ON Semiconductor Reports Third Quarter 2011 Results

PHOENIX — (BUSINESS WIRE) — November 2, 2011 — ON Semiconductor Corporation (Nasdaq: ONNN)

For the third quarter of 2011, highlights include:

  • Total revenues of approximately $898.0 million
  • Cash, cash equivalents and short-term investments of $837.7 million
  • Retired $53.0 million in principal of ON Semiconductor’s 2.625% convertible senior subordinated notes
  • Japan operations have fully recovered from the March earthquake and tsunami

ON Semiconductor Corporation (Nasdaq: ONNN) today announced that total revenues in the third quarter of 2011 were $898.0 million, a decrease of approximately 1 percent from the second quarter of 2011. During the third quarter of 2011, the company reported a GAAP net loss of $49.4 million, or $0.11 per fully diluted share. The third quarter 2011 GAAP net loss was impacted by $65.4 million of restructuring, asset impairment and other charges which were primarily related to our announced closure of the Aizu, Japan factory as well as other special items. The complete special item details can be found in the attached schedules.

Third quarter 2011 non-GAAP net income was $110.5 million, or $0.24 per share on a fully diluted basis. Second quarter 2011 non-GAAP net income was $107.7 million, or $0.23 per share on a fully diluted basis. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release, such as non-GAAP gross margin, non-GAAP gross profit 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 http://www.onsemi.com/.

On a mix-adjusted basis, average selling prices for ON Semiconductor in the third quarter of 2011 were down approximately two percent when compared to the second quarter of 2011. Total company GAAP gross margin in the third quarter was 29.1 percent. Total company GAAP gross margin in the third quarter included a net charge of approximately $53.6 million, or approximately 590 basis points, from special items. Total company non-GAAP gross margin in the third quarter was 35.0 percent.

Adjusted EBITDA for the third quarter of 2011 was $169.9 million. Adjusted EBITDA for the second quarter of 2011 was $169.8 million.

“In the third quarter, we were able to report another strong revenue quarter,” said Keith Jackson, ON Semiconductor president and CEO. “In addition, during the quarter, we were able to utilize a portion of our excess cash to repurchase $53 million of our 2.625 percent convertible senior subordinated notes. As we look into the fourth quarter, we are expecting to see a sequential decline in our revenue as a result of the impact caused by the flooding in Thailand, as well as the inventory correction in the global electronics supply chain that is negatively impacting the semiconductor industry as a whole. We remain confident, however, of our longer term growth prospects.”

“During 2011, the company has faced significant challenges resulting from two sizable natural disasters, specifically the tragic March earthquake and resulting tsunami in Japan and the recent devastating flooding in Thailand,” Jackson said. “Both of these natural disasters have sadly impacted our employees, their families and our operations. While many of our employees’ lives have been significantly impacted, we are grateful that they remain safe at this time. In Japan, through the tremendous efforts of our employees, we have fully recovered all our Japan-based operations following the earthquake and resulting tsunami. Our operations in Thailand, however, are still suspended due to the severe flooding in the country and we have not been able to enter our facilities in Ayutthaya or Bang Pa In. The company continues to work on options to meet our customers’ production needs by shifting production to other facilities both within and outside our global ON Semiconductor manufacturing network. I am grateful for the significant efforts by our employees and manufacturing partners who are working tirelessly to make this happen.”


“We believe the flood in Thailand and the resulting damage to our facilities located in Thailand will negatively impact revenues by approximately $60 million in the fourth quarter of 2011,” Jackson said. “Our SANYO Semiconductor division will experience the vast majority of this revenue reduction specifically resulting from the Thailand flood. In addition, given the fixed cost nature of the SANYO Semiconductor division, we believe the reduction in revenue will result in approximately $45 million lower total net income for the company in the fourth quarter of 2011. The preceding flood related impact is included in our guidance below. Our guidance, however, does not include any unusual or incremental charges and expenses we may incur during the fourth quarter as a result of the flood in Thailand and our efforts to restore production capacity. In addition, our guidance does not include any impact from the flood on our suppliers, subcontractors and customers, which we continue to evaluate.

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