Record automotive revenue in 2023 increased 29%
year-over-year
onsemi (the “Company”) (Nasdaq: ON) today announced its
fourth quarter and fiscal year 2023 results with the following
highlights:
- Fourth quarter revenue of $2,018.1 million
- Fourth quarter GAAP and non-GAAP gross margin of 46.7%
- GAAP operating margin and non-GAAP operating margin of 30.3%
and 31.6%, respectively
- GAAP diluted earnings per share and non-GAAP diluted earnings
per share of $1.28 and $1.25, respectively
- Full year 2023 record automotive revenue of $4.3 billion
increased 29% year-over-year
- Full year 2023 share repurchases of $564 million, representing
140% of free cash flow
“Our momentum continued this past year as we achieved record
automotive revenue and 4x year-over-year growth in silicon carbide
revenue. We continue to transform the business by building
resilience into our model, enabling us to navigate uncertain market
conditions and deliver more predictable and sustainable results,”
said Hassane El-Khoury, president and chief executive officer of
onsemi. “Our consistent performance has validated our long-term
strategy. Looking ahead, we are driving innovation beyond silicon
and silicon carbide with our upcoming analog and mixed signal
platform to further our leadership in intelligent power and sensing
solutions.”
Selected financial results for the quarter are shown below
with comparable periods:
GAAP
Non-GAAP
Three Months Ended
Three Months Ended
(Revenue and Net Income in
millions)
Q4 2023
Q3 2023
Q4 2022
Q4 2023
Q3 2023
Q4 2022
Revenue
$
2,018.1
$
2,180.8
$
2,103.6
$
2,018.1
$
2,180.8
$
2,103.6
Gross Margin
46.7
%
47.3
%
48.5
%
46.7
%
47.3
%
48.4
%
Operating Margin
30.3
%
31.5
%
33.5
%
31.6
%
32.6
%
34.1
%
Net Income attributable to onsemi
$
562.7
$
582.7
$
604.3
$
540.9
$
608.4
$
580.4
Diluted Earnings Per Share
$
1.28
$
1.29
$
1.35
$
1.25
$
1.39
$
1.32
Selected financial results for 2023 and 2022 are shown
below:
GAAP
Non-GAAP
Year Ended
Year Ended
(Revenue and Net Income in
millions)
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Revenue
$
8,253.0
$
8,326.2
$
8,253.0
$
8,326.2
Gross Margin
47.1
%
49.0
%
47.1
%
49.2
%
Operating Margin
30.8
%
28.3
%
32.3
%
34.5
%
Net Income attributable to onsemi
$
2,183.7
$
1,902.2
$
2,256.2
$
2,347.7
Diluted Earnings Per Share
$
4.89
$
4.25
$
5.16
$
5.33
Revenue Summary
($ in millions)
(Unaudited)
Three Months Ended
Business Segment
Q4 2023
Q3 2023
Q4 2022
Sequential Change
Year-over-Year Change
PSG
$
1,085.8
$
1,230.6
$
1,048.4
(12
)%
4
%
ASG
624.6
621.6
701.0
—
%
(11
)%
ISG
307.7
328.6
354.2
(6
)%
(13
)%
Total
$
2,018.1
$
2,180.8
$
2,103.6
(7
)%
(4
)%
Year Ended
Business Segment
December 31, 2023
December 31, 2022
Year-over-Year Change
PSG
$
4,449.0
$
4,208.2
6
%
ASG
2,488.5
2,841.3
(12
)%
ISG
1,315.5
1,276.7
3
%
Total
$
8,253.0
$
8,326.2
(1
)%
FIRST QUARTER 2024 OUTLOOK
The following table outlines onsemi's projected first quarter of
2024 GAAP and non-GAAP outlook.
Total onsemi
GAAP
Special
Items **
Total onsemi
Non-GAAP***
Revenue
$1,800 to $1,900 million
—
$1,800 to $1,900 million
Gross Margin
44.4% to 46.4%
0.1%
44.5% to 46.5%
Operating Expenses
$320 to $335 million
$15 million
$305 to $320 million
Other Income and Expense (including
interest expense), net
($8 million)
—
($8 million)
Diluted Earnings Per Share
$0.94 to $1.06
$0.04
$0.98 to $1.10
Diluted Shares Outstanding *
437 million
4 million
433 million
*
Diluted shares outstanding can vary as a
result of, among other things, the 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 when the quarterly average stock price per share
exceeds $52.97 for the 0% Notes, and $103.87 for the 0.50% Notes,
the non-GAAP diluted share count and non-GAAP net income per share
include the anti-dilutive impact of the Company’s hedge
transactions issued concurrently with the 0% Notes and the 0.50%
Notes, respectively. At an average stock price per share between
$52.97 and $74.34 for the 0% Notes and $103.87 and $156.78 for the
0.50% Notes, the hedging activity offsets the potentially dilutive
effect of the 0% Notes and 0.50% Notes, respectively. In periods
when the quarterly average stock price exceeds $74.34 for the 0%
Notes, and $156.78 for the 0.50% Notes, the dilutive impact of the
warrants issued concurrently with such notes are included in the
diluted shares outstanding GAAP and non-GAAP diluted share counts
and are based on either the Company's previous quarter's average
stock price or the stock price as of the last day of the previous
quarter, whichever is higher.
**
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 and intangible asset 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
onsemi will host a conference call for the financial community
at 9 a.m. Eastern Time (EST) on Feb. 5, 2024 to discuss this
announcement and onsemi’s results for the fourth quarter of 2023
and fiscal year 2023. 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 by pre-registering
here.
About onsemi
onsemi (Nasdaq: ON) is driving disruptive innovations to
help build a better future. With a focus on automotive and
industrial end-markets, the company is accelerating change in
megatrends such as vehicle electrification and safety, sustainable
energy grids, industrial automation, and 5G and cloud
infrastructure. onsemi offers a highly differentiated and
innovative product portfolio, delivering intelligent power and
sensing technologies that solve the world’s most complex challenges
and leads the way to creating a safer, cleaner, and smarter world.
onsemi is recognized as a Fortune 500® company and included
in the Nasdaq-100 Index® and S&P 500® index. Learn more about
onsemi at www.onsemi.com.
onsemi and the onsemi 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. Although the Company references its
website in this news release, information on the website is not to
be incorporated herein.
This document includes “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 onsemi, including financial
guidance for the first fiscal quarter of 2024, and statements
regarding our new share repurchase program. Forward-looking
statements are often characterized by the use of words such as
“believes,” “estimates,” “expects,” “projects,” “may,” “will,”
“intends,” “plans,” “anticipates,” “should” or similar expressions
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. Certain factors that could affect our
future results or events are described under Part I, Item 1A “Risk
Factors” in our 2022 Annual Report on Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on February 6, 2023 (our
“2022 Form 10-K”) and Part II, Item IA “Risk Factors” in each of
our Quarterly Reports on Form 10-Q filed with the SEC for the
quarters ended March 31, 2023, June 30, 2023, and September 29,
2023, and from time-to-time in our other SEC reports (including in
our 2023 Form 10-K). 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.
Investing in our securities involves a high degree of risk and
uncertainty, and you should carefully consider the trends, risks,
and uncertainties described in this document, our 2022 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
STATEMENTS OF OPERATIONS
(in millions, except per share
and percentage data)
Quarter Ended
Year Ended
December 31, 2023
September 29, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Revenue
$
2,018.1
$
2,180.8
$
2,103.6
$
8,253.0
$
8,326.2
Cost of revenue
1,076.2
1,150.1
1,083.1
4,369.5
4,249.0
Gross profit
941.9
1,030.7
1,020.5
3,883.5
4,077.2
Gross margin
46.7
%
47.3
%
48.5
%
47.1
%
49.0
%
Operating expenses:
Research and development
150.2
143.4
136.4
577.3
600.2
Selling and marketing
67.5
68.2
74.2
279.1
287.9
General and administrative
88.6
110.7
97.2
362.4
343.2
Amortization of acquisition-related
intangible assets
12.1
12.0
16.1
51.1
81.2
Restructuring, asset impairments and other
charges, net
11.4
9.4
(7.7
)
74.9
17.9
Goodwill and intangible asset
impairment
—
—
—
—
386.8
Total operating expenses
329.8
343.7
316.2
1,344.8
1,717.2
Operating income
612.1
687.0
704.3
2,538.7
2,360.0
Other income (expense), net:
Interest expense
(15.8
)
(16.2
)
(27.5
)
(74.8
)
(94.9
)
Interest income
26.3
25.7
9.1
93.1
15.5
Gain (loss) on debt refinancing and
prepayment
—
—
0.2
(13.3
)
(7.1
)
Gain (loss) on divestiture of business
—
(0.1
)
64.9
(0.7
)
67.0
Other income (expense)
(11.7
)
1.1
12.3
(7.2
)
21.7
Other income (expense), net
(1.2
)
10.5
59.0
(2.9
)
2.2
Income before income taxes
610.9
697.5
763.3
2,535.8
2,362.2
Income tax provision
(47.5
)
(114.6
)
(159.0
)
(350.2
)
(458.4
)
Net income
563.4
582.9
604.3
2,185.6
1,903.8
Less: Net income attributable to
non-controlling interest
(0.7
)
(0.2
)
—
(1.9
)
(1.6
)
Net income attributable to ON
Semiconductor Corporation
$
562.7
$
582.7
$
604.3
$
2,183.7
$
1,902.2
Net income for diluted earnings per share
of common stock
$
562.8
$
583.1
$
604.8
$
2,185.0
$
1,904.2
Net income per share of common stock
attributable to ON Semiconductor Corporation:
Basic
$
1.31
$
1.35
$
1.40
$
5.07
$
4.39
Diluted
$
1.28
$
1.29
$
1.35
$
4.89
$
4.25
Weighted average common shares
outstanding:
Basic
428.1
431.2
432.2
430.7
433.2
Diluted
439.5
450.7
447.9
446.8
448.2
ON SEMICONDUCTOR
CORPORATION
UNAUDITED CONSOLIDATED BALANCE
SHEETS
(in millions)
December 31, 2023
September 29, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
2,483.0
$
2,679.2
$
2,919.0
Receivables, net
935.4
958.2
842.3
Inventories
2,111.8
2,084.8
1,616.8
Other current assets
382.1
363.2
351.3
Total current assets
5,912.3
6,085.4
5,729.4
Property, plant and equipment, net
4,401.5
4,314.5
3,450.7
Goodwill
1,577.6
1,577.6
1,577.6
Intangible assets, net
299.3
312.8
359.7
Deferred tax assets
600.8
579.3
376.7
ROU financing lease assets
42.4
43.0
45.8
Other assets
381.3
368.7
438.6
Total assets
$
13,215.2
$
13,281.3
$
11,978.5
Liabilities, Non-Controlling Interest
and Stockholders’ Equity
Accounts payable
$
725.6
$
911.3
$
852.1
Accrued expenses and other current
liabilities
663.2
665.4
1,047.3
Current portion of financing lease
liabilities
0.8
5.2
14.2
Current portion of long-term debt
794.0
912.9
147.8
Total current liabilities
2,183.6
2,494.8
2,061.4
Long-term debt
2,542.6
2,541.1
3,045.7
Deferred tax liabilities
38.7
35.1
34.1
Long-term financing lease liabilities
22.4
21.6
23.0
Other long-term liabilities
627.3
684.7
607.3
Total liabilities
5,414.6
5,777.3
5,771.5
ON Semiconductor Corporation stockholders’
equity:
Common stock
6.2
6.1
6.1
Additional paid-in capital
5,210.9
4,745.8
4,670.9
Accumulated other comprehensive loss
(45.2
)
(44.9
)
(23.2
)
Accumulated earnings
6,548.1
5,985.4
4,364.4
Less: Treasury stock, at cost
(3,937.4
)
(3,208.1
)
(2,829.7
)
Total ON Semiconductor Corporation
stockholders’ equity
7,782.6
7,484.3
6,188.5
Non-controlling interest
18.0
19.7
18.5
Total stockholders' equity
7,800.6
7,504.0
6,207.0
Total liabilities and stockholders'
equity
$
13,215.2
$
13,281.3
$
11,978.5
ON SEMICONDUCTOR
CORPORATION
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in millions)
Quarter Ended
Year Ended
December 31, 2023
September 29, 2023
December 31, 2022
December 31,
2023
December 31,
2022
Cash flows from operating activities:
Net income
$
563.4
$
582.9
$
604.3
$
2,185.6
$
1,903.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
160.3
155.4
133.2
609.5
551.8
(Gain) loss on sale or disposal of fixed
assets
4.3
2.5
0.5
11.6
(32.6
)
(Gain) loss on divestiture of
businesses
—
0.1
(64.9
)
0.7
(67.0
)
(Gain) loss on debt refinancing and
prepayment
—
—
(0.2
)
13.3
7.1
Amortization of debt discount and issuance
costs
2.6
2.9
2.4
11.3
11.0
Share-based compensation
30.7
31.1
24.3
121.1
100.8
Non-cash asset impairment charges
6.8
—
—
19.5
18.6
Goodwill and intangible asset impairment
charges
—
—
—
—
386.8
Change in deferred tax balances
(18.7
)
(79.4
)
67.7
(127.7
)
3.1
Other
(6.2
)
10.8
(0.5
)
(4.7
)
0.1
Changes in assets and liabilities
(132.0
)
(139.7
)
(35.5
)
(862.7
)
(250.4
)
Net cash provided by operating
activities
$
611.2
$
566.6
$
731.3
$
1,977.5
$
2,633.1
Cash flows from investing activities:
Purchase of Property, Plant and Equipment
("PP&E")
$
(390.5
)
$
(433.0
)
$
(342.0
)
$
(1,575.6
)
$
(1,005.0
)
Deposits and proceeds from sale of
PP&E
1.2
0.2
0.1
4.0
59.1
Deposits utilized (made) for purchase of
PP&E
4.1
12.9
22.7
36.5
(31.0
)
Divestiture of business, net of cash
transferred
—
—
172.6
—
263.1
Purchase of available-for-sale
securities
—
—
—
—
(18.0
)
Proceeds from sale or maturity of
available-for-sale securities
—
12.7
4.8
33.5
28.8
Payments related to acquisition of
business
—
—
—
(236.3
)
(2.4
)
Net cash used in investing activities
$
(385.2
)
$
(407.2
)
$
(141.8
)
$
(1,737.9
)
$
(705.4
)
Cash flows from financing activities:
Proceeds for the issuance of common stock
under the ESPP
$
5.9
$
6.7
$
4.7
$
25.8
$
22.9
Payment of tax withholding for RSUs
(4.4
)
(5.9
)
(10.7
)
(66.8
)
(78.1
)
Repurchase of common stock
(300.2
)
(100.0
)
(92.9
)
(564.2
)
(259.8
)
Issuance and borrowings under debt
agreements
—
—
—
1,845.0
500.0
Reimbursement of debt issuance costs
—
—
—
4.5
—
Payment of debt issuance and other
financing costs
(0.7
)
(0.3
)
—
(12.4
)
—
Repayment of borrowings under debt
agreements
(119.6
)
(0.1
)
(20.5
)
(1,723.4
)
(530.0
)
Payment for purchase of bond hedges
—
—
—
(414.0
)
—
Proceeds from issuance of warrants
—
—
—
242.5
—
Payments related to prior acquisition
(5.8
)
—
(9.2
)
(5.8
)
(9.2
)
Payment of finance lease obligations
(5.0
)
(1.7
)
1.0
(15.3
)
(11.5
)
Dividend to non-controlling
shareholder
(2.4
)
—
(2.1
)
(2.4
)
(4.3
)
Net cash used in financing activities
$
(432.2
)
$
(101.3
)
$
(129.7
)
$
(686.5
)
$
(370.0
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
0.4
(0.5
)
0.8
(1.1
)
(2.4
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(205.8
)
57.6
460.6
(448.0
)
1,555.3
Beginning cash, cash equivalents and
restricted cash
2,690.8
2,633.2
2,472.4
2,933.0
1,377.7
Ending cash, cash equivalents and
restricted cash
$
2,485.0
$
2,690.8
$
2,933.0
$
2,485.0
$
2,933.0
ON SEMICONDUCTOR
CORPORATION
RECONCILIATION OF GAAP VERSUS
NON-GAAP DISCLOSURES
(in millions, except per share
and percentage data)
Quarter Ended
Year Ended
December 31, 2023
September 29, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Reconciliation of GAAP to non-GAAP
gross profit:
GAAP gross profit
$
941.9
$
1,030.7
$
1,020.5
$
3,883.5
$
4,077.2
Special items:
a)
Impact of business wind down
—
—
(3.6
)
(3.9
)
19.5
b)
Amortization of acquisition-related
intangible assets
1.5
1.4
1.6
5.7
1.6
Total special items
1.5
1.4
(2.0
)
1.8
21.1
Non-GAAP gross profit
$
943.4
$
1,032.1
$
1,018.5
$
3,885.3
$
4,098.3
Reconciliation of GAAP to non-GAAP
gross margin:
GAAP gross margin
46.7
%
47.3
%
48.5
%
47.1
%
49.0
%
Special items:
a)
Impact of business wind down
—
%
—
%
(0.2
)%
—
%
0.2
%
b)
Amortization of acquisition-related
intangible assets
0.1
%
0.1
%
0.1
%
0.1
%
0.1
%
Total special items
0.1
%
0.1
%
(0.1
)%
—
%
0.3
%
Non-GAAP gross margin
46.7
%
47.3
%
48.4
%
47.1
%
49.2
%
Reconciliation of GAAP to non-GAAP
operating expenses:
GAAP operating expenses
$
329.8
$
343.7
$
316.2
$
1,344.8
$
1,717.2
Special items:
a)
Amortization of acquisition-related
intangible assets
(12.1
)
(12.0
)
(16.1
)
(51.1
)
(81.2
)
b)
Restructuring, asset impairments and
other, net
(11.4
)
(9.4
)
7.7
(74.9
)
(17.9
)
c)
Goodwill and intangible asset
impairment
—
—
—
—
(386.8
)
d)
Third party acquisition and divestiture
related costs
0.1
(0.1
)
(7.4
)
1.3
(12.9
)
e)
Impact of business wind down
—
—
—
—
6.8
Total special items
(23.4
)
(21.5
)
(15.8
)
(124.7
)
(492.0
)
Non-GAAP operating expenses
$
306.4
$
322.2
$
300.4
$
1,220.1
$
1,225.2
Reconciliation of GAAP to non-GAAP
operating income:
GAAP operating income
$
612.1
$
687.0
$
704.3
$
2,538.7
$
2,360.0
Special items:
a)
Amortization of acquisition-related
intangible assets
13.6
13.4
17.7
56.8
82.8
b)
Restructuring, asset impairments and
other, net
11.4
9.4
(7.7
)
74.9
17.9
c)
Goodwill and intangible asset
impairment
—
—
—
—
386.8
d)
Third party acquisition and divestiture
related costs
(0.1
)
0.1
7.4
(1.3
)
12.9
e)
Impact of business wind down
—
—
(3.6
)
(3.9
)
12.7
Total special items
24.9
22.9
13.8
126.5
513.1
Non-GAAP operating income
$
637.0
$
709.9
$
718.1
$
2,665.2
$
2,873.1
Reconciliation of GAAP to non-GAAP
operating margin (operating income / revenue):
GAAP operating margin
30.3
%
31.5
%
33.5
%
30.8
%
28.3
%
Special items:
a)
Amortization of acquisition-related
intangible assets
0.7
%
0.6
%
0.8
%
0.7
%
1.0
%
b)
Restructuring, asset impairments and
other, net
0.6
%
0.4
%
(0.4
)%
0.9
%
0.2
%
c)
Goodwill and intangible asset
impairment
—
%
—
%
—
%
—
%
4.6
%
d)
Third party acquisition and divestiture
related costs
—
%
—
%
0.4
%
—
%
0.2
%
e)
Impact of business wind down
—
%
—
%
(0.2
)%
—
%
0.2
%
Total special items
1.2
%
1.1
%
0.7
%
1.5
%
6.2
%
Non-GAAP operating margin
31.6
%
32.6
%
34.1
%
32.3
%
34.5
%
Reconciliation of GAAP to non-GAAP
income before income taxes:
GAAP income before income taxes
$
610.9
$
697.5
$
763.3
$
2,535.8
$
2,362.2
Special items:
a)
Amortization of acquisition-related
intangible assets
13.6
13.4
17.7
56.8
82.8
b)
Restructuring, asset impairments and
other, net
11.4
9.4
(7.7
)
74.9
17.9
c)
Goodwill and intangible asset
impairment
—
—
—
—
386.8
d)
Third party acquisition and divestiture
related costs
(0.1
)
0.1
7.4
(1.3
)
12.9
e)
Impact of business wind down
—
—
(3.6
)
(3.9
)
12.7
f)
Actuarial losses (gains) on pension plans
and other pension benefits
4.0
—
(22.0
)
4.0
(22.0
)
g)
Loss on debt refinancing and
prepayment
—
—
(0.2
)
13.3
7.1
h)
(Gain) loss on divestiture of
businesses
—
0.1
(64.9
)
0.7
(67.0
)
Total special items
28.9
23.0
(73.3
)
144.5
431.2
Non-GAAP income before income taxes
$
639.8
$
720.5
$
690.0
$
2,680.3
$
2,793.4
Reconciliation of GAAP to non-GAAP net
income attributable to ON Semiconductor Corporation:
GAAP net income attributable to ON
Semiconductor Corporation
$
562.7
$
582.7
$
604.3
$
2,183.7
$
1,902.2
Special items:
a)
Amortization of acquisition-related
intangible assets
13.6
13.4
17.7
56.8
82.8
b)
Restructuring, asset impairments and
other, net
11.4
9.4
(7.7
)
74.9
17.9
c)
Goodwill and intangible asset
impairment
—
—
—
—
386.8
d)
Third party acquisition and divestiture
related costs
(0.1
)
0.1
7.4
(1.3
)
12.9
e)
Impact of business wind down
—
—
(3.6
)
(3.9
)
12.7
f)
Actuarial losses (gains) on pension plans
and other pension benefits
4.0
—
(22.0
)
4.0
(22.0
)
g)
Loss on debt refinancing and
prepayment
—
—
(0.2
)
13.3
7.1
h)
(Gain) loss on divestiture of
businesses
—
0.1
(64.9
)
0.7
(67.0
)
i)
Income taxes
(50.7
)
2.7
49.4
(72.0
)
14.3
Total special items
(21.8
)
25.7
(23.9
)
72.5
445.5
Non-GAAP net income attributable to ON
Semiconductor Corporation
$
540.9
$
608.4
$
580.4
$
2,256.2
$
2,347.7
GAAP net income for diluted earnings per
share
$
562.8
$
583.1
$
604.8
$
2,185.0
$
1,904.2
Non-GAAP net income for diluted earnings
per share
$
541.0
$
608.8
$
580.9
$
2,257.5
$
2,349.7
Reconciliation of GAAP to non-GAAP
diluted shares outstanding:
GAAP diluted shares outstanding
439.5
450.7
447.9
446.8
448.2
Special items:
a)
Less: dilutive shares attributable to
convertible notes
(5.6
)
(11.4
)
(8.0
)
(9.1
)
(7.0
)
Total special items
(5.6
)
(11.4
)
(8.0
)
(9.1
)
(7.0
)
Non-GAAP diluted shares outstanding
433.9
439.3
439.9
437.7
441.2
Non-GAAP diluted earnings per
share:
Non-GAAP net income attributable to ON
Semiconductor Corporation
$
541.0
$
608.8
$
580.9
$
2,257.5
$
2,349.7
Non-GAAP diluted shares outstanding
433.9
439.3
439.9
437.7
441.2
Non-GAAP diluted earnings per share
$
1.25
$
1.39
$
1.32
$
5.16
$
5.33
Reconciliation of net cash provided by
operating activities to free cash flow:
Net cash provided by operating
activities
$
611.2
$
566.6
$
731.3
$
1,977.5
$
2,633.1
Special items:
a)
Purchase of property, plant and
equipment
(390.5
)
(433.0
)
(342.0
)
(1,575.6
)
(1,005.0
)
Total special items
(390.5
)
(433.0
)
(342.0
)
(1,575.6
)
(1,005.0
)
Free cash flow
$
220.7
$
133.6
$
389.3
$
401.9
$
1,628.1
Certain of the amounts in the above tables may not total due to
rounding of individual amounts.
Total share-based compensation related to restricted stock
units, stock grant awards and the employee stock purchase plan is
included below.
(in millions)
Quarter Ended
Year Ended
December 31, 2023
September 29, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Cost of revenue
$
4.7
$
4.8
$
3.1
$
18.1
$
12.0
Research and development
5.5
5.3
3.1
20.5
17.6
Selling and marketing
4.8
4.7
4.2
18.6
16.4
General and administrative
15.7
16.3
13.9
63.9
54.8
Total share-based compensation
$
30.7
$
31.1
$
24.3
$
121.1
$
100.8
ON SEMICONDUCTOR
CORPORATION
RECONCILIATION OF GAAP VERSUS
NON-GAAP DISCLOSURES (Continued)
(in millions, except per share
and percentage data)
SUPPLEMENTAL FINANCIAL DATA
(in millions)
Quarter Ended
Year Ended
December 31, 2023
September 29, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Net cash provided by operating
activities
$
611.2
$
566.6
$
731.3
$
1,977.5
$
2,633.1
Free cash flow
220.7
133.6
389.3
401.9
1,628.1
Cash paid for income taxes
100.8
99.8
113.7
428.2
443.2
Depreciation and amortization
$
160.3
$
155.4
$
133.2
$
609.5
$
551.8
Less: Amortization of acquisition-related
intangible assets
13.6
13.4
17.7
56.8
82.8
Depreciation and amortization (excl.
amortization of acquisition-related intangible assets)
$
146.7
$
142.0
$
115.5
$
552.7
$
469.0
NON-GAAP MEASURES
To supplement the consolidated financial results prepared in
accordance with GAAP, onsemi uses certain non-GAAP measures, which
are adjusted from the most directly comparable GAAP measures to
exclude items related to the amortization of acquisition-related
intangibles, expensing of appraised inventory fair market value
step-up, inventory valuation adjustments, in-process research and
development expenses, restructuring, asset impairments and other,
net, goodwill and intangible asset impairment charges, gains and
losses on debt prepayment, non-cash interest expense, actuarial
(gains) losses on pension plans and other pension benefits, third
party acquisition and divestiture-related costs, tax impact of
these items, and certain other non-recurring items, as necessary.
Management does not consider the effects of these items in
evaluating the core operational activities of onsemi. Management
uses these non-GAAP measures internally to make strategic
decisions, forecast future results, and evaluate onsemi’s current
performance. In addition, the Company believes that most analysts
covering onsemi use the non-GAAP measures to evaluate onsemi’s
performance. Given management’s and other relevant use of these
non-GAAP measures, onsemi believes these measures are important to
investors in understanding onsemi’s current and future operating
results as seen through the eyes of management. In addition,
management believes these non-GAAP measures are useful to investors
in enabling them to better assess changes in onsemi's core business
across different time periods. These non-GAAP measures are not
prepared in accordance with, and should not be considered
alternatives or necessarily superior to, GAAP financial data and
may be different from non-GAAP measures used by other companies.
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.
Non-GAAP Revenue
The use of non-GAAP revenue allows management to evaluate, among
other things, the revenue from the Company’s core businesses and
trends across different reporting periods on a consistent basis,
independent of special items. In addition, non-GAAP revenue is an
important component of management’s internal performance
measurement and incentive and reward process as it is used to
assess the current and historical financial results of the business
and for strategic decision making, preparing budgets, obtaining
targets and forecasting future results. Management presents this
non-GAAP financial measure to enable investors and analysts to
evaluate the Company's revenue generation performance relative to
the direct costs of operations of onsemi's core businesses.
Non-GAAP Gross Profit and Gross Margin
The use of non-GAAP gross profit and gross margin allows
management to evaluate, among other things, the gross margin and
gross profit of the Company’s core businesses and trends across
different reporting periods on a consistent basis, independent of
non-cash items including, generally speaking, amortization of
acquisition-related intangibles, expensing of appraised inventory
fair market value step-up, impact of business wind-down and
non-recurring facility costs. In addition, it is an important
component of management’s internal performance measurement and
incentive and reward process as it is used to assess the current
and historical financial results of the business and for strategic
decision making, preparing budgets, obtaining targets, and
forecasting future results. Management presents this non-GAAP
financial measure to enable investors and analysts to evaluate our
revenue generation performance relative to the direct costs of
revenue of onsemi’s core businesses.
Non-GAAP Operating Income and Operating Margin
The use of non-GAAP operating income and operating margin allows
management to evaluate, among other things, the operating margin
and operating income of the Company’s core businesses and trends
across different reporting periods on a consistent basis,
independent of non-cash items including, generally speaking,
expensing of appraised inventory fair market value step-up, impact
of business wind-down, non-recurring facility costs, amortization
and impairments of intangible assets, goodwill and intangible asset
impairment charges, third party acquisition and divestiture related
costs, restructuring charges and certain other special items as
necessary. In addition, it is an important component of
management’s internal performance measurement and incentive and
reward process as it is used to assess the current and historical
financial results of the business and for strategic decision
making, preparing budgets, obtaining targets, and forecasting
future results. Management presents this non-GAAP financial measure
to enable investors and analysts to evaluate the Company's revenue
generation performance relative to the direct costs of operations
of onsemi’s core businesses.
Non-GAAP Net Income Attributable to onsemi and Non-GAAP Diluted
Earnings Per Share
The use of non-GAAP net income attributable to onsemi and
non-GAAP diluted earnings per share allows management to evaluate
the operating results of onsemi’s core businesses and trends across
different reporting periods on a consistent basis, independent of
non-cash items including, generally, the amortization and
impairments of intangible assets, goodwill and intangible asset
impairment charges, expensing of appraised inventory fair market
value step-up, impact of business wind down, non-recurring facility
costs, restructuring, gains and losses on debt prepayment, non-cash
interest expense, actuarial (gains) losses on pension plans and
other pension benefits, third party acquisition and
divestiture-related costs, discrete tax items and other non-GAAP
tax adjustments and certain other special items, as necessary. In
addition, these items are important components of management’s
internal performance measurement and incentive and reward process,
as they are used to assess the current and historical financial
results of the business and for strategic decision making,
preparing budgets, setting targets, and forecasting future results.
Management presents these non-GAAP financial measures to enable
investors and analysts to understand the results of operations of
onsemi’s core businesses and, to the extent comparable, to compare
our results of operations on a more consistent basis against those
of other companies in our industry.
Free Cash Flow
The use of free cash flow allows management to evaluate, among
other things, the ability of the Company to make interest or
principal payments on its debt. Free cash flow is defined as the
difference between cash flow from operating activities and capital
expenditures disclosed under investing activities in the
consolidated statement of cash flows. Free cash flow is not an
alternative to cash flow from operating activities as a measure of
liquidity. It is an important component of management’s internal
performance measurement and incentive and reward process as it is
used to assess the current and historical financial results of the
business and for strategic decision making, preparing budgets,
obtaining targets, and forecasting future results. Management
presents this non-GAAP financial measure to enable investors and
analysts to evaluate our revenue generation performance relative to
the direct costs of operations of onsemi’s core businesses.
Non-GAAP Diluted Share Count
The use of non-GAAP diluted share count allows management to
evaluate, among other things, the potential dilution due to the
outstanding restricted stock units excluding the dilution from the
convertible notes that is covered by hedging activity up to a
certain threshold. In periods when the quarterly average stock
price per share exceeds $52.97 for the 0% Notes and $103.87 for the
0.50% Notes, the non-GAAP diluted share count includes the
anti-dilutive impact of the Company’s hedge transactions issued
concurrently with the 0% Notes and the 0.50% Notes, respectively.
At an average stock price per share between $52.97 and $74.34 for
the 0% Notes and $103.87 and $156.78 for the 0.50% Notes, the
hedging activity offsets the potentially dilutive effect of the 0%
Notes and the 0.50% Notes, respectively. In periods when the
quarterly average stock price per share exceeds $74.34 for the 0%
Notes and $156.78 for the 0.50% Notes, the dilutive impact of the
warrants issued concurrently with such notes are included in the
diluted shares outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240205274064/en/
Krystal Heaton Director, Head of Public Relations onsemi
(480) 242-6943 Krystal.Heaton@onsemi.com
Parag Agarwal Vice President - Investor Relations &
Corporate Development onsemi (602) 244-3437
investor@onsemi.com
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