - 544.5 - 544.5
Total operating expenses 110.8 126.1 689.4 478.1 1,111.4
Operating income 83.8 49.7 (503.7 ) 142.6 (365.9 )
Other income (expenses), net:
Interest expense (15.4 ) (15.8 ) (20.5 ) (64.6 ) (79.9 )
Interest income 0.1 0.1 1.4 0.8 6.9
Other (0.5 ) (1.5 ) (2.7 ) (4.7 ) (2.9 )
Gain (loss) on debt repurchase - - 3.8 (3.1 ) 3.8
Other expenses, net (15.8 ) (17.2 ) (18.0 ) (71.6 ) (72.1 )
Income (loss) before income taxes 68.0 32.5 (521.7 ) 71.0 (438.0 )
Income tax benefit (provision) 0.4 (1.9 ) (2.1 ) (7.7 ) 9.4
Net income (loss) 68.4 30.6 (523.8 ) 63.3 (428.6 )
Net income attributable to minority interest (0.4 ) (0.7 ) (0.9 ) (2.3 ) (0.3 )
Net income (loss) attributable to ON Semiconductor Corporation $ 68.0 $ 29.9 $ (524.7 ) $ 61.0 $ (428.9 )
Net income (loss) per common share attributable to ON
Semiconductor Corporation:
Basic: $ 0.16 $ 0.07 $ (1.28 ) $ 0.14 $ (1.13 )
Diluted: $ 0.15 $ 0.07 $ (1.28 ) $ 0.14 $ (1.13 )
Weighted average common shares outstanding:
Basic 426.0 423.3 409.1 420.8 379.0
Diluted: 442.9 439.1 409.1 438.1 379.0
(1) The consolidated statement of operations for
the quarter and year ended December 31, 2008 has been modified
compared to previously reported amounts to reflect the adoption of
FSP APB 14-1, "Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)," which is now included in ASC 470 Debt, and the
adoption of SFAS No. 160, "Noncontrolling Interests in Consolidated
Financial Statements - an amendment of ARB No. 51," which is now
included in ASC 810 Consolidation, during the first quarter of 2009.
ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEET
(in millions)
December 31, October 2, December 31,
2009 2009 2008 (1)
Assets
Cash, cash equivalents and short-term investments $ 571.2 $ 470.2 $ 458.7
Receivables, net 260.9 264.7 188.8
Inventories, net 269.9 264.2 335.5
Other current assets 51.5 42.7 55.5
Deferred income taxes, net of allowances 15.1 15.7 12.0
Total current assets 1,168.6 1,057.5 1,050.5
Restricted cash 5.9 - -
Property, plant and equipment, net 705.5 715.3 770.8
Goodwill 175.4 162.4 160.2
Intangible assets, net 298.7 298.7 333.4
Other assets 60.2 40.7 44.6
Total assets $ 2,414.3 $ 2,274.6 $ 2,359.5
Liabilities and Stockholders’ Equity
Accounts payable $ 172.9 $ 147.2 $ 178.2
Accrued expenses 135.5 135.1 138.4
Income taxes payable 5.0 6.7 4.1
Accrued interest 0.9 4.7 1.3
Deferred income on sales to distributors 98.8 101.6 114.1
Current portion of long-term debt 205.9 165.7 107.9
Total current liabilities 619.0 561.0 544.0
Long-term debt 727.6 729.9 901.9
Other long-term liabilities 49.3 47.5 48.1
Deferred income taxes, net of allowances 13.8 12.7 10.0
Total liabilities 1,409.7 1,351.1 1,504.0
ON Semiconductor Corporation stockholders’ equity:
Common stock 4.7 4.7 4.6
Additional paid-in capital 2,916.6 2,899.3 2,810.7
Accumulated other comprehensive loss (64.9 ) (63.9 ) (53.6 )
Accumulated deficit (1,504.4 ) (1,572.4 ) (1,565.4 )
Less: treasury stock, at cost (367.0 ) (363.4 ) (358.1 )
Total ON Semiconductor Corporation stockholders’ equity 985.0 904.3 838.2
Minority interest in consolidated subsidiaries 19.6 19.2 17.3
Total equity 1,004.6 923.5 855.5
Total liabilities and equity $ 2,414.3 $ 2,274.6 $ 2,359.5
(1) The consolidated balance sheets as of December
31, 2008 have been modified compared to previously reported amounts
to reflect the adoption of FSP APB 14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)," which is now included in ASC
470 Debt, and the adoption of SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB
No. 51," which is now included in ASC 810 Consolidation, during the
first quarter of 2009.
ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA* AND
CASH PROVIDED BY OPERATING ACTIVITIES
(in millions)
Quarter Ended Year Ended
December 31, October 2, December 31, December 31, December 31,
2009 2009 2008 (1) 2009 2008 (1)
Net income (loss) $ 68.4 $ 30.6 $ (523.8 ) $ 63.3 $ (428.6 )
Plus:
Depreciation and amortization 38.0 38.9 38.5 155.6 142.1
Interest expense 15.4 15.8 20.5 64.6 79.9
Interest income (0.1 ) (0.1 ) (1.4 ) (0.8 ) (6.9 )
Income tax (benefit) provision (0.4 ) 1.9 2.1 7.7 (9.4 )
Net income attributable to minority interest (0.4 ) (0.7 ) (0.9 ) (2.3 ) (0.3 )
Stock compensation expense 11.9 13.5 6.8 54.2 33.2
Restructuring, asset impairments and other, net (0.7 ) 7.9 3.7 24.9 26.2
Non-cash goodwill impairment - - 544.5 - 544.5
In-process research and development - - 9.4 - 27.1
(Gain) loss on debt repurchase - - (3.8 ) 3.1 (3.8 )
Expensing of appraised inventory fair market value step up 3.3 2.4 7.3 11.5 70.7
Adjusted EBITDA* 135.4 110.2 102.9 381.8 474.7
Increase (decrease):
Interest expense (15.4 ) (15.8 ) (20.5 ) (64.6 ) (79.9 )
Interest income 0.1 0.1 1.4 0.8 6.9
Income tax benefit (provision) 0.4 (1.9 ) (2.1 ) (7.7 ) 9.4
Net income attributable to minority interest 0.4 0.7 0.9 2.3 0.3
Restructuring, asset impairments, and other, net 0.7 (7.9 ) (3.7 ) (24.9 ) (26.2 )
Expensing of appraised inventory fair market value step up (3.3 ) (2.4 ) (7.3 ) (11.5 ) (70.7 )
Gain on sale or disposal of fixed assets (1.7 ) (1.8 ) (1.8 ) (3.9 ) (7.1 )
Amortization of debt issuance costs and debt discount 0.7 0.7 1.0 3.1 4.0
Provision for excess inventories 4.7 4.1 9.1 20.4 19.8
Non-cash interest expense 8.3 8.3 10.8 34.9 41.6
Cash portion of loss on debt repurchase - - - (2.4 ) -
Non-cash impairment charges 0.7 5.4 2.3 6.3 14.3
Deferred income taxes 1.6 (1.1 ) 2.8 0.7 (6.8 )
Other 2.3 (0.4 ) 1.7 0.7 2.4
Changes in operating assets and liabilities (32.6 ) (10.6 ) (16.3 ) (59.1 ) 11.1
Net cash provided by operating activities $ 102.3 $ 87.6 $ 81.2 $ 276.9 $ 393.8
(1) Certain amounts in the reconciliation of net
income to adjusted EBITDA for the quarters and year ended December
31, 2008 have been modified compared to previously reported amounts
to reflect the adoption of FSP APB 14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)," which is now included in ASC
470 Debt, and the adoption of SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB
No. 51," which is now included in ASC 810 Consolidation, during the
first quarter of 2009.
* Adjusted EBITDA represents net income (loss) before interest
expense, interest income, provision for income taxes, depreciation
and amortization expense and special items. We use the adjusted
EBITDA measure for internal managerial evaluation purposes, as a
performance metric for the vesting/releasing of performance based
equity awards, and for earning of corporate cash bonuses when
applicable. Adjusted EBITDA is a non-GAAP financial measure.
Regulation G and other provisions of the securities laws regulate
the use of financial measures that are not prepared in accordance
with generally accepted accounting principles. We believe this
measure provides important supplemental information to investors. We
use this measure, together with GAAP measures, for internal
managerial purposes and as a means to evaluate period-to-period
comparisons. However, we do not, and you should not, rely on
non-GAAP financial measures alone as measures of our performance.
We believe that non-GAAP financial measures reflect an additional
way of viewing aspects of our operations that - when taken together
with GAAP results and the reconciliations to corresponding GAAP
financial measures that we also provide in our press releases -
provide a more complete understanding of factors and trends
affecting our business. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures, even if
they have similar names.
ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
ANALYSIS OF GAAP VERSUS NON-GAAP DISCLOSURES
(in millions, except per share and percentage data)
Quarter Ended (1) Year Ended (1)
Reconciliation of GAAP gross profit to non-GAAP gross profit: December 31, October 2, December 31, December 31, December 31,
2009 2009 2008 2009 2008
GAAP gross profit $ 194.6 $ 175.8 $ 185.7 $ 620.7 $ 745.5
Special items:
a) Expensing of appraised inventory fair market value step up 3.3 2.4 7.3 11.5 70.7
b) Amortization of intangibles 0.6 0.6 0.6 2.3 2.4
Total Special items 3.9 3.0 7.9 13.8 73.1
Non-GAAP gross profit $ 198.5 $ 178.8 $ 193.6 $ 634.5 $ 818.6
Reconciliation of GAAP gross margin to non-GAAP gross margin:
GAAP gross margin 39.1 % 37.2 % 38.0 % 35.1 % 36.3 %
Special items:
a) Expensing of appraised inventory fair market value step up 0.7 % 0.5 % 1.5 % 0.7 % 3.4 %
b) Amortization of intangibles 0.1 % 0.1 % 0.1 % 0.1 % 0.1 %
Total Special items 0.8 % 0.6 % 1.6 % 0.8 % 3.6 %
Non-GAAP gross margin 39.9 % 37.8 % 39.6 % 35.9 % 39.8 %
Reconciliation of GAAP income (loss) to non-GAAP net income:
GAAP net income (loss) attributable to ON Semiconductor Corporation $ 68.0 $ 29.9 $ (524.7 ) $ 61.0 $ (428.9 )
Special items:
a) Expensing of appraised inventory fair market value step up - cost of 3.3 2.4 7.3 11.5 70.7
revenues
b) In-process research and development - - 9.4 - 27.1
c) Amortization of intangible assets - cost of revenues 0.6 0.6 0.6 2.3 2.4
d) Amortization of acquisition related intangible assets - operating 7.2 7.3 7.0 29.0 22.9
expenses
e) Restructuring, asset impairments and other, net (0.7 ) 7.9 3.7 24.9 26.2
f) Goodwill impairment charges - - 544.5 - 544.5
g) (Gain) loss on debt prepayment - - (3.8 ) 3.1 (3.8 )
h) Non-cash interest expense 8.3 8.3 10.8 34.9 41.6
i) Cash taxes (1.8 ) 1.0 0.4 (0.8 ) 5.1
Total Special items 16.9 27.5 579.9 104.9 736.7
Non-GAAP net income $ 84.9 $ 57.4 $ 55.2 $ 165.9 $ 307.8
Non-GAAP net income per share:
Basic $ 0.20 $ 0.14 $ 0.13 $ 0.39 $ 0.81
Diluted $ 0.19 $ 0.13 $ 0.13 $ 0.38 $ 0.80
Weighted average common shares outstanding:
Basic 426.0 423.3 409.1 420.8 379.0
Diluted: 442.9 439.1 411.2 438.1 382.9
Total share-based compensation expense, related to the Company’s
stock options, restricted stock units, restricted stock awards and
employee stock purchase plan is included below.
Quarter Ended Year Ended
December 31, October 2, December 31, December 31, December 31,
2009 2009 2008 2009 2008
Cost of revenues $ 3.1 $ 3.5 $ 1.5 $ 13.7 $ 8.8
Research and development 2.5 2.7 1.5 10.7 5.7
Selling and marketing 1.9 2.1 1.1 8.8 5.3
General and administrative 4.4 5.2 2.7 21.0 13.4
Total share-based compensation expense $ 11.9 $ 13.5 $ 6.8 $ 54.2 $ 33.2
(1) Certain amounts may not total due to rounding of individual
components.
(2) Certain amounts for the quarter and year ended December 31,
2008 have been modified compared to previously reported amounts to
reflect the adoption of FSP APB 14-1, "Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)," which is now included in ASC
470 Debt, and the adoption of SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of
ARB No. 51," which is now included in ASC 810 Consolidation,
during the first quarter of 2009.
Non-GAAP Measures
To supplement the consolidated financial results prepared under GAAP, ON
Semiconductor uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results to exclude items related to
amortization of intangible assets, amortization of acquisition-related
intangibles, expensing of appraised inventory fair market value step up,
purchased in-process research and development expenses, restructuring,
asset impairments and other, net, goodwill impairment charges, gains and
losses on debt prepayment, non-cash interest expense, their related tax
effects and certain other special items as necessary. Management does
not consider these charges in evaluating the core operational activities
of ON Semiconductor. Management uses these non-GAAP measures internally
to make strategic decisions, forecast future results and evaluate ON
Semiconductor’s current performance. Most analysts covering ON
Semiconductor use the non-GAAP measures as well. Given management’s use
of these non-GAAP measures, ON Semiconductor believes these measures are
important to investors in understanding ON Semiconductor’s current and
future operating results as seen through the eyes of management. In
addition, management believes these non-GAAP measures are useful to
investors in enabling them to better assess changes in ON
Semiconductor’s core business across different time periods. These
non-GAAP measures are not in accordance with or an alternative to GAAP
financial data and may be different from non-GAAP measures used by other
companies. Because non-GAAP financial measures are not standardized it
may not be possible to compare these financial measures with other
companies’ non-GAAP financial measures, even if they have similar names.
-- Non-GAAP gross profit and gross margin. The use of this non-GAAP
financial measure allows management to evaluate the gross margin of the
company’s core businesses and trends across different reporting periods
on a consistent basis, independent of non-cash items including expensing
of appraised inventory fair market value step up and amortization of
intangible assets. In addition, it is an important component of
management’s internal performance measurement and reward process as it
is used to assess the current and historical financial results of the
business, for strategic decision making, preparing budgets and
forecasting future results. Management presents this non-GAAP financial
measure to enable investors and analysts to evaluate our revenue
generation performance relative to the direct costs of revenue of ON
Semiconductor’s core businesses.
-- Non-GAAP net income and net income per share. The use of these
non-GAAP financial measures allow management to evaluate the operating
results of ON Semiconductor’s core businesses and trends across
different reporting periods on a consistent basis, independent of
non-cash items including amortization of intangible assets, amortization
of acquisition-related intangibles, expensing of appraised inventory
fair market value step up, purchased in-process research and development
expenses, restructuring, asset impairments and other, net, goodwill
impairment charges, gains and losses on debt prepayment, non-cash
interest expense, their related tax effects and certain other special
items as necessary. In addition, they are important components of
management’s internal performance measurement and reward process as it
is used to assess the current and historical financial results of the
business, for strategic decision making, preparing budgets and
forecasting future results. Management presents these non-GAAP financial
measures to enable investors and analysts to understand the results of
operations of ON Semiconductor’s core businesses and to compare our
results of operations on a more consistent basis against that of other
companies in our industry.
SOURCE: ON Semiconductor Corporation
ON Semiconductor, Phoenix
Anne Spitza
Corporate Communications
602-244-6398
anne.spitza@onsemi.com
Ken Rizvi
M&A, Treasury & Investor Relations
602-244-3437
ken.rizvi@onsemi.com
