First quarterly profit since 2000

ON Semiconductor has revealed that total revenues in the third quarter of 2004 were $318.4 million, a decrease of 5% from the second quarter of 2004.

ON Semiconductor has revealed that total revenues in the third quarter of 2004 were $318.4 million, a decrease of 5% from the second quarter of 2004.

During the third quarter of 2004, the company reported net income of $15.7 million, or $0.04 per share, which included a loss on debt prepayment of $3.0 million, or $0.01 per share.

During the second quarter of 2004, the company reported a net loss of $3.5 million, or $0.02 per share, that included restructuring, asset impairments and other charges of $0.9 million, and a loss on debt prepayment of $27.4 million, or $0.11 per share.

On a mix-adjusted basis, average selling prices in the third quarter of 2004 were up approximately 1% from the second quarter of 2004.

The company's gross margin in the third quarter was 32.3%, a decrease of approximately 140 basis points as compared with the second quarter of 2004 due to a combination of lower unit volumes and lower manufacturing capacity utilisation.

EBITDA for the third quarter of 2004 was $64.2 million and included the $3.0 million loss on debt prepayment.

EBITDA for the second quarter of 2004 was $46.1 million and included restructuring, asset impairments and other charges of $0.9 million and the $27.4 million loss on debt prepayment.

A reconciliation of this non-GAAP financial measure to the company's net income (loss) and net cash provided by operating activities prepared in accordance with US GAAP is set out in the attached schedule.

"We accomplished a significant milestone this quarter by achieving profitability for the first time since the fourth quarter of 2000", said Keith Jackson, ON Semiconductor President and CEO.

"The actions taken during the year on the operational and financial front have enabled us to reach profitability at a revenue level significantly lower than in the fourth quarter of 2000".

"Operationally, we are executing better throughout the cycle and have improved both our price management and product portfolio".

"Financially, we have strengthened our balance sheet and have reduced our interest expense".

"As we move into 2005, we believe the actions taken this year will continue to position ON for success".

"Based upon booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be flat to down 4% sequentially in the fourth quarter", Jackson said.

"Backlog levels at the beginning of the fourth quarter of 2004 were down from backlog levels at the beginning of the third quarter of 2004 and represented greater than 90% of our anticipated fourth quarter revenues".

"We expect that average selling prices will be down slightly in the fourth quarter of 2004 and while gross margin will decrease to approximately 31%, we expect to remain profitable".

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