Key Announcement Highlights:
- ON Semiconductor expects to return
approximately 80 percent of free cash flow less debt repayment to
shareholders
- ON Semiconductor Board of Directors has
authorized approximately $1 billion for stock repurchases over a
four year period
ON Semiconductor (Nasdaq: ONNN), driving energy efficient
innovations, today announced that its Board of Directors has
approved a capital allocation policy under which the company
intends to return approximately 80 percent of free cash flow less
repayments of long-term debt to shareholders, subject to a variety
of factors, including the company’s strategic plans, market and
economic conditions, and Board of Directors’ discretion. ON
Semiconductor defines free cash flow as net cash provided by
operating activities less purchases of property, plant and
equipment of the company and its consolidated subsidiaries.
The Board of Directors also approved a new share repurchase
program under the new policy. Under the new share repurchase
program, the company intends to repurchase approximately $1 billion
worth of its common shares over a four year period, subject to the
same factors and considerations described above. The new stock
repurchase program is effective today and the $300 million stock
repurchase program announced in August of 2012 has been
terminated.
“The new capital allocation policy demonstrates ON
Semiconductor’s strong commitment towards efficient use of capital
and maximizing shareholder value,” said Keith Jackson, president
and CEO of ON Semiconductor. “We believe that at current levels,
our stock offers compelling value, and therefore the repurchase
program should deliver substantial value to our shareholders. The
long term outlook for our business remains strong, driven by a
robust design win pipeline, and we are confident in our ability to
generate approximately $300 million to $400 million of annual free
cash flow on a sustained basis in the near to mid-term.”
Based on the closing price of the company’s common stock as of
November 28 2014, the $1 billion repurchase program represents the
potential repurchase of approximately 111 million shares or 25
percent of the weighted average diluted common shares outstanding
at the end of the third quarter of 2014.
About ON Semiconductor
ON Semiconductor (Nasdaq: ONNN) is driving
energy efficient innovations, empowering customers to reduce global
energy use. The company offers a comprehensive portfolio of
energy-efficient power and signal management, logic, discrete and
custom solutions to help design engineers solve their unique design
challenges in automotive, communications, computing, consumer,
industrial, LED lighting, medical, military/aerospace and power
supply applications. ON Semiconductor operates a responsive,
reliable, world-class supply chain and quality 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 Web site in this news release, such
information on the Web site is not to be incorporated herein.
Cautions regarding Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
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. These forward-looking statements
are often characterized by the use of words such as “believes,”
“estimates,” “expects,” “projects,” “may,” “will,” “intends,”
“plans,” “should” or “anticipates,” or by discussions of strategy,
plans or intentions. All forward-looking statements in this
document are made based on information available to us as of the
date of this release, 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 revenues and operating performance,
poor economic conditions and markets (including current financial
conditions), 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,
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, competitor actions including the adverse
impact of competitor product announcements, pricing and gross
profit pressures, loss of key customers, 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 such as debt
prepayment, stock repurchases or acquisitions rather than to retain
such cash for future needs, risks associated with acquisitions and
dispositions (including from integrating and consolidating and
timely filing financial information with the Securities and
Exchange Commission for acquired businesses and difficulties
encountered in accurately predicting the future financial
performance of acquired businesses), 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 foreign employment and
labor matters associated with unions and collective bargaining
arrangements as well as man-made and/or natural disasters affecting
our operations and finances/financials, the threat or occurrence of
international armed conflict and terrorist activities both in the
United States and internationally, 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.
Information concerning additional factors that could cause results
to differ materially from those projected in the forward-looking
statements is contained in ON Semiconductor’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and other of our filings with the Securities and Exchange
Commission. 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, our intentions with respect to our
stock repurchase program and capital allocation policy may not be
realized, and investors could lose all or part of their
investment.
Readers are cautioned not to place undue reliance on
forward-looking statements. These forward-looking statements should
not be relied upon as representing our views as of any subsequent
date and we do not undertake any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made.
Additional Information about the New Stock Repurchase Plan
and Where to Find It
For additional information, visit ON
Semiconductor’s corporate website, www.onsemi.com, or for official
filings visit the SEC website, www.sec.gov.
ON SemiconductorAnne SpitzaCorporate Communications /
Media Relations602-326-0071Anne.Spitza@onsemi.comorParag
AgarwalSenior Director - Investor Relations and Corporate
Development602-244-3437Investor@onsemi.com
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