EINDHOVEN, THE NETHERLANDS — (Marketwired) — 04/22/13 — NXP Semiconductors N.V. (NASDAQ: NXPI)
Trailing twelve month adjusted EBITDA $1,195 million
Net debt reduced $202 million year-on-year to $2,845 million
NXP realized a $43.5 million net benefit related to the release of a legal provision
NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the first quarter of 2013, ended March 31, 2013, and provided guidance for the second quarter 2013.
“Our revenue results for the first quarter of 2013 came in at the higher end of our guidance, as NXP delivered Product revenue of $1,055 million, a two percent sequential decline, and a fifteen percent increase from the comparable year ago period. Total NXP revenue in the first quarter was $1,085 million, a three percent sequential decline, and an eleven percent increase from the comparable year ago period,” said Richard Clemmer, NXP Chief Executive Officer.
“Our revenue performance during the quarter reflected continued momentum in our Identification business, in addition to more normal seasonal demand trends in our Automotive OEM business. We were pleased with the progress in our Infrastructure & Industrial and our Portable & Computing business but clearly the weak demand environment continues to create headwinds to sustainable growth in our Standard Products segment. From an earnings perspective, and excluding the net benefit of the release of the legal provision our results were in line with the mid-point of our guidance with better than expected performance in our HPMS segment offset by weaker than expected financial performance in our Standard Products segment due to weaker mix, increased pricing pressure and poor factory performance resulting from a slower recovery than expected from our recent quality issues.
“We continue to be focused on improving our overall profitability, and feel good about the overall performance of HPMS, delivering improved earnings and maximizing shareholder value. We are making good progress in our efforts to control our operating expenses although we will accelerate some investments in ID that had been planned for later in the year to assure our continued technology leadership, and will take the necessary actions to improve the performance of Standard Products. Our strategy continues to be focused on providing unique and differentiated product solutions to enable our customers- success, which over the longer-term should allow NXP to outpace the cyclical growth of the overall semiconductor market,” said Clemmer.
(1) Please see “Discussion of GAAP to non-GAAP Reconciliation” on page 3 of this release.
Product Revenue is the combination of revenue from the High Performance Mixed Signal (HPMS) and Standard Products (STDP) segments.
On April 11, 2013, NXP announced the realignment of certain product lines during the first quarter of 2013 to better reflect underlying market dynamics, product complexity and management of the business. Additionally NXP announced stock-based compensation would be excluded from non-GAAP financial results to improve peer group comparability. Stock based compensation was $17 million in the first quarter of 2013 and a reconciliation of the impact to reported historical financial results is provided on NXP-s investor relations website at .
On March 5, 2013, NXP issued $500 million senior unsecured notes due March 2023, with a coupon of 5.75%. NXP has used the net proceeds of the offering to repay its outstanding $471 million of U.S. dollar-denominated Senior Secured notes due April 2019 (“Term Loan B”).
On February 1, 2013, NXP issued $500 million senior unsecured notes due February 2021, with a coupon of 5.75%. NXP has used the net proceeds of the offering to repay its outstanding $494 million of U.S. dollar-denominated Senior Secured notes due April 2017 (“Term Loan A2”).
Total gross debt at the end of the first quarter 2013 was $3,440 million, a $52 million reduction from the prior quarter. Cash at the end of the first quarter of 2013 was $595 million, resulting in a net-debt position of $2,845 million, a $30 million reduction from the prior quarter.
Net cash interest paid in the first quarter of 2013 was $54 million.
NXP repurchased 1.1M shares for a total cost of approximately $35 million.
SSMC, NXP-s consolidated joint-venture wafer fab with TSMC, reported first quarter 2013 operating income of $34 million, EBITDA of $45 million and a closing cash balance of $327 million.
Utilization in NXP wafer fabs averaged 83 percent in the first quarter 2013 compared to 84 percent in the year ago period and 85 percent in the prior quarter.
Note (1): NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. The guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP-s control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding “Use of Non-GAAP Financial Information” elsewhere in this release. For the factors, risks and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding “Forward-looking Statements.” We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances. Considering the uncertain magnitude and variability of the foreign exchange consequences upon “PPA effects,” “restructuring costs,” “other incidental items” and any interest expense or taxes in future periods, management believes that GAAP financial measures are not available for NXP on a forward looking basis.
In addition to providing financial information on a basis consistent with U.S. generally accepted accounting principles (“GAAP”), NXP also provides the following selected financial measures on a non-GAAP basis: (i) “non-GAAP gross profit,” (ii) “non-GAAP gross margin,” (iii) “non-GAAP Research and development,” (iv) “non-GAAP Selling, general and administrative,” (v) non-GAAP Other income,” (vi) “non-GAAP operating income (loss),” (vii) “non-GAAP operating margin,” (viii) “non-GAAP net income/ (loss),” (ix) “PPA effects,” (x) “Restructuring costs,” (xi) “Stock based compensation,” (xii) “Other incidental items,” (xiii) “non-GAAP Financial Income (expense),” (xiv) “non-GAAP Results relating to equity-accounted investees,” (xv) “non-GAAP Cash tax (expense),” (xvi) “non-GAAP EPS,” (xvii) “EBITDA,” “adjusted EBITDA” and “trailing 12 month adjusted EBITDA” and (xviii) “net debt.”
In this release, references to:
“non-GAAP gross profit,” “non-GAAP research and development,” “non-GAAP Selling, general and administrative,” “non-GAAP Other income,” “non-GAAP operating income (loss)” and “non-GAAP net income/ (loss)” are to NXP-s gross profit, research and development, selling general and administrative, operating income and net income/ (loss) calculated on a basis consistent with GAAP, net of the effects of purchase price accounting (“PPA”), restructuring costs and certain other incidental items. “PPA effects” reflect the fair value adjustments impacting acquisition accounting and other acquisition adjustments charged to the income statement applied to the formation of NXP on September 29, 2006 and all subsequent acquisitions. “Restructuring costs” consist of costs related to restructuring programs and gains and losses resulting from divestment activities and impairment charges. “Stock based compensation” consists of incentive expense granted to eligible employees in the form of equity based instruments. “Other incidental items” consist of process and product transfer costs (which refer to the costs incurred in transferring a production process and products from one manufacturing site to another) and certain charges related to acquisitions and divestitures. “Other adjustments” include or exclude certain items that management believes provides insight into our core operating results, our ability to generate cash and underlying business trends affecting our performance.
“non-GAAP gross margin” and “non-GAAP operating margin” are to our non-GAAP gross profit or our non-GAAP operating income as a percentage of our sales, respectively;
“non-GAAP Financial Income (expense)” is the interest income or expense net of impacts due foreign exchange changes on our Euro-denominated debt, gains or losses due to the extinguishment of long-term debt and less other financial expenses deemed to be one-time in nature;
“non-GAAP Cash tax (expense)” is the difference between our GAAP tax provision and the cash taxes paid during the period;
“non-GAAP EPS” attributable to stockholders are to non-GAAP net income or loss attributable to NXP-s stockholders, divided by the weighted average number of common shares outstanding during the period, adjusted for treasury shares held;
“EBITDA” are to NXP-s earnings before interest, taxes, depreciation and amortization. “EBITDA” excludes certain tax payments that may represent a reduction in cash available to us, does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future, does not reflect changes in, or cash requirements for, our working capital needs and does not reflect the significant financial expense, or the cash requirements necessary to service interest payments, on our debts;
“adjusted EBITDA” are to EBITDA after adjustments for “restructuring costs,” “other incidental items” and results related to equity accounted investees.
“trailing 12 month adjusted EBITDA” are to adjusted EBITDA for the last 12 months; and
“net debt” is to the sum total of long and short term debt less total cash and cash equivalents, as reflected on the balance sheet.
Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).”
NXP provides non-GAAP measures because management believes that they are helpful to understand the underlying operating and profit structure of NXP-s operations, to provide additional insight as to how management assesses the performance and allocation of resources among its various segments and because the financial community uses them in its analysis of NXP-s operating and/or financial performance, historical results and projections of NXP-s future operating results. NXP presents “non-GAAP gross profit,” “non-GAAP research and development,” “non-GAAP Selling, general and administrative,” “non-GAAP Other income,” “non-GAAP operating income,” “non-GAAP net income/ (loss),” “non-GAAP gross margin,” “non-GAAP operating margin” and “non-GAAP EPS” because these financials measures are net of “PPA effects,” “restructuring costs,” “stock based compensation,” “other incidental items,” and “other adjustments” which have affected the comparability of NXP-s results over the years. NXP presents “EBITDA,” “adjusted EBITDA” and “trailing 12 month adjusted EBITDA” because these financials measures enhance an investor-s understanding of NXP-s financial performance.
Non-GAAP measures should not be considered a substitute for any information derived or calculated in accordance with GAAP, are not intended to be measures of financial performance or condition, liquidity, profitability or operating cash flows in accordance with GAAP, and should not be considered as alternatives to net income (loss), operating income or any other performance measures determined in accordance with GAAP. These non-GAAP measures can vary from other participants in the semiconductor industry. They have limitations as analytical tools and should not be considered in isolation for analysis of NXP-s financial results as reported under GAAP.
NXP Semiconductors N.V. (NASDAQ: NXPI) provides High Performance Mixed Signal and Standard Product solutions that leverage its leading RF, Analog, Power Management, Interface, Security and Digital Processing expertise. These innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. A global semiconductor company with operations in more than 25 countries, NXP posted revenue of $4.36 billion in 2012. Additional information can be found by visiting .
This document includes forward-looking statements which include statements regarding NXP-s business strategy, financial condition, results of operations, and market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions; the ability to successfully introduce new technologies and products; the end-market demand for the goods into which NPX-s products are incorporated; the ability to generate sufficient cash, raise sufficient capital or refinance corporate debt at or before maturity; the ability to meet the combination of corporate debt service, research and development and capital investment requirements; the ability to accurately estimate demand and match manufacturing production capacity accordingly or obtain supplies from third-party producers; the access to production capacity from third-party outsourcing partners; any events that might affect third-party business partners or NXP-s relationship with them; the ability to secure adequate and timely supply of equipment and materials from suppliers; the ability to avoid operational problems and product defects and, if such issues were to arise, to correct them quickly; the ability to form strategic partnerships and joint ventures and to successfully cooperate with alliance partners; the ability to win competitive bid selection processes to develop products for use in customers- equipment and products; the ability to successfully establish a brand identity; the ability to successfully hire and retain key management and senior product architects; and, the ability to maintain good relationships with our suppliers. In addition, this document contains information concerning the semiconductor industry and NXP-s business segments generally, which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which the semiconductor industry, NXP-s market segments and product areas may develop. NXP has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While NXP does not know what impact any such differences may have on its business, if there are such differences, its future results of operations and its financial condition could be materially adversely affected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak to results only as of the date the statements were made. Except for any ongoing obligation to disclose material information as required by the United States federal securities laws, NXP does not have any intention or obligation to publicly update or revise any forward-looking statements after we distribute this document, whether to reflect any future events or circumstances or otherwise. For a discussion of potential risks and uncertainties, please refer to the risk factors listed in our SEC filings. Copies of our SEC filings are available on our Investor Relations website, or from the SEC website, .
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