News Release from: ON Semiconductor
Edited by the Electronicstalk Editorial Team on 3 February 2004
Restructuring charges bite into Q4 figures
ON Semiconductor Corp has revealed that its total revenues in the fourth quarter of 2003 were $279 million, an increase of 5% from the third quarter of 2003.
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ON Semiconductor Corp has revealed that its total revenues in the fourth quarter of 2003 were $279 million, an increase of 5% from the third quarter of 2003. During the fourth quarter of 2003, the company reported a net loss of $42 million, or $0.21 per share, that included restructuring, asset impairments and other charges of $29.9 million, or $0.14 per share, and a loss on debt prepayment of $1.3 million, or $0.01 per share. During the third quarter of 2003, the company reported a net loss of $16 million, or $0.10 per share, that included a net gain of $3.3 million, or $0.02 per share, from restructuring, asset impairments and other and a loss on debt prepayment of $2.9 million, or $0.02 per share.
On a mix-adjusted basis, average selling prices in the fourth quarter of 2003 were down 2.8% from the third quarter of 2003.
Despite the decline in average selling prices, the company's gross margin remained essentially flat in the fourth quarter due to a combination of increased cost reductions, improved product mix and increased unit volumes as compared with the third quarter of 2003.
EBITDA for the fourth quarter of 2003 was $21 million and included restructuring, asset impairments and other charges of $29.9 million and the $1.3 million loss on debt prepayment.
EBITDA for the third quarter of 2003 was $51 million and included the net gain of $3.3 million from restructuring, asset impairments and other and the $2.9 million loss on debt prepayment.
The $29.9 million in restructuring, asset impairments and other charges for the fourth quarter of 2003 included approximately $5.4 million of cash charges, primarily for severance, and approximately $24.5 million of non-cash charges for asset impairments.
Total cash and non-cash charges included $19.1 million for asset impairments and employee severance at the company's East Greenwich, RI facility; $5.4 million for asset impairments and employee severance at its Rosnov, Czech Republic facility; $2.3 million for the write-down of a note receivable relating to assets sold in 2001; $2.0 million for the write-down of a cost basis investment; and, approximately $1.1 million for other restructuring activities in the USA and Europe.
The net gain of $3.3 million in restructuring, asset impairments and other for the third quarter of 2003 included a $4.6 million gain on the sale of the company's assembly and test facility in Guadalajara, Mexico offset by $1.3 million of net restructuring charges.
Total revenues for 2003 were $1.069 billion, a decrease of 2% from $1.094 billion in 2002.
During 2003, the company reported a net loss of $167 million that included restructuring, asset impairments and other charges of $61.2 million, a loss on debt prepayment of $7.7 million and the cumulative effect of accounting change of $21.5 million.
During 2002, the company reported a net loss of $142 million that included restructuring, asset impairments and other charges of $27.7 million and a loss on debt prepayment of $6.5 million.
The company's gross margin increased by 90 basis points to 28.1% in 2003 from 27.2% in 2002 primarily as a result of manufacturing cost reductions, which were partially offset by price declines.
"During the fourth quarter we took additional steps to improve our manufacturing efficiency by restructuring our facilities in Rhode Island and the Czech Republic", said Keith Jackson, ON Semiconductor President and CEO.
"We continue to focus on serving our customers, improving the efficiency of our manufacturing operations and reducing our debt and related interest expense.
Looking forward, we are encouraged by the strength of our backlog and the improving pricing environment for our products".
"Based upon booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be up by 5 to 6% sequentially in the first quarter", Jackson said.
"Backlog levels at the beginning of the first quarter of 2004 were up from backlog levels at the beginning of the fourth quarter of 2003 and represented greater than 90% of our anticipated first quarter revenues.
We expect that average selling prices will be up for the first quarter of 2004 and that gross margins will increase to between 29 and 30%".
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