01—Abstract
Summary
Summary of the 10-K filed February 21, 2014. Cited figures are marked; the original filing is the authoritative source.
ON Semiconductor Corporation reported total revenues of $2,782.7 milliona for 2013, down from $2,894.9 million in 2012, with the decline attributed mainly to lower revenue in its System Solutions Group amid a softer Japanese consumer market and a weaker Yen.
Gross margin rose to 33.7% from 32.9%, and the company returned to net income attributable to ON Semiconductor Corporation of $150.8 millionb, or $0.33 per diluted share, compared with a net loss of $90.6 million in 2012 that was largely driven by 2012 asset impairments in the System Solutions Group. The company continued restructuring its System Solutions Group, which included two voluntary retirement programs in Japan and a plan to close the KSS facility by the end of the second quarter of 2014. Restructuring, asset impairments and other, net totaled $33.2 million in 2013, versus $165.3 million in 2012.
Cash, cash equivalents and short-term investments were $625.7 millionc at year end, and the company retired its 1.875% and 2.625% Notes while extending its senior revolving credit facility to $800 million maturing October 2018. The company remained highly leveraged, with long-term debt including current maturities of $942.2 million at December 31, 2013.
Management expects Q1 2014 revenues of approximately $695 million to $725 milliond and gross margin of approximately 33% to 35%. Capital expenditures were $155.2 million in 2013, with a 2014 projection of approximately $205 million to $225 million.
02—Key points
Key Highlights
- Revenue declined to $2,782.7 million in 2013 from $2,894.9 million in 2012, driven by the System Solutions Group.
- Gross margin increased to 33.7% in 2013 from 32.9% in 2012.
- Net income attributable to ON Semiconductor Corporation was $150.8 million ($0.33 diluted EPS), versus a net loss of $90.6 million in 2012.
- Restructuring, asset impairments and other, net fell to $33.2 million from $165.3 million, with System Solutions Group voluntary retirement programs and the KSS facility closure planned for 2014.
- Retired $72.6 million of 2.625% Notes and $73.4 million of 1.875% Notes; senior revolving credit facility increased to $800 million and extended to October 2018.
- Cash, cash equivalents and short-term investments of $625.7 million at December 31, 2013; long-term debt including current maturities of $942.2 million.
- Management guides Q1 2014 revenue of approximately $695 million to $725 million and gross margin of approximately 33% to 35%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, On Semiconductor kept $0.05.
- Revenue$2.78B100.0%
- Cost of revenue−$1.85B66.6%
- Gross profit$929.1M33.4%
- Operating costs−$720.2M25.9%
- Operating income$208.9M7.5%
- Interest, other & tax−$58.5M2.1%
- Net income$150.4M5.4%
Where FY2013 revenue went
$2.78B- Cost of revenue: $1.85B, 67% of revenue
- Operating costs: $720.2M, 26% of revenue
- Net income: $150.4M, 5.4% of revenue
- Interest, other & tax: $58.5M, 2.1% of revenue
Kept 5.4% as net incomeNet income $150.4M · 5.4%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 21, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $2.78B$2.89B | −3.9% |
| Cost of Revenue | $1.85B$1.95B | −4.9% |
| Gross Profit | $929.10M$946.30M | −1.8% |
| Operating Expenses | $720.20M$966.60M | −25.5% |
| Operating Income | $208.90M-$20.30M | +1129.1% |
| Interest Expense | $38.60M$56.10M | −31.2% |
| Net Income | $150.40M-$97.20M | +254.7% |
| EPS (Basic) | $0.34$-0.21 | +261.9% |
| EPS (Diluted) | $0.33$-0.21 | +257.1% |
| Shares Outstanding (Basic) | 447.90M452.60M | −1.0% |
| Shares Outstanding (Diluted) | 450.70M452.60M | −0.4% |
05—Questions
Frequently Asked Questions
How did ON Semiconductor perform financially in 2013?
Revenue was $2,782.7 million, down from $2,894.9 million in 2012. Gross profit was $938.4 million, and net income attributable to ON Semiconductor Corporation was $150.8 million, or $0.33 per diluted share, compared with a net loss of $90.6 million in 2012.
Which segment drove the revenue decline?
The System Solutions Group, whose revenue fell to $625.2 million from $771.0 million, due to a further softening of the Japanese consumer market, a weakened Yen and, to a lesser extent, political tensions between Japan and China. Application Products Group and Standard Products Group revenue increased slightly.
What restructuring actions did the company take?
The company initiated two voluntary retirement programs for System Solutions Group employees in Japan, approximately 500 and 350 employees opted to retire, and announced a plan to close the KSS facility by the end of the second quarter of 2014. It also closed its Aizu facility during 2013.
How is the company's debt and liquidity position?
Long-term debt including current maturities was $942.2 million at December 31, 2013. The company retired the 1.875% and 2.625% Notes, borrowed $120 million under its $800 million senior revolving credit facility, and stated cash, cash equivalents and short-term investments of $625.7 million are adequate for at least the next 12 months.
What is the outlook for the first quarter of 2014?
The company estimates first-quarter 2014 revenues of approximately $695 million to $725 million, with average selling prices down about two percent compared with the fourth quarter of 2013, and gross margin of approximately 33% to 35%.
06—Continue