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ON Semiconductor Reports First Quarter 2019 Results
Reading Time: 16 minutes
- Revenue of $1,386.6 million
- Gross margin of 37.0 percent
-
GAAP operating margin of 12.9 percent and non-GAAP operating margin of
15.5 percent -
GAAP diluted earnings per share of $0.27 and non-GAAP diluted earnings
per share of $0.43
PHOENIX–(BUSINESS WIRE)–ON Semiconductor Corporation (Nasdaq: ON)
today announced that revenue in first quarter of 2019 was
$1,386.6 million, up approximately one percent compared to revenue in
first quarter of 2018. First quarter 2019 revenue was down approximately
eight percent as compared to revenue in fourth quarter of 2018.
“Our execution continues to be strong, despite soft business conditions.
While we are facing near-term headwinds, key secular drivers powering
our business remain intact, and we are well positioned to benefit from
increasing semiconductor content in automotive, industrial, and
cloud-power applications,” said Keith Jackson, president and CEO of ON
Semiconductor. “We are prudently managing our business, and we intend to
deliver strong operational results to mitigate the impact of slowing
demand environment.”
“We remain upbeat about our future, and we are making prudent long term
investments to strengthen our position in our strategic markets and to
further improve our industry-leading cost structure.”
|
First Quarter Results (GAAP) |
||||||||||||||||
| (in millions, except per share data) | 1Q 2019 | 1Q 2018 |
Year-Over- |
4Q 2018 |
Sequential
Change |
|||||||||||
| Revenue | $1,386.6 | $1,377.6 | 1 | % | $1,503.1 | (8 | )% | |||||||||
| Gross Profit | $513.7 | $517.4 | (1 | )% | $569.7 | (10 | )% | |||||||||
| Operating Income | $179.4 | $185.7 | (3 | )% | $222.7 | (19 | )% | |||||||||
| Net Income Attributable to ON Semiconductor Corporation | $114.1 | $139.6 | (18 | )% | $165.6 | (31 | )% | |||||||||
| Diluted Earnings Per Share | $0.27 | $0.31 | (13 | )% | $0.39 | (31 | )% | |||||||||
| Diluted Share Count | 417.7 | 444.2 | (6 | )% | 420.0 | (1 | )% | |||||||||
|
First Quarter Results (Non-GAAP) |
||||||||||||||||
| (in millions, except per share data) | 1Q 2019 | 1Q 2018 |
Year-Over- Year Change |
4Q 2018 |
Sequential
Change |
|||||||||||
| Revenue | $1,386.6 | $1,377.6 | 1 | % | $1,503.1 | (8 | )% | |||||||||
| Gross Profit | $513.7 | $517.4 | (1 | )% | $570.3 | (10 | )% | |||||||||
| Operating Income | $215.2 | $216.7 | (1 | )% | $253.0 | (15 | )% | |||||||||
| Net Income Attributable to ON Semiconductor Corporation | $177.1 | $170.7 | 4 | % | $222.0 | (20 | )% | |||||||||
| Diluted Earnings Per Share | $0.43 | $0.40 | 8 | % | $0.53 | (19 | )% | |||||||||
| Diluted Share Count | 413.8 | 431.6 | (4 | )% | 420.0 | (1 | )% | |||||||||
|
First Quarter Key Cash Flow Items |
|||||||||||||||||
| (in millions) | 1Q 2019 | 1Q 2018 |
Year-Over- Year Change |
4Q 2018 |
Sequential
Change |
||||||||||||
| Cash Taxes, net of indemnification | $15.2 | $19.1 | (20 | )% | $8.2 | 85 | % | ||||||||||
| Operating Cash Flow | $138.2 | $226.5 | (39 | )% | $421.0 | (67 | )% | ||||||||||
| Free Cash Flow | ($18.8 | ) | $127.0 | (115 | )% | $289.0 | (107 | )% | |||||||||
SECOND QUARTER 2019 OUTLOOK
Based on product booking trends, backlog levels, and estimated turns
levels, the Company anticipates revenue in second quarter of 2019 to be
approximately $1,360 to $1,410 million. Revenue outlook for second
quarter of 2019 includes revenue of approximately $15 million from
manufacturing services provided by ON Semiconductor Aizu Co., Ltd.
(“OSA”).
Gross margin for second quarter of 2019 is expected to be in range of
36.5 percent to 37.5 percent. Second quarter 2019 gross margin outlook
includes negative impact of 40 basis points from manufacturing services
provided by OSA.
The outlook for second quarter of 2019 also includes anticipated
stock-based compensation expense of approximately $26 million to $28
million. Net cash paid for income taxes is expected to be $12 million to
$16 million.
The following table outlines ON Semiconductor’s projected second quarter
of 2019 GAAP and non-GAAP outlook.
|
Total ON Semiconductor
GAAP |
Special
Items *** |
Total ON Semiconductor
Non-GAAP**** |
||||
| Revenue | $1,360 to $1,410 | $1,360 to $1,410 | ||||
| Gross Margin | 36.5% to 37.5% | 36.5% to 37.5% | ||||
| Operating Expenses | $322 to $340 million | $27 to $31 million | $295 to $309 million | |||
| Other Income and Expense (including interest expense), net | $31 to $34 million | $9 to $10 million* | $22 to $24 million | |||
| Diluted Share Count ** | 418 million | 4 million | 414 million |
| * |
Convertible Notes, Non-cash Interest Expense is calculated pursuant to FASB’s Accounting Standards Codification Topic 470: Debt. |
|
| ** |
Diluted share count can vary as a result of, among other things, the actual exercise of options or vesting of restricted stock units, the incremental dilutive shares from the Company’s convertible senior subordinated notes, and the repurchase or the issuance of stock or convertible notes or the sale of treasury shares. In periods in which the quarterly average stock price per share exceeds $18.50, the non-GAAP diluted share count and non-GAAP net income per share includes the impact of the Company’s hedge transactions issued concurrently with our 1.00% convertible notes. As such, at an average stock price per share between $18.50 and $25.96, the hedging activity offsets the potentially dilutive effect of the 1.00% convertible notes. In periods when the quarterly average stock price per share exceeds $20.72, the non-GAAP diluted share count and non-GAAP net income per share includes the anti-dilutive impact of the Company’s hedge transactions issued concurrently with the 1.625% convertible notes. At an average stock price per share between $20.72 and $30.70, the hedging activity offsets the potentially dilutive effect of the 1.625% convertible notes. Both GAAP and non-GAAP diluted share counts are based on the Company’s stock price as of March 29, 2019. |
|
| *** |
Special items may include: amortization of acquisition-related intangibles; expensing of appraised inventory fair market value step-up; purchased in-process research and development expenses; restructuring, asset impairments and other, net; goodwill impairment charges; gains and losses on debt prepayment; non-cash interest expense; actuarial (gains) losses on pension plans and other pension benefits; and certain other special items, as necessary. These special items are out of our control and could change significantly from period to period. As a result, we are not able to reasonably estimate and separately present the individual impact or probable significance of these special items, and we are similarly unable to provide a reconciliation of the non-GAAP measures. The reconciliation that is unavailable would include a forward-looking income statement, balance sheet and statement of cash flows in accordance with GAAP. For this reason, we use a projected range of the aggregate amount of special items in order to calculate our projected non-GAAP operating expense outlook. |
|
| **** |
We believe these non-GAAP measures provide important supplemental information to investors. We use these measures, together with GAAP measures, for internal managerial purposes and as a means to evaluate period-to-period comparisons. However, we do not, and you should not, rely on non-GAAP financial measures alone as measures of our performance. We believe that non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when taken together with GAAP results and the reconciliations to corresponding GAAP financial measures that we also provide in our releases, provide a more complete understanding of factors and trends affecting our business. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures, even if they have similar names. |
TELECONFERENCE
ON Semiconductor will host a conference call for the financial community
at 9 a.m. Eastern Daylight Time (EDT) on April 29, 2019 to discuss this
announcement and ON Semiconductor’s results for first quarter of 2019.
The Company will also provide a real-time audio webcast of the
teleconference on the Investor Relations page of its website at http://www.onsemi.com.
The webcast replay will be available at this site approximately one hour
following the live broadcast and will continue to be available for
approximately 30 days following the conference call. Investors and
interested parties can also access the conference call through a
telephone call by dialing (877) 356-3762 (U.S./Canada) or (262) 558-6155
(International). In order to join this conference call, you will be
required to provide the Conference ID Number, which is 2874546.
About ON Semiconductor
ON Semiconductor (Nasdaq: ON) is driving energy efficient innovations,
empowering customers to reduce global energy use. The Company is a
leading supplier of semiconductor-based solutions, offering a
comprehensive portfolio of energy efficient power management, analog,
sensors, logic, timing, connectivity, discrete, SoC and custom devices.
The Company’s products help engineers solve their unique design
challenges in automotive, communications, computing, consumer,
industrial, medical, aerospace and defense applications. ON
Semiconductor operates a responsive, reliable, world-class supply chain
and quality program, a robust compliance and ethics program and a
network of manufacturing facilities, sales offices and design centers in
key markets throughout North America, Europe and the Asia Pacific
regions. For more information, visit http://www.onsemi.com.
ON Semiconductor and the ON Semiconductor logo are registered
trademarks of Semiconductor Components Industries, LLC. All other
brand and product names appearing in this document are registered
trademarks or trademarks of their respective holders. Although
the Company references its website in this news release, information on
the website is not to be incorporated herein.
This document contains “forward-looking statements,” as that term is
defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, included or
incorporated in this document could be deemed forward-looking
statements, particularly statements about the future financial
performance of ON Semiconductor, including financial guidance for the
year ending December 31, 2019. Forward-looking statements are often
characterized by the use of words such as “believes,” “estimates,”
“expects,” “projects,” “may,” “will,” “intends,” “plans” or
“anticipates” or by discussions of strategy, plans or intentions. All
forward-looking statements in this document are made based on our
current expectations, forecasts, estimates and assumptions and involve
risks, uncertainties and other factors that could cause results or
events to differ materially from those expressed in the forward-looking
statements. Among these factors are our revenue and operating
performance; economic conditions and markets (including current
financial conditions); risks related to our ability to meet our
assumptions regarding outlook for revenue and gross margin as a
percentage of revenue; effects of exchange rate fluctuations; the
cyclical nature of the semiconductor industry; changes in demand for our
products; changes in inventories at our customers and distributors;
risks associated with restructuring actions and workforce reductions;
technological and product development risks; enforcement and protection
of our intellectual property rights and related risks; risks related to
the security of our information systems and secured network;
availability of raw materials, electricity, gas, water and other supply
chain uncertainties; our ability to effectively shift production to
other facilities when required in order to maintain supply continuity
for our customers; variable demand and the aggressive pricing
environment for semiconductor products; our ability to successfully
manufacture in increasing volumes on a cost-effective basis and with
acceptable quality for our current products; risks associated with our
acquisitions and dispositions generally, including our ability to
realize the anticipated benefits of our acquisitions and dispositions;
risks that acquisitions or dispositions may disrupt our current plans
and operations, the risk of unexpected costs, charges or expenses
resulting from acquisitions or dispositions and difficulties arising
from integrating and consolidating acquired businesses, our timely
filing of financial information with the Securities and Exchange
Commission (“SEC”) for acquired businesses and our ability to accurately
predict the future financial performance of acquired businesses);
competitor actions, including the adverse impact of competitor product
announcements; pricing and gross profit pressures; loss of key customers
or distributors; order cancellations or reduced bookings; changes in
manufacturing yields; control of costs and expenses and realization of
cost savings and synergies from restructurings; significant litigation;
risks associated with decisions to expend cash reserves for various uses
in accordance with our capital allocation policy such as debt
prepayment, stock repurchases or acquisitions rather than to retain such
cash for future needs; risks associated with our substantial leverage
and restrictive covenants in our debt agreements that may be in place
from time to time; risks associated with our worldwide operations,
including changes in trade policies, foreign employment and labor
matters associated with unions and collective bargaining arrangements as
well as man-made and/or natural disasters affecting our operations or
financial results; the threat or occurrence of international armed
conflict and terrorist activities both in the United States and
internationally; risks of changes in U.S. or international tax rates or
legislation; risks and costs associated with increased and new
regulation of corporate governance and disclosure standards; risks
related to new legal requirements; and risks involving environmental or
other governmental regulation. Additional factors that could affect our
future results or events are described under Part I, Item 1A “Risk
Factors” in our 2018 Annual Report on Form 10-K filed with the SEC on
February 20, 2019 (our “2018 Form 10-K”) and from time-to-time in our
other SEC reports. Readers are cautioned not to place undue reliance on
forward-looking statements. We assume no obligation to update such
information, except as may be required by law. You should carefully
consider the trends, risks and uncertainties described in this document,
our 2018 Form 10-K and other reports filed with or furnished to the SEC
before making any investment decision with respect to our securities. If
any of these trends, risks or uncertainties actually occurs or
continues, our business, financial condition or operating results could
be materially adversely affected, the trading prices of our securities
could decline and you could lose all or part of your investment. All
forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by this cautionary
statement.
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||
|
(in millions, except per share data) |
||||||||||||
| Quarters Ended | ||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Revenue | $ | 1,386.6 | $ | 1,503.1 | $ | 1,377.6 | ||||||
| Cost of revenue (exclusive of amortization shown below) | 872.9 | 933.4 | 860.2 | |||||||||
| Gross profit | 513.7 | 569.7 | 517.4 | |||||||||
| Gross margin | 37.0 | % | 37.9 | % | 37.6 | % | ||||||
| Operating expenses: | ||||||||||||
| Research and development | 151.8 | 162.2 | 155.2 | |||||||||
| Selling and marketing | 77.1 | 82.1 | 77.8 | |||||||||
| General and administrative | 72.9 | 74.5 | 70.9 | |||||||||
| Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||
| Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||
| Intangible asset impairment | 1.2 | 3.5 | — | |||||||||
|
Total operating expenses |
334.3 | 347.0 | 331.7 | |||||||||
| Operating income | 179.4 | 222.7 | 185.7 | |||||||||
| Other income (expense), net: | ||||||||||||
| Interest expense | (31.7 | ) | (32.9 | ) | (31.5 | ) | ||||||
| Interest income | 2.5 | 2.8 | 0.9 | |||||||||
| Licensing income | — | 3.7 | 3.8 | |||||||||
| Other income (expense) | 2.1 | (7.6 | ) | (2.0 | ) | |||||||
| Other income (expense), net | (27.1 | ) | (34.0 | ) | (28.8 | ) | ||||||
| Income before income taxes | 152.3 | 188.7 | 156.9 | |||||||||
| Income tax provision | (38.2 | ) | (22.7 | ) | (16.4 | ) | ||||||
| Net income | 114.1 | 166.0 | 140.5 | |||||||||
| Less: Net income attributable to non-controlling interest | — | (0.4 | ) | (0.9 | ) | |||||||
| Net income attributable to ON Semiconductor Corporation | $ | 114.1 | $ | 165.6 | $ | 139.6 | ||||||
|
Net income per common share attributable to ON Semiconductor Corporation: |
||||||||||||
| Basic | $ | 0.28 | $ | 0.40 | $ | 0.33 | ||||||
| Diluted | $ | 0.27 | $ | 0.39 | $ | 0.31 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 410.6 | 416.9 | 425.9 | |||||||||
| Diluted | 417.7 | 420.0 | 444.2 | |||||||||
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||||||
|
(in millions) |
||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 939.6 | $ | 1,069.6 | $ | 924.9 | ||||||
| Receivables, net | 704.0 | 686.0 | 696.9 | |||||||||
| Inventories | 1,225.2 | 1,225.2 | 1,160.0 | |||||||||
| Other current assets | 177.9 | 187.0 | 185.2 | |||||||||
| Total current assets | 3,046.7 | 3,167.8 | 2,967.0 | |||||||||
| Property, plant and equipment, net | 2,585.0 | 2,549.6 | 2,336.4 | |||||||||
| Goodwill | 932.5 | 932.5 | 916.9 | |||||||||
| Intangible assets, net | 539.5 | 566.4 | 600.9 | |||||||||
| Deferred tax assets | 238.2 | 266.2 | 333.3 | |||||||||
| Other assets | 222.4 | 105.1 | 108.6 | |||||||||
| Total assets | $ | 7,564.3 | $ | 7,587.6 | $ | 7,263.1 | ||||||
| Liabilities, Non-Controlling Interest and Stockholders’ Equity | ||||||||||||
| Accounts payable | $ | 583.3 | $ | 671.7 | $ | 612.0 | ||||||
| Accrued expenses and other current liabilities | 603.4 | 659.1 | 585.8 | |||||||||
| Current portion of long-term debt | 130.8 | 138.5 | 747.2 | |||||||||
| Total current liabilities | 1,317.5 | 1,469.3 | 1,945.0 | |||||||||
| Long-term debt | 2,639.0 | 2,627.6 | 2,084.4 | |||||||||
| Deferred tax liabilities | 54.1 | 54.8 | 57.1 | |||||||||
| Other long-term liabilities | 333.0 | 241.8 | 225.1 | |||||||||
| Total liabilities | 4,343.6 | 4,393.5 | 4,311.6 | |||||||||
| ON Semiconductor Corporation stockholders’ equity: | ||||||||||||
| Common stock | 5.6 | 5.6 | 5.5 | |||||||||
| Additional paid-in capital | 3,722.5 | 3,702.3 | 3,615.5 | |||||||||
| Accumulated other comprehensive loss | (43.7 | ) | (37.9 | ) | (34.4 | ) | ||||||
| Accumulated earnings | 1,093.7 | 979.6 | 491.7 | |||||||||
| Less: Treasury stock, at cost | (1,579.9 | ) | (1,478.0 | ) | (1,149.9 | ) | ||||||
| Total ON Semiconductor Corporation stockholders’ equity | 3,198.2 | 3,171.6 | 2,928.4 | |||||||||
| Non-controlling interest | 22.5 | 22.5 | 23.1 | |||||||||
| Total stockholders’ equity | 3,220.7 | 3,194.1 | 2,951.5 | |||||||||
| Total liabilities and stockholders’ equity | $ | 7,564.3 | $ | 7,587.6 | $ | 7,263.1 | ||||||
| ON SEMICONDUCTOR CORPORATION | ||||||||||||
| UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND | ||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||
|
(in millions) |
||||||||||||
| Quarters Ended | ||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | ||||||||||
| Net income | $ | 114.1 | $ | 166.0 | $ | 140.5 | ||||||
| Adjusted for: | ||||||||||||
| Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||
| R&D costs related to licensing income | — | — | 2.8 | |||||||||
| Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||
| Intangible asset impairment | 1.2 | 3.5 | — | |||||||||
| Interest expense | 31.7 | 32.9 | 31.5 | |||||||||
| Interest income | (2.5 | ) | (2.8 | ) | (0.9 | ) | ||||||
| Income tax provision | 38.2 | 22.7 | 16.4 | |||||||||
| Net income attributable to non-controlling interest | — | (0.4 | ) | (0.9 | ) | |||||||
| Depreciation and amortization | 135.8 | 136.2 | 119.9 | |||||||||
| Amortization of fair market value step-up of inventory | — | 0.6 | — | |||||||||
| Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||
| Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||
| Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||
| Indemnification gain | (4.9 | ) | — | — | ||||||||
| Adjusted EBITDA | 322.5 | 358.6 | 304.2 | |||||||||
| Increase (decrease): | ||||||||||||
| Licensing income | — | 3.7 | 3.8 | |||||||||
| R&D costs related to licensing income | — | — | (2.8 | ) | ||||||||
| Restructuring, asset impairments and other, net | (5.6 | ) | 3.7 | (0.4 | ) | |||||||
| Interest expense | (31.7 | ) | (32.9 | ) | (31.5 | ) | ||||||
| Interest income | 2.5 | 2.8 | 0.9 | |||||||||
| Income tax provision | (38.2 | ) | (22.7 | ) | (16.4 | ) | ||||||
| Net income attributable to non-controlling interest | — | 0.4 | 0.9 | |||||||||
| Amortization of fair market value step-up of inventory | — | (0.6 | ) | — | ||||||||
| Adjustment to contingent consideration | — | — | 2.1 | |||||||||
| Actuarial losses on pension plans and other pension benefits | — | (5.8 | ) | — | ||||||||
| Third party acquisition and divestiture related costs | (3.3 | ) | (1.5 | ) | (0.4 | ) | ||||||
| Indemnification gain | 4.9 | — | — | |||||||||
| Loss (gain) on sale or disposal of fixed assets | 0.4 | (1.2 | ) | 1.3 | ||||||||
| Amortization of debt discount and issuance costs | 3.2 | 3.4 | 3.3 | |||||||||
| Share-based compensation expense | 19.7 | 18.9 | 18.4 | |||||||||
| Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||
| Change in deferred taxes | 29.0 | (10.7 | ) | 7.5 | ||||||||
| Other | (4.3 | ) | 2.0 | (1.2 | ) | |||||||
| Changes in operating assets and liabilities | (170.0 | ) | 93.4 | (71.9 | ) | |||||||
| Net cash provided by operating activities | $ | 138.2 | $ | 421.0 | $ | 226.5 | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of property, plant and equipment | $ | (157.0 | ) | $ | (132.0 | ) | $ | (99.5 | ) | |||
| Proceeds from sales of property, plant and equipment | — | 30.2 | 5.6 | |||||||||
|
Deposits utilized (made) for purchase of property, plant and equipment |
(10.1 | ) | 9.7 | (11.6 | ) | |||||||
| Purchase of equity interest and assets, net of cash acquired | — | (4.8 | ) | — | ||||||||
| Proceeds from divestiture of business, net of cash transferred | — | 1.1 | — | |||||||||
| Other | — | 2.2 | — | |||||||||
| Net cash used in investing activities | $ | (167.1 | ) | $ | (93.6 | ) | $ | (105.5 | ) | |||
| Cash flows from financing activities: | ||||||||||||
| Proceeds for the issuance of common stock under the ESPP | 7.4 | $ | 6.3 | $ | — | |||||||
| Proceeds from exercise of stock options | 0.5 | 1.3 | 3.6 | |||||||||
| Payment of tax withholding for RSUs | (26.1 | ) | (2.4 | ) | (18.8 | ) | ||||||
| Repurchase of common stock | (75.0 | ) | (200.3 | ) | — | |||||||
| Proceeds from debt issuance | 4.5 | 7.1 | 5.3 | |||||||||
| Repayment of long-term debt | (12.2 | ) | (18.5 | ) | (135.9 | ) | ||||||
| Payment of finance lease obligations | (0.2 | ) | (0.3 | ) | (1.1 | ) | ||||||
| Dividend to non-controlling shareholder | — | (2.2 | ) | — | ||||||||
| Net cash used in financing activities | $ | (101.1 | ) | $ | (209.0 | ) | $ | (146.9 | ) | |||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
$ | — | $ | 0.2 | $ | 1.6 | ||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (130.0 | ) | $ | 118.6 | $ | (24.3 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | $ | 1,087.1 | $ | 968.5 | $ | 966.6 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 957.1 | $ | 1,087.1 | $ | 942.3 | ||||||
| ON SEMICONDUCTOR CORPORATION | |||||||||||||||
| RECONCILIATION OF GAAP VERSUS NON-GAAP DISCLOSURES | |||||||||||||||
|
(in millions, except per share and percentage data) |
|||||||||||||||
| Quarters Ended | |||||||||||||||
| March 29, 2019 | December 31, 2018 | March 30, 2018 | |||||||||||||
| Reconciliation of GAAP gross profit to non-GAAP gross profit: | |||||||||||||||
| GAAP gross profit | $ | 513.7 | $ | 569.7 | $ | 517.4 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| Total special items | — | 0.6 | — | ||||||||||||
| Non-GAAP gross profit | $ | 513.7 | $ | 570.3 | $ | 517.4 | |||||||||
| Reconciliation of GAAP gross margin to non-GAAP gross margin: | |||||||||||||||
| GAAP gross margin | 37.0 | % | 37.9 | % | 37.6 | % | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | % | — | % | — | % | ||||||||
| Total special items | — | % | — | % | — | % | |||||||||
| Non-GAAP gross margin | 37.0 | % | 37.9 | % | 37.6 | % | |||||||||
|
Reconciliation of GAAP operating expenses to non-GAAP operating expenses: |
|||||||||||||||
| GAAP operating expenses | $ | 334.3 | $ | 347.0 | $ | 331.7 | |||||||||
| Special items: | |||||||||||||||
| a) | Amortization of acquisition-related intangible assets | (25.7 | ) | (28.4 | ) | (27.4 | ) | ||||||||
| b) | Restructuring, asset impairments and other, net | (5.6 | ) | 3.7 | (0.4 | ) | |||||||||
| c) | Intangible asset impairment | (1.2 | ) | (3.5 | ) | — | |||||||||
| d) | Third party acquisition and divestiture related costs | (3.3 | ) | (1.5 | ) | (0.4 | ) | ||||||||
| e) | R&D costs related to licensing income | — | — | (2.8 | ) | ||||||||||
| Total special items | (35.8 | ) | (29.7 | ) | (31.0 | ) | |||||||||
| Non-GAAP operating expenses | $ | 298.5 | $ | 317.3 | $ | 300.7 | |||||||||
|
Reconciliation of GAAP operating income to non-GAAP operating income: |
|||||||||||||||
| GAAP operating income | $ | 179.4 | $ | 222.7 | $ | 185.7 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| Total special items | 35.8 | 30.3 | 31.0 | ||||||||||||
| Non-GAAP operating income | $ | 215.2 | $ | 253.0 | $ | 216.7 | |||||||||
|
Reconciliation of GAAP operating margin to non-GAAP operating margin (operating income / revenue): |
|||||||||||||||
| GAAP operating margin | 12.9 | % | 14.8 | % | 13.5 | % | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | % | — | % | — | % | ||||||||
| b) | Amortization of acquisition-related intangible assets | 1.9 | % | 1.9 | % | 2.0 | % | ||||||||
| c) | Restructuring, asset impairments and other, net | 0.4 | % | (0.2 | )% | — | % | ||||||||
| d) | Intangible asset impairment | 0.1 | % | 0.2 | % | — | % | ||||||||
| e) | Third party acquisition and divestiture related costs | 0.2 | % | 0.1 | % | — | % | ||||||||
| f) | R&D costs related to licensing income | — | % | — | % | 0.2 | % | ||||||||
| Total special items | 2.6 | % | 2.0 | % | 2.2 | % | |||||||||
| Non-GAAP operating margin | 15.5 | % | 16.8 | % | 15.7 | % | |||||||||
|
Reconciliation of GAAP income before income taxes to non-GAAP income before income taxes: |
|||||||||||||||
| GAAP income before income taxes | $ | 152.3 | $ | 188.7 | $ | 156.9 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| g) | Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||||
| h) | Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||||
| i) | Indemnification gain | (4.9 | ) | — | — | ||||||||||
| j) | Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||||
| k) | Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||||
| Total special items | 40.0 | 41.9 | 33.8 | ||||||||||||
| Non-GAAP income before income taxes | $ | 192.3 | $ | 230.6 | $ | 190.7 | |||||||||
|
Reconciliation of GAAP net income attributable to ON Semiconductor Corporation to non-GAAP net income attributable to ON Semiconductor Corporation: |
|||||||||||||||
| GAAP net income attributable to ON Semiconductor Corporation | $ | 114.1 | $ | 165.6 | $ | 139.6 | |||||||||
| Special items: | |||||||||||||||
| a) | Expensing of appraised inventory at fair market value step-up | — | 0.6 | — | |||||||||||
| b) | Amortization of acquisition-related intangible assets | 25.7 | 28.4 | 27.4 | |||||||||||
| c) | Restructuring, asset impairments and other, net | 5.6 | (3.7 | ) | 0.4 | ||||||||||
| d) | Intangible asset impairment | 1.2 | 3.5 | — | |||||||||||
| e) | Third party acquisition and divestiture related costs | 3.3 | 1.5 | 0.4 | |||||||||||
| f) | R&D costs related to licensing income | — | — | 2.8 | |||||||||||
| g) | Actuarial losses on pension plans and other pension benefits | — | 5.8 | — | |||||||||||
| h) | Non-cash interest on convertible notes | 9.1 | 9.5 | 8.7 | |||||||||||
| i) | Indemnification gain | (4.9 | ) | — | — | ||||||||||
| j) | Adjustment to contingent consideration | — | — | (2.1 | ) | ||||||||||
| k) | Licensing income | — | (3.7 | ) | (3.8 | ) | |||||||||
| l) | Adjustment of income taxes | 23.0 | 14.5 | (2.7 | ) | ||||||||||
| Total special items | 63.0 | 56.4 | 31.1 | ||||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 177.1 | $ | 222.0 | $ | 170.7 | |||||||||
| Adjustment of income taxes: | |||||||||||||||
| Tax adjustment for special items (1) | $ | (8.4 | ) | $ | (8.8 | ) | $ | (7.1 | ) | ||||||
| Other non-GAAP tax adjustment (2) | 31.0 | 36.4 | 4.4 | ||||||||||||
| Non-cash impact of U.S. tax reform (3) | — | 35.1 | — | ||||||||||||
| Impact of U.S. tax method changes | — | (48.2 | ) | — | |||||||||||
| Tax indemnified by third parties | 0.4 | — | — | ||||||||||||
| Total adjustment of income taxes | $ | 23.0 | $ | 14.5 | $ | (2.7 | ) | ||||||||
|
Reconciliation of GAAP diluted share count to non-GAAP diluted share count: |
|||||||||||||||
| GAAP diluted share count | 417.7 | 420.0 | 444.2 | ||||||||||||
| Special items: | |||||||||||||||
| a) | Dilutive share count attributable to convertible notes | (3.9 | ) | — | (12.6 | ) | |||||||||
| Total special items | (3.9 | ) | — | (12.6 | ) | ||||||||||
| Non-GAAP diluted share count | 413.8 | 420.0 | 431.6 | ||||||||||||
| Non-GAAP diluted earnings per share: | |||||||||||||||
| Non-GAAP net income attributable to ON Semiconductor Corporation | $ | 177.1 | $ | 222.0 | $ | 170.7 | |||||||||
| Non-GAAP diluted share count | 413.8 | 420.0 | 431.6 | ||||||||||||
| Non-GAAP diluted earnings per share | $ | 0.43 | $ | 0.53 | $ | 0.40 | |||||||||
|
Reconciliation of net cash provided by operating activities to free cash flow: |
|||||||||||||||
| Net cash provided by operating activities | $ | 138.2 | $ | 421.0 | $ | 226.5 | |||||||||
| Special items: | |||||||||||||||
| a) | Purchase of property, plant and equipment | (157.0 | ) | (132.0 | ) | (99.5 | ) | ||||||||
| Total special items | (157.0 | ) | (132.0 | ) | (99.5 | ) | |||||||||
| Free cash flow | $ | (18.8 | ) | $ | 289.0 | $ | 127.0 | ||||||||
| (1) |
Tax impact of non-GAAP special items (a-k) is calculated using the federal statutory rate of 21% for all periods presented. |
||||||||||||||
| (2) |
The income tax adjustment primarily represents the use of the net operating loss, non-cash impact of not asserting indefinite reinvestment on earnings of our foreign subsidiaries, deferred tax expense not affecting taxes payable, and non-cash expense (benefit) related to uncertain tax positions. |
||||||||||||||
| (3) |
Tax impacts of U.S. tax reform legislation, H.R.1, commonly referred to as the “Tax Cuts and Jobs Act,” and related provisional impacts recorded pursuant to Staff Accounting Bulletin (SAB) No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. |
||||||||||||||
Contacts
Kris Pugsley
Corporate/Media Communications
ON Semiconductor
(312)
909-0661
[email protected]
Parag Agarwal
Vice President – Investor Relations & Corporate
Development
ON Semiconductor
(602) 244-3437
[email protected]
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Cannabis
Cannabis Capsule Global Analysis Report 2024: Market to Reach $79.2 Billion in 2028 – Forecast to 2033 Featuring GW Pharmaceuticals, Trulieve Cannabis, Green Thumb Industries, Tilray, Columbia Care
Innocan
Innocan Pharma Initiates FDA Approval Process for Liposome Injection Therapy for Chronic Pain
With its submission of a Pre-IND Meeting Request Letter, Innocan initiates the regulatory process with the U.S. Food and Drug Administration (FDA) for the approval of its prolonged CBD release technology for human use
HERZLIYA, Israel and CALGARY, AB, April 22, 2024 /PRNewswire/ — Innocan Pharma Corporation (CSE: INNO) (FSE: IP4) (OTCQB: INNPF) (“Innocan” or the “Company”), is pleased to announce that is has reached a key milestone: the Company submitted its letter of application for a Pre-IND meeting, the first phase in the FDA approval process in the United States for Innocan’s Liposome-Cannabidiol (LPT-CBD) injectable treatment of chronic pain.
With the global market for pain therapeutics widely expected to exceed US$100 billion by 2032[1], LPT therapy which requires only one single monthly subcutaneous injection, is positioned as a highly attractive alternative to opioid-based approaches. Opioids have and continue to take a significant human toll in recent years, with more than three-quarters of drug overdose deaths in the United States involving opioids, according to the United States Center for Disease Control and Prevention[2].
Innocan’s therapy has shown consistent efficacy in multiple pre-clinical trials in recent years of it’s LPT-CBD injectable treatment through prolonged and controlled release of CBD in animals with chronic pain conditions. Innocan’s Pre-IND Meeting Request Letter to the FDA is a key milestone and important first step in seeking approval of its LPT-CBD therapy for use in humans. At the Pre-IND meeting, the objective will be to obtain guidance from the FDA on the preclinical and clinical development plan, enabling the initiation of an Investigational New Drug (IND) program in the United States.
Iris Bincovich, CEO of Innocan, commented: “We are extremely excited to embark on this next stage in the development of LPT-CBD injectables, this is a major Milestone for Innocan Pharma. We have invested significant effort and many thousands of person-hours in its research and development, accumulating a wealth of preclinical data that will serve as the foundation for our participation in the FDA process. This is a key milestone for Innocan and marks our first step towards the FDA’s recognition of our technology. We see significant potential for our therapy, with an addressable market for pain management therapeutics expected to exceed US $100 billion by 2032, and we look forward to tapping that.“
Dr. Joseph Pergolizzi, Innocan’s FDA Advisory Board Member, added:
“We have worked hard to catalogue the data collected as part of our animal LPT therapy testing program and prepare it for the FDA. We look forward to working under FDA guidance, with the goal of completing the review process as quickly and efficiently as possible. We believe that Innocan’s unique treatment method, if and when it should become FDA-approved has the potential of being a highly valuable non-opioid addition in the medical arsenal of the management of chronic pain.”
About Innocan
Innocan is a pharmaceutical tech company that operates under two main segments: Pharmaceuticals and Consumer Wellness. In the Pharmaceuticals segment, Innocan focuses on developing innovative drug delivery platform technologies based on advanced cannabinoids science, to treat various conditions to improve patients’ quality of life. This segment involves two drug delivery technologies: (i) LPT CBD- loaded liposome platform facilitating exact dosing and the prolonged and controlled release of CBD into the blood stream. The LPT delivery platform research is in the preclinical trial phase for: Pain Management. In the Consumer Wellness segment, Innocan develops and markets a wide portfolio of innovative and high-performance self-care products to promote a healthier lifestyle. Under this segment, Innocan has established a joint venture by the name of BI Sky Global Ltd. that focuses on advanced targeted online sales. https://innocanpharma.com/
For further information, please contact:
For Innocan Pharma Corporation:
Iris Bincovich, CEO
+1-516-210-4025
+972-54-3012842
+442037699377
[email protected]
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATION SERVICES PROVIDER HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Cautionary note regarding forward-looking information
Certain information set forth in this news release, including, without limitation, information regarding research and development, collaborations, the filing of potential applications with the FDA and other regulatory authorities, the potential achievement of future regulatory milestones, the potential for treatment of conditions and other therapeutic effects resulting from research activities and/or the Company’s products, requisite regulatory approvals and the timing for market entry, is forward-looking information within the meaning of applicable securities laws. By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Innocan’s control. The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Innocan, including expectations and assumptions concerning the anticipated benefits of the products, satisfaction of regulatory requirements in various jurisdictions and satisfactory completion of requisite production and distribution arrangements.
Forward-looking information is subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include but are not limited to: general global and local (national) economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; and relationships with suppliers, manufacturers, customers, business partners and competitors. There are also risks that are inherent in the nature of product distribution, including import / export matters and the failure to obtain any required regulatory and other approvals (or to do so in a timely manner) and availability in each market of product inputs and finished products. The anticipated timeline for entry to markets may change for a number of reasons, including the inability to secure necessary regulatory requirements, or the need for additional time to conclude and/or satisfy the manufacturing and distribution arrangements. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of launch of product distribution. A comprehensive discussion of other risks that impact Innocan can also be found in Innocan’s public reports and filings which are available under Innocan’s profile at www.sedar.com.
Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Innocan does not undertake to update, correct or revise any forward looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.
[1] https://www.gminsights.com/industry-analysis/pain-management-drugs-market
[2] https://www.cdc.gov/opioids/data/index.html
Logo – https://mma.prnewswire.com/media/2046271/3968398/Innocan_Pharma_Corporation_Logo.jpg
View original content:https://www.prnewswire.co.uk/news-releases/innocan-pharma-initiates-fda-approval-process-for-liposome-injection-therapy-for-chronic-pain-302122779.html
Bolsters Company’s Advantage in Several Key Emerging Markets, including Australia, New Zealand, Germany, Poland and the United Kingdom
NEW YORK, April 22, 2024 /PRNewswire/ — Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf” or the “Company”), a leading international provider of consumer cannabis products, announced today the closing of its acquisition of Northern Green Canada (“NGC”), a vertically integrated Canadian licensed cannabis producer focused primarily on expanding in the international market through its EU-GMP certification. The accretive acquisition amplifies the Company’s strategic advantage in established European markets including Germany, Poland and the United Kingdom and provides a foothold in the emerging markets of Australia and New Zealand.
Integrating NGC’s international operation will equip Curaleaf with a secure and consistent high quality, non-irradiated, indoor EU-GMP flower supply, essential to maintaining its leading positions in Germany, the United Kingdom and Poland.
“We are thrilled to welcome NGC formally to the Curaleaf family of global brands,” said Boris Jordan, Founder and Executive Chairman of Curaleaf. “This is an incredibly important deal for our international expansion strategy, as we’ll be able to bolster our supply of high quality EU-GMP certified flower immediately to key European markets as well as enter the fast-growing markets of Australia and New Zealand.”
The global cannabis market is projected to generate $55 billion in sales by 2027. Emerging markets beyond the United States and Canada, including Germany, Australia and New Zealand are expected to contribute $6.3 billion of the $55 billion projection.
Terms of the acquisition of NGC include an initial payment at closing of the Company’s Subordinate Voting Shares valued at approximately US $16 million, subject to a typical post-closing adjustment. An earnout may also be paid in 2025 based upon 2024 performance of NGC’s operations, up to 50% of which will be cash and the rest paid in additional Subordinate Voting Shares. The issuance of Subordinate Voting Shares in connection with the acquisition of NGC has been conditionally approved by the Toronto Stock Exchange, subject to fulfilling customary listing conditions.
About Curaleaf Holdings
Curaleaf Holdings, Inc. (TSX: CURA) (OTCQX: CURLF) (“Curaleaf”) is a leading international provider of consumer products in cannabis with a mission to enhance lives by cultivating, sharing and celebrating the power of the plant. As a high-growth cannabis company known for quality, expertise and reliability, the Company and its brands, including Curaleaf, Select, Grassroots, JAMS, Find and Zero Proof provide industry-leading service, product selection and accessibility across the medical and adult use markets. Curaleaf International is the largest vertically integrated cannabis company in Europe with a unique supply and distribution network throughout the European market, bringing together pioneering science and research with cutting-edge cultivation, extraction and production. Curaleaf is listed on the Toronto Stock Exchange under the symbol CURA and trades on the OTCQX market under the symbol CURLF. For more information, please visit https://ir.curaleaf.com.
Forward Looking Statements
This media advisory contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward–looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “expects” or, “proposed”, “is expected”, “intends”, “anticipates”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the expected benefits of the acquisition of NGC, and the Company’s planned expansion on internal markets, the Company’s anticipated strategic advantages in European markets and emerging markets, the integration of NGC’s internal operations, the anticipated global cannabis market, and the listing of shares issuable in connection with the acquisition on the Toronto Stock Exchange. Such forward-looking statements and information reflect management’s current beliefs and are based on assumptions made by and information currently available to the Company with respect to the matters described in this new release, including the Company’s ability to successfully realize the expected benefits of the acquisition, and the Company’s ability to fulfil the listing conditions imposed by the Toronto Stock Exchange. Forward-looking statements involve risks and uncertainties, which are based on current expectations as of the date of this release and subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including the failure to realize the expected benefits of the acquisition, or the Company’s failure to fulfil the listing conditions imposed by the Toronto Stock Exchange. Additional information about these assumptions and risks and uncertainties is contained under “Risk Factors and Uncertainties” in the Company’s latest annual information form filed on March 6, 2024, which is available under the Company’s SEDAR profile at http://www.sedar.com, and in other filings that the Company has made and may make with applicable securities authorities in the future. Forward-looking statements contained herein are made only as to the date of this press release and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release. The Toronto Stock Exchange has not reviewed, approved or disapproved the content of this news release.
INVESTOR CONTACT
Curaleaf Holdings, Inc.
Camilo Lyon, Chief Investment Officer
[email protected]
MEDIA CONTACT
Curaleaf Holdings, Inc.
Tracy Brady, SVP Corporate Communications
[email protected]
View original content:https://www.prnewswire.co.uk/news-releases/curaleaf-completes-acquisition-of-northern-green-canada-302123010.html
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