ON Semiconductor Corporation (Nasdaq: ONNN) today announced that total revenues in the fourth quarter of 2013 were $718.0 million, up less than one percent compared to the third quarter of 2013. During the fourth quarter of 2013, the company reported GAAP net income of $41.9 million, or $0.09 per diluted share. The fourth quarter 2013 GAAP net income was impacted by approximately $32.4 million of special items. The complete special items detail can be found at http://www.onsemi.com.
Fourth quarter 2013 non-GAAP net income was $74.3 million, or $0.17 per diluted share, compared to $75.4 million, or $0.17 per diluted share, for the third quarter of 2013. A reconciliation of these non-GAAP financial measures (and other non-GAAP measures used elsewhere in this release, such as non-GAAP gross margin 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. Additionally, revenue by end market, region, distribution channel and business unit can be found on the “Investors” section of our website.
On a mix-adjusted basis, average selling prices for ON Semiconductor in the fourth quarter of 2013 were down by less than one percent when compared to the third quarter of 2013. Total company GAAP gross margin in the fourth quarter was 35.2%. Non-GAAP gross margin in the fourth quarter was 34.8%.
Adjusted EBITDA for the fourth quarter of 2013 was $131.3 million. Adjusted EBITDA for the third quarter of 2013 was $128.8 million.
Moving forward, our business segment formerly known as SANYO Semiconductor Products Group, will be referred to as System Solutions Group. This name change has been necessitated by the expiration of our license to use the SANYO name.
Total revenues for 2013 were $2,782.7 million, a decrease of approximately four percent from $2,894.9 million in 2012. During 2013, the company reported GAAP net income of $164.0 million, or $0.36 per diluted share. The 2013 GAAP net income included charges of $87.6 million from special items, including $33.2 million of restructuring, asset impairment and other, net charges, which are largely attributed to the System Solutions Group. The remaining charges and special items detail can be found in the attached schedules. During 2012, the company reported GAAP net loss of $90.6 million, or $0.20 per diluted share. The 2012 GAAP net income included net charges of $303.6 million from special items, the details of which can be found in the attached schedules.
Non-GAAP net income for 2013 was $251.6 million, or $0.56 per diluted share. The non-GAAP net income for 2012 was $213.0 million, or $0.47 per diluted share.
The company’s GAAP gross margin in 2013 was 33.7 percent. GAAP gross margin in 2013 included a net charge of approximately $4.0 million, or approximately twenty basis points, from special items. Non-GAAP gross margin in 2013 was 33.9 percent. The company’s GAAP gross margin in 2012 was 32.9 percent. GAAP gross margin in 2012 included a net charge of approximately $11.1 million, or approximately 40 basis points, from special items. Non-GAAP gross margin in 2012 was 33.3 percent. The special item details can be found in the attached schedules.
“With a strong design win pipeline across multiple segments and with substantial progress in previously announced restructuring measures, we believe we are well positioned to deliver strong operational results for 2014,” said Keith Jackson, president and CEO of ON Semiconductor. “In 2014, we expect to resume strong free cash flow generation, which had been a hallmark of our operating model. Our momentum in targeted growth areas of automobiles, smartphones, and select segments of the industrial end-market should accelerate and enable us to deliver above market growth in 2014.
“Business trends during the fourth quarter of 2013 improved significantly with heightened order activity, and the strength has continued thus far in the current quarter. With an improving macro-economic outlook, especially for developed economies, and with favorable supply-demand dynamics, we are upbeat on our outlook for 2014.”
FIRST QUARTER 2014 OUTLOOK
“Based upon product booking trends, backlog levels, and estimated turns levels, we anticipate that total ON Semiconductor revenues will be approximately $695 million to $725 million in the first quarter of 2014,” Jackson said. “Backlog levels for the first quarter of 2014 represent approximately 80 to 85 percent of our anticipated first quarter 2014 revenues. Average selling prices for the first quarter of 2014 are expected to be down approximately 2 percent when compared to the fourth quarter of 2013. The outlook for the first quarter of 2014 includes stock-based compensation expense of approximately $7 to $9 million.”