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Freescale Semiconductor Announces Third Quarter 2012 Results

Stocks in this article: FSL

Non-GAAP Financial Measures

Included within this press release and the accompanying tables and notes are non-GAAP financial measures that supplement the company's consolidated financial information prepared under GAAP. The company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release. The company's management believes that these non-GAAP measures provide a more meaningful representation of the company’s ongoing financial performance than GAAP measures alone. In addition, the company uses Adjusted EBITDA to measure compliance with certain of its debt covenants. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP. You should consider them together with the consolidated financial information located in the tables attached to this press release.

About Freescale Semiconductor

Freescale Semiconductor is a global leader in embedded processing solutions, providing industry leading products that are advancing the automotive, consumer, industrial and networking markets. From microprocessors and microcontrollers to sensors, analog integrated circuits and connectivity - our technologies are the foundation for the innovations that make our world greener, safer, healthier and more connected. Some of our key applications and end-markets include automotive safety, hybrid and all-electric vehicles, next generation wireless infrastructure, smart energy management, portable medical devices, consumer appliances and smart mobile devices.

The company is based in Austin, Texas, and has design, research and development, manufacturing and sales operations around the world. http://www.freescale.com

Freescale and the Freescale logo are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © Freescale Semiconductor, Inc. 2012.

                 
Freescale Semiconductor, Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
 
 

Three months ended

(in millions, except per share amounts) Sept 28, June 29, Sept 30,
2012 2012 2011
 
Net sales $ 1,009 $ 1,029 $ 1,142
Cost of sales   585     589     661  
Gross margin 424 440 481
Selling, general and administrative 110 116 129
Research and development 187 188 200
Amortization expense for acquired intangible assets 3 4 62
Reorganization of business and other   (3 )   20     (20 )
Operating earnings 127 112 110
Loss on extinguishment or modification of long-term debt, net (3 ) - (55 )
Other expense, net   (134 )   (135 )   (129 )
Loss before income taxes (10 ) (23 ) (74 )
Income tax expense   14     11     14  
Net loss $ (24 ) $ (34 ) $ (88 )
 
Loss per common share:
Basic ($0.10 ) ($0.14 ) ($0.36 )
Diluted ($0.10 ) ($0.14 ) ($0.36 )
 
Weighted average common shares outstanding:
Basic 249 248 246
Diluted 251 250 248
 

           
Freescale Semiconductor, Ltd.
Reconciliation of Non-GAAP Measures
(Unaudited)
 

Three months ended

(in millions, except per share amounts) Sept 28, June 29, Sept 30,
2012 2012 2011
 
Adjusted gross margin $ 424 $ 440 $ 527
Incremental depreciation expense (a)   -     -     46  
Gross margin $ 424   $ 440   $ 481  
 
 
Adjusted operating earnings $ 127 $ 136 $ 200
Incremental depreciation expense (a) - - 48
Amortization expense for acquired intangible assets (a) 3 4 62
Reorganization of business and other (f)   (3 )   20     (20 )
Operating earnings $ 127   $ 112   $ 110  
 
 
Adjusted net earnings $ 10 $ 17 $ 72
Purchase price accounting impact (a) 3 4 110
Non-cash share-based compensation expense (b) 12 10 6
Fair value adjustment on interest rate and commodity derivatives (c) 7 8 (3 )
Deferred and non-current tax impact (d) 12 9 12
Loss on extinguishment or modification of long-term debt, net (e) 3 - 55
Reorganization of business and other (f)   (3 )   20     (20 )
Net loss $ (24 ) $ (34 ) $ (88 )
 
Adjusted net earnings per common share:
Basic $ 0.04 $ 0.07 $ 0.29
Diluted $ 0.04 $ 0.07 $ 0.29
 
Weighted average common shares outstanding:
Basic 249 248 246
Diluted 251 250 248
 

 
Freescale Semiconductor, Ltd.
Product Group Net Sales Information
(Unaudited)
                   
 
 
(in millions)

Three months ended

Sept 28, June 29, Sept 30,
2012 2012 2011
 
 
Automotive, Industrial & Multi-Market Solutions (1) $ 555 $ 568 $ 589
Networking & Multimedia Solutions (2) 368 335 404
Cellular (3) 27 50 97
Other (4)

 

59

  76   52
$ 1,009 $ 1,029 $ 1,142
 

(1) Automotive, Industrial & Multi-Market Solutions include our microcontroller portfolio for automotive, consumer and industrial applications, as well as Analog & Sensors products.

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