For the fourth quarter of 2015, highlights include:
- Total revenues of $840.3 million
- GAAP earnings per diluted share of $0.13, non-GAAP earnings per diluted share of $0.19
- GAAP gross margin of 33.3 percent, non-GAAP gross margin of 33.2 percent
- GAAP operating margin of 6.6 percent, non-GAAP operating margin of 11.1 percent
- Repurchased approximately 1.9 million shares for approximately $20.0 million
- Announced acquisition of Fairchild Semiconductor for $2.4 billion in cash
For 2015, highlights include:
- Total revenues of $3,495.8 million
- GAAP earnings per diluted share of $0.48, non-GAAP earnings per diluted share of $0.83
- GAAP and non-GAAP gross margin of 34.1 percent
- GAAP operating margin of 7.5 percent, non-GAAP operating margin of 11.7 percent
- Repurchased approximately 30.4 million shares for approximately $348.2 million
- Announced acquisition of Fairchild Semiconductor for $2.4 billion in cash
ON Semiconductor Corporation (Nasdaq: ON), today announced that total revenues in the fourth quarter of 2015 were $840.3 million, down approximately 7.1 percent compared to the third quarter of 2015. During the fourth quarter of 2015, the company reported GAAP net income of $54.1 million, or $0.13 per diluted share. The fourth quarter 2015 GAAP net income was negatively impacted by approximately $24.8 million of special items. The complete special items detail can be found in the attached schedules.
Fourth quarter 2015 non-GAAP net income was $78.9 million, or $0.19 per diluted share, compared to $95.5 million, or $0.23 per diluted share, for the third quarter of 2015. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release) 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 http://www.onsemi.com. Additional information on revenue by end market, region, distribution channel and business unit, and share count can be found on the “Investors” section of our website.
Total company GAAP gross margin in the fourth quarter was 33.3 percent, and total company non-GAAP gross margin in the fourth quarter was 33.2 percent. For the fourth quarter of 2015, GAAP operating margin was 6.6 percent, whereas non-GAAP operating margin was 11.1 percent.
Adjusted EBITDA for the fourth quarter of 2015 was $147.3 million. Adjusted EBITDA for the third quarter of 2015 was $163.1 million. During the fourth quarter, the company repurchased approximately 1.9 million shares of common stock for approximately $20.0 million.
Total revenues for 2015 were $3,495.8 million, an increase of approximately 10.6 percent from $3,161.8 million in 2014. During 2015, the company reported GAAP net income of $206.2 million, or $0.48 per diluted share. The 2015 GAAP net income included charges of $150.7 million from special items, including $135.7 million of amortization of acquisition related intangible assets, which are largely attributed to our acquisitions of Truesense Imaging and Aptina Imaging. The remaining charges and special items detail can be found in the attached schedules. During 2014, the company reported GAAP net income of $189.7 million, or $0.43 per diluted share. The 2014 GAAP net income included net charges of $144.6 million from special items.
Non-GAAP net income for 2015 was $356.9 million, or $0.83 per diluted share. The non-GAAP net income for 2014 was $334.3 million, or $0.75 per diluted share.
The company’s GAAP gross margin in 2015 was 34.1 percent. GAAP gross margin in 2015 included a net benefit of approximately $0.8 million from special items. Non-GAAP gross margin in 2015 was 34.1 percent. The company’s GAAP gross margin in 2014 was 34.3 percent. GAAP gross margin in 2014 included a net charge of approximately $30.9 million, or approximately 100 basis points, from special items. Non-GAAP gross margin in 2014 was 35.3 percent.
“We delivered strong performance in the fourth quarter by exercising robust cost discipline in times of heightened macroeconomic uncertainty and softening demand. In 2015, we significantly expanded our footprint in our key strategic markets and returned approximately $348 million to shareholders through our share repurchase program,” said Keith Jackson, president and CEO of ON Semiconductor. “Our growth drivers remain intact, and we are well positioned to again outgrow the industry in 2016.”
“While forecasting trends in current environment is challenging, we have noticed a strengthening in orders during the current quarter. In the current environment of macroeconomic uncertainty, we intend to maintain our costs and expenses discipline while driving growth.”
FIRST QUARTER 2016 OUTLOOK
“Based upon product booking trends, backlog levels, and estimated turns levels, we anticipate that total ON Semiconductor revenue will be approximately $800 million to $840 million in the first quarter of 2016,” Jackson said. “Backlog levels for the first quarter of 2016 represent approximately 80 to 85 percent of our anticipated first quarter 2016 revenue. Average selling prices for the first quarter of 2016 are expected to be down approximately two percent when compared to the fourth quarter of 2015. The outlook for the first quarter of 2016 includes stock-based compensation expense of approximately $11 million to $13 million.”
The following table outlines ON Semiconductor’s projected first quarter of 2016 GAAP and non-GAAP outlook.
* Convertible Notes, Non-cash Interest Expense is calculated pursuant to FASB’s Accounting Standards Codification (“ASC”) Topic 470: Debt.
** Diluted share count can vary for, among other things, the actual exercise of options or vesting of 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 convertible notes or the sale of treasury shares.
*** Special items may include: amortization of intangible assets; amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; inventory valuation adjustments; 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; income tax adjustments to approximate cash taxes; actuarial (gains) losses on pension plans and other pension benefits; 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 GAAP. 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.
