Freescale Semiconductor Announces First Quarter 2007 Results

AUSTIN, Texas—(BUSINESS WIRE)—April 25, 2007— Freescale Semiconductor Holdings I, Ltd. today announced financial results for the first quarter ended March 30, 2007.

Highlights for the quarter include:

-- Net sales of $1.36 billion;

-- Adjusted EBITDA of $335 million;

-- Cash, cash equivalents and short-term investments of $637 million.

A description of Adjusted EBITDA and the reconciliations to our GAAP results are included in this press release and the accompanying tables.

Net Sales

Net sales for the first quarter of 2007 were $1.36 billion, compared to $1.53 billion in the first quarter of 2006. Net sales were negatively impacted in the quarter by a sales decline in the company's Wireless and Mobile Solutions segment. The decline in sales resulted from lower demand at the segment's largest customer.

"Our Transportation and Networking segments continue to generate solid sales and operational profitability," said Michel Mayer, chairman and CEO. "However, the challenging market conditions in the wireless market negatively impacted our overall first quarter results."

Operating Highlights

Operating earnings, net earnings and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) now include non-cash purchase accounting expenses related to the company's acquisition by a private equity consortium in December 2006. The company believes that providing operating earnings and EBITDA exclusive of these expenses is a more meaningful representation of the company's ongoing financial performance. Including the aforementioned expenses, the operating, net and EBITDA losses for the first quarter of 2007 were $654 million, $539 million and $119 million, respectively. Excluding these expenses, operating earnings were $149 million and EBITDA was $300 million. This compares to operating earnings of $207 million and EBITDA of $371 million in the first quarter of 2006.

The company also uses Adjusted EBITDA to measure compliance with certain of its debt covenants. Adjusted EBITDA for the first quarter of 2007 was $335 million. Adjusted EBITDA for the 12 months ended March 30, 2007 was $1.75 billion.

A table describing EBITDA and Adjusted EBITDA and reconciling net income to these measures is included in this press release.

Segment Results

The Transportation and Standard Products segment reported net sales of $665 million in the first quarter of 2007, compared to $653 million in the first quarter of 2006. First quarter 2007 sales benefited from growth in the company's sensor and analog products along with growth in the non-U.S. automotive business. EBITDA for the first quarter was a loss of $8 million. Excluding non-cash purchase accounting items, EBITDA was $178 million, or 27% of sales.

The Networking and Computing Systems segment reported net sales of $320 million, compared to $351 million in the first quarter of 2006. First quarter 2006 sales included revenue from product lines that have since been discontinued. Adjusting for these sales, revenues were essentially flat with the prior year. Net sales benefited from higher demand for the company's Digital Home solutions offset by slower sales into the wireless infrastructure markets. EBITDA for the first quarter was a loss of $88 million. Excluding non-cash purchase accounting items, EBITDA was $90 million, or 28% of sales.

The Wireless and Mobile Solutions segment reported net sales of $364 million in the first quarter of 2007, compared to $506 million in the first quarter of 2006. Net sales were negatively impacted by lower shipments to the segment's largest customer. EBITDA for the first quarter was a loss of $24 million. Excluding non-cash purchase accounting items, EBITDA was $28 million, or 8% of sales.

Liquidity Highlights

Cash, cash equivalents and short-term investments were $637 million on March 30, 2007. Capital expenditures were $92 million or 7% of net sales for the first quarter of 2007.

Conference Call and Webcast

Freescale's quarterly earnings call is scheduled to begin at 4 p.m. Central Daylight Time (USA) on April 25, 2007. The company will offer a live webcast of the conference call over the Internet at

Caution Regarding Forward-looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things, revenues, earnings, cash flows, capital expenditures, working capital and other financial items. These statements also relate to our business strategy, goals and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will" and similar terms and phrases to identify forward-looking statements in this release.

Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct.

Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors, which are described in greater detail under "Risk Factors" in our Registration Statement on Form S-4 filed with the SEC on March 8, 2007. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this release.

About Freescale Semiconductor

Freescale Semiconductor is a global leader in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The privately held company is based in Austin, Texas, and has design, research and development, manufacturing or sales operations in more than 30 countries. Freescale is one of the world's largest semiconductor companies with 2006 sales of $6.4 billion (USD).

Freescale(TM) and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. (C) Freescale Semiconductor, Inc. 2007.
               Freescale Semiconductor Holdings I, Ltd.
          Consolidated and Combined Statements of Operations

                              -------------------------- -------------
                                      Successor           Predecessor

                              -------------------------- -------------
(in millions)                               Combined (1)
                              Three months     ended     Three months
                               ended March    December    ended March
                                                               30,  2007          31,  2006            31,  2006

--------------------------------------------------------  -------------

Net  sales                                                      $1,361              $1,615                $1,526
Cost  of  sales                                                1,217                1,053                      835
                                                            -------------  ------------  -------------
Gross  margin                                                      144                    562                      691
Selling,  general  and
  administrative                                                160                    176                      187
Research  and  development                              290                    319                      294
Amortization  expense  for
  acquired  intangible  assets                        345                    108                          3
In-process  research  and
  development                                                          -                2,260                          -
Reorganization  of  businesses
  and  other                                                              -                      (7)                        -
Merger  and  separation
  expenses                                                                3                    515                          -
                                                            -------------  ------------  -------------
Operating  earnings  (loss)                          (654)            (2,809)                    207
Other  income  (expense),  net                      (198)                  (42)                      11
                                                            -------------  ------------  -------------
Earnings  (loss)  before  income
  taxes  and  cumulative  effect
  of  accounting  change                                  (852)            (2,851)                    218
Income  tax  (benefit)  expense                    (313)                (128)                      13
                                                            -------------  ------------  -------------
Earnings  (loss)  before
  cumulative  effect  of
  accounting  change                                        (539)            (2,723)                    205
Cumulative  effect  of
  accounting  change,  net  of
  income  tax  expense  of  $1                                -                        -                          7
                                                            -------------  ------------  -------------
Net  earnings  (loss)                                    $(539)          $(2,723)                  $212
                                                            =============  ============  =============

(1)  Although  Freescale  continues  as  the  same  legal  entity  after  the
  Merger,  the  consolidated  and  combined  financial  statements  for  the
  three  months  ended  December  31,  2006  are  presented  on  a  combined
  basis  and  include  two  distinct  periods:  September  30  through  December
  1,  2006  (the  "Predecessor  Period"  or  "Predecessor,"  as  context
  requires)  and  December  2  through  December  31,  2006  (the  "Successor
  Period"  or  "Successor,"  as  context  requires),  which  relate  to  the
  period  preceding  the  Merger  and  the  period  succeeding  the  Merger,
  respectively.    The  combined  presentation  does  not  comply  with  U.S.
  GAAP,  but  is  presented  because  we  believe  it  provides  the  most
  meaningful  comparison  of  our  results.    The  consolidated  and  combined
  financial  statements  for  the  Successor  Period  reflect  the  acquisition
  of  Freescale  under  the  purchase  method  of  accounting  in  accordance
  with  SFAS  No.  141,  "Business  Combinations".  The  results  of  the
  Successor  are  not  comparable  to  the  results  of  the  Predecessor  due  to
  the  difference  in  the  basis  of  presentation  of  purchase  accounting  as
  compared  to  historical  cost.

1 | 2 | 3 | 4 | 5  Next Page »

Review Article Be the first to review this article

ClioSoft at DAC

Featured Video
Senior Electrical Engineer for Allen & Shariff Corporation at Pittsburgh, Pennsylvania
Upcoming Events
Symposium on Counterfeit Parts and Materials 2018 at College Park Marriott Hotel & Conference Center MD - Jun 26 - 28, 2018
Concar Expo 2018 at Convention Hall II Sonnenallee 225 Berlin Germany - Jun 27 - 28, 2018
Nanotech 2019 at Tokyo Big Sight East Halls 4-6 & Conference Tower Tokyo Japan - Jun 30 - 1, 2018
INMMiC 2018 at university campus of Brive La Gaillarde France - Jul 5 - 6, 2018
ClioSoft at DAC

Internet Business Systems © 2018 Internet Business Systems, Inc.
25 North 14th Steet, Suite 710, San Jose, CA 95112
+1 (408) 882-6554 — Contact Us, or visit our other sites:
AECCafe - Architectural Design and Engineering TechJobsCafe - Technical Jobs and Resumes GISCafe - Geographical Information Services  MCADCafe - Mechanical Design and Engineering ShareCG - Share Computer Graphic (CG) Animation, 3D Art and 3D Models
  Privacy PolicyAdvertise