...Overall Product Revenues Increase 24% - Integrated Circuit Revenues
ON Semiconductor (Nasdaq: ONNN) today announced that total product
revenues in the fourth quarter of 2000 were $490.7 million, an increase of
$62.9 million, or 15%, compared to the fourth quarter of 1999. Excluding
amortisation of intangibles and other charges, net income was $21.2
million, or $0.12 per diluted share, in the fourth quarter of 2000
compared to $21.2 million, or $0.10 per diluted share, in the fourth
quarter of 1999. Including amortisation of intangibles and other charges,
the Company reported net income of $17.7 million, or $0.10 per diluted
share, for the fourth quarter of 2000 compared to $19.0 million, or $0.09
per diluted share, in the fourth quarter of 1999. The above results are
consistent with the revised fourth quarter guidance given by the Company
on December 12, 2000.
Product revenue in 2000 was a record $2.012 billion, an increase of $388.0
million, or 24%, compared to pro forma 1999. Excluding amortisation of
intangibles and other charges, net income was a record $117.7 million, or
$0.66 per diluted share, in 2000 compared to $61.8 million, or $0.25 per
diluted share, in pro forma 1999. Including amortisation of intangibles
and other charges, the Company reported net income of $71.1 million, or
$0.38 per diluted share, in the 2000 compared to $59.6 million, or $0.24
per diluted share, in pro forma 1999.
The combined integrated circuit businesses, which include the company's
strategic analogue and broadband businesses, achieved record revenues in
2000 and as of year end, represented 52% of total product revenues,
compared to 45% at the end of fiscal year 1999.
Revenue from integrated circuits increased 44% for the full year compared
to 1999 and was up 30% in the fourth quarter of 2000, compared to the
fourth quarter of 1999. In the fourth quarter of 2000, analogue revenues
increased 42% to $128.1 million and broadband revenues were up 34% to
$78.3 million, compared to the fourth quarter 1999.
Product gross margin was 35.4% in 2000 compared to 30.4% in pro forma 1999
and 34.3% in the fourth quarter of 2000, compared to 31.2% in the fourth
quarter of 1999. Earnings before interest, taxes, depreciation and
amortisation, excluding minority interests and other charges in 2000 were
$463.1 million, compared to $375.4 million in pro forma 1999 and $98.7
million the fourth quarter of 2000, compared to $105.8 million in the
fourth quarter of 1999.
Commenting on the results, Steve Hanson, President and Chief Executive
Officer of ON Semiconductor, said, "The growth in our integrated circuit
revenues and margin expansion is evidence that we continue to make
progress in focusing ON Semiconductor toward fast growing,
high-performance broadband and power-management integrated circuits used
in numerous advanced devices, ranging from high-speed fibre optic
networking equipment to today's advanced portable electronics."
Citing the proof of the Company's progress in executing this product
transition, Hanson commented, "In a little over a year as an independent
company, ON Semiconductor has established itself as the second leading
provider of analogue power-management semiconductors worldwide according
to Venture Development Group. This year alone, ON sold more than $500
million in analogue and $300 million in broadband semiconductors."
Noting the Company's commitment to new product development, Hanson added,
"ON Semiconductor introduced 160 new products in the fourth quarter of
2000, bringing the total new product introductions for the year to more
than 400, more than doubling new product introductions in 1999. With 2000
R&D spending of $69.2 million including $20.6 million in the fourth
quarter, we continue to make progress toward our target of tripling our
new product research and development investment by the year 2001 compared
to 1999. Approximately eighty percent of this investment is focused on
our higher growth, higher margin analogue and broadband businesses."
The Company provides the following forward-looking statements based on
current market conditions and expectations:
· Product revenues in the first quarter of 2001 are expected to be down
10% to 12% compared to product revenue of $451.5 million reported in the
first quarter of 2000. The Company believes this expected decline is
consistent with the expectations of other large semiconductor
· While visibility remains limited, the Company expects, based on current
market projections, to see record revenues in the second half of 2001.
· The Company maintains its commitment to invest in R&D at levels
previously stated, expected to be between $110 and $120 million in fiscal
2001, primarily focused on our high-growth, high-margin analogue and
· Now that the Company has substantially completed its separation from
Motorola, it will move into the next phase of transformation in which it
expects to reduce SG&A expenses through improved process efficiencies,
reduced outside services and limited work force reductions. These actions
are expected to lower SG&A cost by approximately 20% or $60 million in
2001 compared to 2000. The Company expects this to result in a
restructuring charge in the first quarter of 2001.
In closing, Hanson stated, "As a result of the Company's continued
migration towards higher growth and higher margin products combined with
the anticipated positive impact of the SG&A cost transformation, the
Company expects, based on current market projections, record gross and
operating margins in the second half of 2001."
Notes to the Editor:
About ON Semiconductor
ON Semiconductor (Nasdaq: ONNN) is a global supplier of high-performance
broadband and power management integrated circuits and standard
semiconductors used in numerous advanced devices ranging from high-speed
fibre optic networking equipment to the precise power management functions
in today's advanced portable electronics. For more information visit ON
Semiconductor's Web site at http://www.onsemi.com
ON Semiconductor and the ON Semiconductor logo are 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.
Geert de Vuyst
Jonathan Batty/Joanna Lane
(On behalf of ON Semiconductor)
This press release includes "forward-looking statements" as that term is
defined in the Private Litigation Reform Act of 1995. Forward-looking
statements are often characterised by the use of words such as "believes,"
"expects," "estimates," "projects," "may," "will," "intends," "plans," or
"anticipates," or by discussions of strategy, plans or intentions. All
forward-looking statements in this press release are made based on
management's current expectations and estimates, which involve risks,
uncertainties and other factors that could cause results to differ
materially from those expressed in forward-looking statements. Among these
factors are changes in overall economic conditions, the cyclical nature of
the semiconductor industry, changes in demand for our products, changes in
inventories at our customers and distributors, technological and product
development risks, availability of manufacturing capacity, availability of
raw materials, competitors' actions relating to products and pricing, loss
of key customers, order cancellations or reduced bookings, changes in
manufacturing yields, control of costs and expenses, risks associated with
acquisitions, changes in management and risks involving environmental or
other governmental regulation. Additional factors that could affect the
company's future operating results are described under "Risk Factors" in
the Registration Statement on Form S-1 and the Prospectus dated April 27,
2000 relating to our initial public offering, and other factors as listed
from time to time in our SEC filings. Readers are cautioned not to place
undue reliance on forward-looking statements. We assume no obligation to
update such information.
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