NXP Semiconductors Reports Fourth Quarter and Full Year 2011 Results
(firmenpresse) - EINDHOVEN, THE NETHERLANDS -- (Marketwire) -- 02/09/12 -- NXP Semiconductors N.V. (NASDAQ: NXPI)
Trailing twelve month adjusted EBITDA $1,094 million
Net debt reduced $597 million year-on-year to $3,056 million
Ratio of net debt to trailing 12-month adjusted EBITDA at 2.8x
NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial results for the fourth quarter and the full year 2011, ended December 31, 2011, and provided guidance for the first quarter 2012.
"Looking back over 2011, NXP successfully achieved several key initiatives laid out at the time of our IPO. First, we outpaced the growth of our comparable peer group as full year Product Revenue increased nearly 4 percent year-on-year. Secondly, we made good progress on our margin expansion goals, as our ongoing focus to lower manufacturing costs and align operating expenses enabled NXP to deliver nearly a 31 percent increase year-on-year in GAAP operating income. Lastly, we significantly improved our capital structure as net debt declined by $597 million or 16 percent versus 2010 and we de-risked our short-term maturity profile through refinancing actions related to our 2013 maturities," said Richard Clemmer, NXP Chief Executive Officer, "Furthermore, despite the significant inventory correction during the second half of 2011, we continue to experience very strong customer adoption of our technology, a validation of our strategic direction, which we believe, will enable the continued transformation of NXP.
"During the fourth quarter NXP delivered revenue of $931 million, essentially in-line with the mid-point of our original guidance. We are cautiously optimistic that our customers and channel partners have made major progress in the process of aligning their on-hand inventory to end-market demand. While the broader macro-environment continues to be uncertain, we are encouraged by the somewhat improved order rates so far into the current quarter. Additionally, several NXP-specific design opportunities, across our entire product portfolio are coming into clearer focus, which should enable the company to outperform the market growth in 2012." said Clemmer.
Product Revenue is the combination of revenue from the HPMS and Standard Products segments. The decline of Product Revenue during the fourth quarter of 2011 was primarily due to lower revenue through NXP's distribution channel, in particular revenue associated with the sale of the company's Standard Products, and to lesser degree the sale of ARM-based microcontroller and high-performance RF products. The continued decline in the Manufacturing Operations segment is due to the expiration of contractual obligations to provide manufacturing services for previously divested businesses. Included in the total revenue for the fourth quarter of 2010, and the full year 2010 were $12.3 million and $90.9 million respectively, related to the divested NuTune business.
During the fourth quarter of 2011, NXP undertook restructuring actions which included the future closure of its ICN4 and ICN6 wafer fabrication facilities in Nijmegen, the Netherlands, as well as actions to lower headcount, primarily at locations within Europe. Mainly, as a result of these actions, NXP recognized restructuring charges totaling $59 million during the fourth quarter 2011 which negatively impacted GAAP gross profit, GAAP operating expenses and GAAP loss per share. Due to the planned facilities closures and headcount reductions GAAP gross profit was negatively impacted by $23 million; GAAP operating expense was negatively impacted by $36 million; and GAAP loss per share was impacted by approximately $0.24 per share.
Note:
AUTO is the HPMS Automotive business; IDEN is the HPMS Identification business; WILI is the HPMS Wireless Infrastructure, Lighting and Industrial business; MCC is the HPMS Mobile, Consumer and Computing business; HPMS is the High Performance Mixed Signal segment; STDP is the Standard Products segment; MFG & OTHER is the combination of Manufacturing Services and Other Corporate revenue.
During the fourth quarter 2011, NXP completed two debt transactions:
A new $500 million Senior Secured Term Loan Facility due 2017. NXP redeemed $275.0 million of its U.S. dollar-denominated Senior Secured Floating Rate Notes due 2013 and EUR 150.0 million of its Euro-denominated Senior Secured Floating Rate Notes due 2013. The new term loan has a six year maturity, with margin of LIBOR + 425bps, a LIBOR floor of 1.25% and was priced at 96% of par. The covenants of the term loan substantially correspond to those contained in NXP's existing secured notes and credit facilities.
A two-step private exchange transaction, issuing an additional $615.5 million principal amount of U.S. dollar-denominated senior secured floating rate notes due 2016 (the "New FRNs"). The New FRNs were exchanged for $332.8 million principal amount of existing U.S. dollar-denominated floating rate notes due 2013 and EUR 202.3 million principal amount of existing euro-denominated floating rate notes due 2013. The New FRNs bear interest at 3-month LIBOR + 550bps.
The total debt balance at the end of the fourth quarter 2011 was $3,799 million, a decline of $22 million from the $3,821 million in the prior quarter primarily due to the impact of currency fluctuations on NXPs euro-based debt.
Net cash interest paid in the fourth quarter of 2011 was $55 million.
Annualized cost savings for the Redesign Program were $39 million in the fourth quarter of 2011, bringing the cumulative total since the start of the program to $928 million.
Cash paid out for the Redesign Program was $7 million in the fourth quarter of 2011, bringing the cumulative total since the beginning of the program to $727 million.
SSMC, NXP's consolidated joint-venture wafer fab with TSMC, reported fourth quarter 2011 operating income of $21 million, EBITDA of $31 million and had an ending cash balance of $261 million.
Utilization in NXP wafer fabs averaged 71 percent in the fourth quarter 2011 compared to 97 percent in the year ago period and 79 percent in the prior quarter.
On January 4, 2012, Trident Microsystems, Inc. ("Trident") and one of its subsidiaries, Trident Microsystems (Far East) Ltd., filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Not all of Trident's subsidiaries have sought bankruptcy protection. At the time of the filing for Chapter 11 protection, Trident simultaneously announced its intention to sell its set-top-box business operations to Entropic Communications, Inc. for $55 million. NXP is a majority equity shareholder of Trident, through a prior sale of its digital television and set-top-box business in 2010, now holding 57% of the outstanding stock of Trident, with a 30% voting interest in participatory rights and 57% for certain protective rights only. This investment is accounted for under the equity accounted investee methodology on NXP financial statements. Additionally, NXP provides contract manufacturing services and supplies goods to Trident group companies, which is reflected as part of our Manufacturing Operations revenue. During the fourth quarter of 2011, the share in net loss of NXP's equity accounted participation in Trident is not based on the actual reported net loss due to differences in reporting schedules between NXP and Trident. NXP has estimated Trident's net loss based on our interpretation of Trident's public guidance and statements made during the fourth quarter of 2011. Based on the equity accounting methodology used to account for NXP's equity interest in Trident, and irrespective of the Chapter 11 filing, the carrying value of the investment on NXP's balance sheet is zero as of the fourth quarter of 2011, compared to the approximately $18 million as of the end of the third quarter 2011. At this time, the long-term impact to revenue associated with manufacturing services provided and goods supplied to Trident is not known.
NXP provides financial information on both a U.S. generally accepted accounting principles (GAAP) and non-GAAP basis. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in this release.
Non-GAAP information should not be considered a substitute for any information derived or calculated in accordance with GAAP. NXP provides this information as an additional insight as to how management assesses the performance and allocation of resources among its various segments and because the financial community uses it in its analysis of NXP's operating performance, historical results and projections of NXP's future operating results.
The non-GAAP measures used herein are not intended to be measures of financial performance or condition, liquidity or profitability 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.
Certain information referred to in this release, including "non-GAAP gross margin", "non-GAAP operating margin", "EBITDA", "Adjusted EBITDA" and "Trailing 12 month adjusted EBITDA", have not been derived in accordance with GAAP and can vary from other participants in the semiconductor industry. These measures have limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of NXP's financial results as reported under GAAP. In this release the use of the terms:
"Non-GAAP gross profit", "non-GAAP gross margin", "non-GAAP operating margin", "non-GAAP operating income", "non-GAAP net income" and "non-GAAP EPS" are all non-GAAP financial measure that reflect the underlying operating and profit structure of NXP operations net of purchase price accounting ("PPA"), restructuring, other incidental items and the impact of other non-cash adjustments.
"EBITDA", "Adjusted EBITDA" and " Trailing 12 month adjusted EBITDA", are not intended to be a measure of free cash flow for management's discretionary use, as these metrics do not consider certain cash requirements such as interest payments, tax payments, debt service requirements and replacement of fixed assets.
"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. The PPA effect on the Company's gross profit refers to additional depreciation charges on tangible fixed assets, resulting from the step-up in fair values. The amortization charges related to long-lived intangible assets are primarily reflected in general and administrative expenses.
"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). NXP presents other incidental items in its analysis of results of operations because these costs, gains and losses, have affected the comparability of the company's results over the years.
"Net debt" refers to the sum total of long and short term debt less total cash and cash equivalents, as reflected on the balance sheet.
NXP will host a conference call on February 9, 2012 at 4:45 p.m. U.S. Eastern Standard Time (10:45 p.m. Central European Time) to discuss its fourth quarter 2011 results and provide an outlook for the first quarter of 2012.
Interested parties may join the conference call by dialing 1-800-901-5247 (within the U.S.) or 1-617-786-4501 (outside the U.S.). The participant passcode is 86035961. To listen to the webcast, please visit the Investor Relations section of the NXP website at . The webcast will be recorded and available for replay shortly after the call concludes.
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 $4.2 billion in 2011. 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, .
1) Dividends paid to non-controlling interests have been reclassified from operating activities to financing activities to align with the guidance provided by ASC Topic 810 that classifies non-controlling interests within equity.
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(65) million; Loss on extinguishment of long-term debt: $(7) million; Other financial expense: $(19) million; Results relating to equity-accounted investees: $(15) million; and difference between book and cash income taxes: $4 million.
3) Includes stock-based compensation expense of $9 million.
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(82) million; Loss on extinguishment of long-term debt: $(11) million; Other financial expense: $(8) million; Results relating to equity-accounted investees: $(25) million; and difference between book and cash income taxes: $(19) million.
3) Includes stock-based compensation expense of $4 million.
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(102) million; Other financial expense: $(10) million; Results relating to equity-accounted investees: $(26) million; and difference between book and cash income taxes: $16 million.
3) Stock based compensation benefit of $9 million, which resulted from an adjustment of estimated forfeitures to actual forfeitures, is not included in the non-GAAP results.
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange gain on debt: $128 million; Loss on extinguishment of long-term debt: $(32) million; Other financial expense: $(46) million; Results relating to equity-accounted investees: $(77) million; and difference between book and cash income taxes: $4 million.
3) Includes stock-based compensation expense of $23 million.
1) Cash income taxes paid during the period.
2) Includes: Foreign exchange loss on debt: $(331) million; Gain on extinguishment of long-term debt: $57 million; Other financial expense: $(36) million; Results relating to equity-accounted investees: $(86) million; and difference between book and cash income taxes: $(5) million.
3) Includes stock-based compensation expense of $21 million; stock based compensation benefit of $9 million, which resulted from an adjustment of estimated forfeitures to actual forfeitures, is not included in the non-GAAP results.
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