NXP Semiconductors N.V. (NASDAQ: NXPI) today reported financial
results for the first quarter of 2019, ended March 31, 2019.
“NXP delivered revenue of $2.1 billion during the first quarter,
just above our guidance. Due to a richer mix of sales and good
expense control, we successfully delivered improved profitability
toward the higher end of our guidance range. Additionally, during
the quarter we returned $788 million to our shareholders consistent
with our long-term capital return policy. Looking forward, our
second quarter guidance reflects the successful design win momentum
and traction we have achieved with our customers. We continue to
believe the demand environment in the second half of 2019 should
improve versus the first half, but the macro-economic environment
is still uncertain, especially in China.” said Richard Clemmer, NXP
Chief Executive Officer.
First-quarter Key Highlights
- Revenue was $2.1 billion, down 8 percent year-on-year;
- GAAP gross margin was 51.2 percent, and GAAP operating margin
was 2.6 percent;
- Non-GAAP gross margin was 52.7 percent, and non-GAAP operating
margin was 26.7 percent;
- Cash flow from operations was $296 million, with net capex
investments of $144 million, resulting in non-GAAP free cash flow
of $152 million;
Summary of Reported First Quarter 2019 ($ millions,
unaudited) (1)
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Q1 2019 |
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Q4 2018 |
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Q1 2018 |
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Q - Q |
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Y - Y |
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Total
Revenue |
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$ |
2,094 |
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$ |
2,403 |
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$ |
2,269 |
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-13 |
% |
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-8 |
% |
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GAAP Gross Profit |
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$ |
1,072 |
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$ |
1,243 |
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$ |
1,172 |
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-14 |
% |
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-9 |
% |
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Gross
Profit Adjustments (i) |
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$ |
(32 |
) |
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$ |
(32 |
) |
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$ |
(28 |
) |
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Non-GAAP Gross Profit |
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$ |
1,104 |
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$ |
1,275 |
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$ |
1,200 |
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-13 |
% |
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-8 |
% |
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GAAP
Gross Margin |
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51.2 |
% |
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51.7 |
% |
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51.7 |
% |
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Non-GAAP
Gross Margin |
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52.7 |
% |
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53.1 |
% |
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52.9 |
% |
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GAAP Operating Income / (Loss) |
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$ |
54 |
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$ |
224 |
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$ |
138 |
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-76 |
% |
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-61 |
% |
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Operating
Income Adjustments (i) |
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(505 |
) |
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(507 |
) |
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(479 |
) |
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Non-GAAP Operating Income |
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$ |
559 |
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$ |
731 |
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$ |
617 |
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-24 |
% |
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-9 |
% |
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GAAP
Operating Margin |
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2.6 |
% |
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9.3 |
% |
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6.1 |
% |
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Non-GAAP
Operating Margin |
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26.7 |
% |
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30.4 |
% |
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27.2 |
% |
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Additional Information |
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Automotive |
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$ |
1,036 |
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$ |
1,112 |
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$ |
1,131 |
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-7 |
% |
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-8 |
% |
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Industrial & IoT |
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$ |
368 |
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$ |
435 |
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$ |
426 |
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-15 |
% |
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-14 |
% |
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Mobile |
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$ |
241 |
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$ |
344 |
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$ |
266 |
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-30 |
% |
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-9 |
% |
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Comm.
Infra. & Other |
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$ |
449 |
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$ |
483 |
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$ |
407 |
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-7 |
% |
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10 |
% |
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Manufacturing Services ("MSA") |
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$ |
- |
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$ |
29 |
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$ |
39 |
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NM |
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NM |
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DIO |
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113 |
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102 |
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106 |
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11 |
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7 |
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DPO |
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74 |
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80 |
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83 |
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(6) |
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(9) |
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DSO |
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35 |
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30 |
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32 |
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5 |
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3 |
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Cash
Conversion Cycle |
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74 |
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52 |
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55 |
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22 |
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19 |
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Channel
Inventory (months) |
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2.4 |
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2.4 |
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2.4 |
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- |
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- |
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Financial
Leverage (ii) |
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1.7x |
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1.4x |
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0.8x |
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0.3x |
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0.9x |
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- Additional Information for the First
Quarter 2019:
- For an explanation of GAAP to non-GAAP adjustments, please see
“Non-GAAP Financial Measures” on page 2 of this release.
- Financial leverage, is defined as net debt divided by trailing
twelve months adjusted EBITDA.
- During the first quarter of 2019 NXP repurchased 8.5 million
shares for a total cost of $715 million.
- Weighted average number of diluted shares for the three month
period ended March 31, 2019 was 287.2 million and as the company
reported a net loss, it excludes the incremental impact of dilutive
potential common shares of 1.6 million shares.
- Cash paid for income taxes related to on-going operations was
$17 million. Items not related to on-going operations resulted in
additional cash payments of $192 million, which was mainly due to
the termination fee associated with the terminated Qualcomm
transaction, offset by a benefit associated with the divestment of
the Standard Products business.
Guidance for the Second Quarter 2019: ($ millions)
(1)
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Guidance
Range |
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GAAP |
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Reconciliation |
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non-GAAP |
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Low |
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Mid |
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High |
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Low |
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Mid |
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High |
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Total Revenue |
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$ |
2,150 |
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$ |
2,200 |
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$ |
2,250 |
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$ |
- |
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$ |
2,150 |
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$ |
2,200 |
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$ |
2,250 |
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Q-Q |
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3 |
% |
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5 |
% |
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7 |
% |
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3 |
% |
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5 |
% |
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7 |
% |
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Y-Y |
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-6 |
% |
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-4 |
% |
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-2 |
% |
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-6 |
% |
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-4 |
% |
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-2 |
% |
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|
Gross Profit |
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$ |
1,107 |
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$ |
1,145 |
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$ |
1,183 |
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$ |
(27 |
) |
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$ |
1,134 |
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$ |
1,172 |
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$ |
1,210 |
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Gross
Margin |
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51.5 |
% |
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52.0 |
% |
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52.6 |
% |
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52.7 |
% |
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53.3 |
% |
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|
53.8 |
% |
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|
Operating Income (loss) |
|
$ |
95 |
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$ |
123 |
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$ |
150 |
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$ |
(494 |
) |
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$ |
589 |
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$ |
617 |
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$ |
644 |
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|
Operating
Margin |
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|
4.4 |
% |
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|
5.6 |
% |
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6.7 |
% |
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|
27.4 |
% |
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|
28.0 |
% |
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|
28.6 |
% |
|
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Financial
income (expense) |
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$ |
(78 |
) |
|
$ |
(78 |
) |
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$ |
(78 |
) |
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$ |
(14 |
) |
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$ |
(64 |
) |
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$ |
(64 |
) |
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$ |
(64 |
) |
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Note (1) Additional Information:
- GAAP Gross Profit is expected to include Purchase Price
Accounting (“PPA”) effects, ($17 million); Stock Based
Compensation, ($10 million);
- GAAP Operating Income (loss) is expected to include PPA
effects, ($378 million); Stock Based Compensation, ($86 million);
Merger related costs ($10 million); Restructuring and Other
Incidentals, ($20 million);
- GAAP Financial Income (expense) is expected to include Other
financial expense ($14 million);
- Net cash paid for income taxes related to on-going operations
is expected to be approximately ($38 million);
- Non-controlling interest is expected to be approximately ($6
million);
- Weighted average diluted share count is expected to be
approximately 287 million.
NXP has based the guidance included in this release on judgments
and estimates that management believes are reasonable given its
assessment of historical trends and other information reasonably
available as of the date of this release. Please note, the guidance
included in this release consists of predictions only, and is
subject to a wide range of known and unknown risks and
uncertainties, many of which are beyond NXP's control. The
guidance included in this release should not be regarded as
representations by NXP that the estimated results will be
achieved. Actual results may vary materially from the
guidance we provide today. In relation to the use of non-GAAP
financial information see the note regarding "Non-GAAP Financial
Measures" below. For the factors, risks, and uncertainties to
which judgments, estimates and forward-looking statements generally
are subject see the note regarding "Forward-looking
Statements." We undertake no obligation to publicly update or
revise any forward-looking statements, including the guidance set
forth herein, to reflect future events or circumstances.
Non-GAAP Financial Measures
In managing NXP's business on a consolidated basis, management
develops an annual operating plan, which is approved by our Board
of Directors, using non-GAAP financial measures. In measuring
performance against this plan, management considers the actual or
potential impacts on these non-GAAP financial measures from actions
taken to reduce costs with the goal of increasing our gross margin
and operating margin and when assessing appropriate levels of
research and development efforts. In addition, management relies
upon these non-GAAP financial measures when making decisions about
product spending, administrative budgets, and other operating
expenses. We believe that these non-GAAP financial measures, when
coupled with the GAAP results and the reconciliations to
corresponding GAAP financial measures, provide a more complete
understanding of the Company’s results of operations and the
factors and trends affecting NXP’s business. We believe that they
enable investors to perform additional comparisons of our operating
results, to assess our liquidity and capital position and to
analyze financial performance excluding the effect of expenses
unrelated to operations, certain non-cash expenses and share-based
compensation expense, which may obscure trends in NXP's underlying
performance. This information also enables investors to
compare financial results between periods where certain items may
vary independent of business performance, and allow for greater
transparency with respect to key metrics used by
management.
These non-GAAP financial measures are provided in addition to,
and not as a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. The presentation of
these and other similar items in NXP’s non-GAAP financial results
should not be interpreted as implying that these items are
non-recurring, infrequent, or unusual. Reconciliations of
these non-GAAP measures to the most comparable measures calculated
in accordance with GAAP are provided in the financial statements
portion of this release in a schedule entitled “Financial
Reconciliation of GAAP to non-GAAP Results (unaudited).” Please
refer to the NXP Historic Financial Model file found on the
Financial Information page of the Investor Relations section of our
website at https://investors.nxp.com for additional information
related to our rationale for using these non-GAAP financial
measures, as well as the impact of these measures on the
presentation of NXP's operations.
In addition to providing financial information on a basis
consistent with U.S. generally accepted accounting principles
(“GAAP”), NXP also provides the following selected financial
measures on a non-GAAP basis: (i) Gross profit,
(ii) Gross margin, (iii) Research and development,
(iv) Selling, general and administrative,
(v) Amortization of acquisition-related intangible assets,
(vi) Other income, (vii) Operating income (loss),
(viii) Operating margin, (ix) Financial Income (expense),
(x) adjusted net income, adjusted EBITDA and trailing 12 month
adjusted EBITDA, and (xi) free cash flow and free cash flow as
a percent of Revenue. The non-GAAP information excludes the
amortization of acquisition related intangible assets, the purchase
accounting effect on inventory and property, plant and equipment,
merger related costs (including integration costs), certain items
related to divestitures, share-based compensation expense,
restructuring and asset impairment charges, non-cash interest
expense on convertible notes, extinguishment of debt, and foreign
exchange gains and losses.
Conference Call and Webcast Information
NXP will host a conference call on April 30, 2019 at 8:00 a.m.
U.S. Eastern Time (2:00 p.m. Central European Time) to discuss its
first quarter 2019 results and provide an outlook for the second
quarter of 2019.
Interested parties may join the conference call by dialing 1 –
888 – 603 – 7644 (within the U.S.) or 1 – 484 – 747 - 6631 (outside
of the U.S.). The participant pass-code is 4776928. To listen to a
webcast of the event, please visit the Investor Relations section
of the NXP website at https://investors.nxp.com. The webcast will
be recorded and available for replay shortly after the call
concludes.
About NXP Semiconductors
NXP Semiconductors N.V. (NASDAQ: NXPI) enables
secure connections and infrastructure for a smarter world,
advancing solutions that make lives easier, better, and safer. As
the world leader in secure connectivity solutions for embedded
applications, NXP is driving innovation in the secure connected
vehicle, end-to-end security & privacy, and smart connected
solutions markets. Built on more than 60 years of combined
experience and expertise, the company has approximately 30,000
employees in more than 30 countries and posted revenue of $9.41
billion in 2018. Find out more at www.nxp.com.
Forward-looking Statements
This document includes forward-looking statements which include
statements regarding NXP’s business strategy, financial condition,
results of operations, and market data, as well as any other
statements which are not historical facts. By their nature,
forward-looking statements are subject to numerous factors, risks
and uncertainties that could cause actual outcomes and results to
be materially different from those projected. These factors,
risks and uncertainties include the following: market demand and
semiconductor industry conditions; the ability to successfully
introduce new technologies and products; the end-market demand for
the goods into which NXP’s products are incorporated; the ability
to generate sufficient cash, raise sufficient capital or refinance
corporate debt at or before maturity; the ability to meet the
combination of corporate debt service, research and development and
capital investment requirements; the ability to accurately estimate
demand and match manufacturing production capacity accordingly or
obtain supplies from third-party producers; the access to
production capacity from third-party outsourcing partners; any
events that might affect third-party business partners or NXP’s
relationship with them; the ability to secure adequate and
timely supply of equipment and materials from suppliers; the
ability to avoid operational problems and product defects and, if
such issues were to arise, to correct them quickly; the ability to
form strategic partnerships and joint ventures and to successfully
cooperate with alliance partners; the ability to win competitive
bid selection processes to develop products for use in customers’
equipment and products; the ability to achieve targeted
efficiencies and cost savings; the ability to successfully
hire and retain key management and senior product architects; and,
the ability to maintain good relationships with our
suppliers. In addition, this document contains information
concerning the semiconductor industry and NXP’s business generally,
which is forward-looking in nature and is based on a variety of
assumptions regarding the ways in which the semiconductor industry,
NXP’s markets and product areas may develop. NXP has based
these assumptions on information currently available, if any one or
more of these assumptions turn out to be incorrect, actual results
may differ from those predicted. While NXP does not know what
impact any such differences may have on its business, if there are
such differences, its future results of operations and its
financial condition could be materially adversely affected.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak to results only as of the
date the statements were made. Except for any ongoing
obligation to disclose material information as required by the
United States federal securities laws, NXP does not have any
intention or obligation to publicly update or revise any
forward-looking statements after we distribute this document,
whether to reflect any future events or circumstances or
otherwise. For a discussion of potential risks and
uncertainties, please refer to the risk factors listed in our SEC
filings. Copies of our SEC filings are available on our Investor
Relations website, https://investors.nxp.com or from the SEC
website, www.sec.gov
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For further information, please
contact: |
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Investors: |
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Media: |
Jeff Palmer |
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Jacey Zuniga |
jeff.palmer@nxp.com |
|
jacey.zuniga@nxp.com |
+1 408 518 5411 |
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+1 512 895 7398 |
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NXP
Semiconductors |
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Table 1: Condensed consolidated statement of operations
(unaudited) |
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($ in millions except
share data) |
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Three Months Ended |
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March 31, 2019 |
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December 31, 2018 |
|
April 1, 2018 |
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Revenue |
|
$ |
2,094 |
|
|
$ |
2,403 |
|
|
$ |
2,269 |
|
|
|
Cost of revenue |
|
|
(1,022 |
) |
|
|
(1,160 |
) |
|
|
(1,097 |
) |
|
|
Gross
profit |
|
|
1,072 |
|
|
|
1,243 |
|
|
|
1,172 |
|
|
|
|
|
|
|
|
|
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|
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Research and
development |
|
|
(415 |
) |
|
|
(403 |
) |
|
|
(426 |
) |
|
|
Selling, general and
administrative |
|
|
(248 |
) |
|
|
(251 |
) |
|
|
(248 |
) |
|
|
Amortization of
acquisition-related intangible assets |
|
|
(357 |
) |
|
|
(364 |
) |
|
|
(360 |
) |
|
|
Total operating
expenses |
|
|
(1,020 |
) |
|
|
(1,018 |
) |
|
|
(1,034 |
) |
|
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|
|
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|
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Other income
(expense) |
|
|
2 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
Operating
income (loss) |
|
|
54 |
|
|
|
224 |
|
|
|
138 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
(expense): |
|
|
|
|
|
|
|
|
Extinguishment of
debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Other financial income
(expense) |
|
|
(83 |
) |
|
|
(77 |
) |
|
|
(68 |
) |
|
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Income (loss)
before taxes |
|
|
(29 |
) |
|
|
147 |
|
|
|
70 |
|
|
|
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Benefit (provision) for
income taxes |
|
|
9 |
|
|
|
141 |
|
|
|
(2 |
) |
|
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Results relating to
equity-accounted investees |
|
|
4 |
|
|
|
1 |
|
|
|
2 |
|
|
|
Net income (loss) |
|
|
(16 |
) |
|
|
289 |
|
|
|
70 |
|
|
|
Less: Net income (loss)
attributable to non-controlling interests |
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|
5 |
|
|
|
13 |
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|
12 |
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|
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Net income
(loss) attributable to stockholders |
|
|
(21 |
) |
|
|
276 |
|
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|
58 |
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Earnings per
share data: |
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Net income
(loss) per common share attributable to stockholders in $: |
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Basic |
|
$ |
(0.07 |
) |
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$ |
0.94 |
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$ |
0.17 |
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Diluted |
|
$ |
(0.07 |
) |
|
$ |
0.94 |
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$ |
0.17 |
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Weighted
average number of shares of common stock outstanding during the
period (in thousands): |
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|
|
Basic |
|
|
287,227 |
|
|
|
293,170 |
|
|
|
343,661 |
|
|
|
Diluted |
|
|
287,227 |
|
|
|
294,947 |
|
|
|
346,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NXP
Semiconductors |
|
|
|
|
|
|
|
|
Table 2:
Condensed consolidated balance sheet (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
As of |
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
2,192 |
|
$ |
2,789 |
|
$ |
3,983 |
|
|
Accounts
receivable, net |
|
|
800 |
|
|
792 |
|
|
791 |
|
|
Inventories, net |
|
|
1,241 |
|
|
1,279 |
|
|
1,251 |
|
|
Other
current assets |
|
|
387 |
|
|
365 |
|
|
536 |
|
|
Total current
assets |
|
|
4,620 |
|
|
5,225 |
|
|
6,561 |
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
|
|
|
|
Other
non-current assets |
|
|
699 |
|
|
545 |
|
|
888 |
|
|
Property,
plant and equipment, net |
|
|
2,407 |
|
|
2,436 |
|
|
2,307 |
|
|
Identified intangible assets, net |
|
|
4,094 |
|
|
4,467 |
|
|
5,494 |
|
|
Goodwill |
|
|
8,852 |
|
|
8,857 |
|
|
8,877 |
|
|
Total
non-current assets |
|
|
16,052 |
|
|
16,305 |
|
|
17,566 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
|
20,672 |
|
|
21,530 |
|
|
24,127 |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
|
815 |
|
|
999 |
|
|
984 |
|
|
Restructuring liabilities-current |
|
|
66 |
|
|
60 |
|
|
67 |
|
|
Other
current liabilities |
|
|
1,264 |
|
|
1,219 |
|
|
865 |
|
|
Short-term debt |
|
|
1,117 |
|
|
1,107 |
|
|
1,249 |
|
|
Total current
liabilities |
|
|
3,262 |
|
|
3,385 |
|
|
3,165 |
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
|
|
|
|
Long-term
debt |
|
|
6,223 |
|
|
6,247 |
|
|
5,329 |
|
|
Restructuring liabilities |
|
|
4 |
|
|
5 |
|
|
15 |
|
|
Deferred
tax liabilities |
|
|
390 |
|
|
450 |
|
|
650 |
|
|
Other
non-current liabilities |
|
|
862 |
|
|
753 |
|
|
1,078 |
|
|
Total
non-current liabilities |
|
|
7,479 |
|
|
7,455 |
|
|
7,072 |
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests |
|
|
190 |
|
|
185 |
|
|
201 |
|
|
Stockholders’
equity |
|
|
9,741 |
|
|
10,505 |
|
|
13,689 |
|
|
Total
equity |
|
|
9,931 |
|
|
10,690 |
|
|
13,890 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and equity |
|
|
20,672 |
|
|
21,530 |
|
|
24,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NXP
Semiconductors |
|
|
|
|
|
|
|
|
Table 3: Condensed consolidated statement of cash flows
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
Three Months Ended |
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
operating activities |
|
|
|
|
|
|
|
|
Net income
(loss) |
|
$ |
(16 |
) |
|
$ |
289 |
|
|
$ |
70 |
|
|
|
Adjustments to
reconcile net income (loss): |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
502 |
|
|
|
503 |
|
|
|
491 |
|
|
|
Stock-based compensation |
|
|
86 |
|
|
|
93 |
|
|
|
69 |
|
|
|
Amortization of discount on debt |
|
|
11 |
|
|
|
11 |
|
|
|
10 |
|
|
|
Amortization of debt issuance costs |
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
|
|
Results
relating to equity accounted investees |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
Changes
in deferred taxes |
|
|
(63 |
) |
|
|
(52 |
) |
|
|
(42 |
) |
|
|
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
(Increase) decrease in receivables and other current assets |
|
|
(42 |
) |
|
|
51 |
|
|
|
81 |
|
|
|
(Increase) decrease in inventories |
|
|
38 |
|
|
|
5 |
|
|
|
(36 |
) |
|
|
Increase
(decrease) in accounts payable and other liabilities |
|
|
(250 |
) |
|
|
(188 |
) |
|
|
(26 |
) |
|
|
Decrease
(Increase) in other non-current assets |
|
|
20 |
|
|
|
4 |
|
|
|
- |
|
|
|
Exchange
differences |
|
|
6 |
|
|
|
13 |
|
|
|
5 |
|
|
|
Other items |
|
|
5 |
|
|
|
- |
|
|
|
(3 |
) |
|
|
Net cash
provided by (used for) operating activities |
|
|
296 |
|
|
|
731 |
|
|
|
620 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Purchase
of identified intangible assets |
|
|
(28 |
) |
|
|
(4 |
) |
|
|
(18 |
) |
|
|
Capital
expenditures on property, plant and equipment |
|
|
(144 |
) |
|
|
(170 |
) |
|
|
(156 |
) |
|
|
Proceeds
from sale of interests in businesses, net of cash divested |
|
|
37 |
|
|
|
- |
|
|
|
- |
|
|
|
Purchase
of available-for-sale securities |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
- |
|
|
|
Proceeds
from the sale of securities |
|
|
1 |
|
|
|
2 |
|
|
|
- |
|
|
|
Other |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
Net cash
provided by (used for) investing activities |
|
|
(136 |
) |
|
|
(174 |
) |
|
|
(174 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Repayment
of Bridge Loan |
|
|
- |
|
|
|
(1,000 |
) |
|
|
- |
|
|
|
Proceeds
from the issuance of long-term debt |
|
|
- |
|
|
|
1,997 |
|
|
|
- |
|
|
|
Cash paid
for debt issuance costs |
|
|
- |
|
|
|
(12 |
) |
|
|
- |
|
|
|
Cash paid
for terminated acquisition adjustment event |
|
|
- |
|
|
|
(60 |
) |
|
|
- |
|
|
|
Dividends
paid to common stockholders |
|
|
(73 |
) |
|
|
(74 |
) |
|
|
- |
|
|
|
Proceeds from issuance of common stock through stock plans |
|
32 |
|
|
|
3 |
|
|
|
20 |
|
|
|
Purchase
of treasury shares |
|
|
(715 |
) |
|
|
(424 |
) |
|
|
(30 |
) |
|
|
Cash paid
on behalf of shareholders for tax on repurchased shares |
|
|
- |
|
|
|
(142 |
) |
|
|
- |
|
|
|
Net cash
provided by (used for) financing activities |
|
|
(756 |
) |
|
|
288 |
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
Effect
of changes in exchange rates on cash positions |
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
Increase
(decrease) in cash and cash equivalents |
|
|
(597 |
) |
|
|
845 |
|
|
|
436 |
|
|
|
Cash and
cash equivalents at beginning of period |
|
|
2,789 |
|
|
|
1,944 |
|
|
|
3,547 |
|
|
|
Cash and cash equivalents at end of period |
|
|
2,192 |
|
|
|
2,789 |
|
|
|
3,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash paid
during the period for: |
|
|
|
|
|
|
|
|
Interest |
|
|
25 |
|
|
|
74 |
|
|
|
21 |
|
|
|
Income taxes |
|
|
209 |
|
|
|
61 |
|
|
|
44 |
|
|
|
Non-cash
adjustment related to the adoption of ASC 606: |
|
|
|
|
|
|
|
|
Receivables and other
current assets |
|
|
- |
|
|
|
- |
|
|
|
(36 |
) |
|
|
Inventories |
|
|
- |
|
|
|
- |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NXP
Semiconductors |
|
|
|
|
|
|
|
|
Table 4: Financial Reconciliation of GAAP to non-GAAP
Results (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions except
share data) |
|
Three Months Ended |
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
2,094 |
|
|
$ |
2,403 |
|
|
$ |
2,269 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
profit |
|
$ |
1,072 |
|
|
$ |
1,243 |
|
|
$ |
1,172 |
|
|
|
PPA
effects |
|
|
(17 |
) |
|
|
(19 |
) |
|
|
(19 |
) |
|
|
Restructuring |
|
|
(4 |
) |
|
|
- |
|
|
|
- |
|
|
|
Stock
Based Compensation |
|
|
(10 |
) |
|
|
(12 |
) |
|
|
(9 |
) |
|
|
Merger-related costs |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
- |
|
|
|
Non-GAAP Gross
profit |
|
$ |
1,104 |
|
|
$ |
1,275 |
|
|
$ |
1,200 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Gross
margin |
|
|
51.2 |
% |
|
|
51.7 |
% |
|
|
51.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
margin |
|
|
52.7 |
% |
|
|
53.1 |
% |
|
|
52.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
GAAP
Research and development |
|
$ |
(415 |
) |
|
$ |
(403 |
) |
|
$ |
(426 |
) |
|
|
Restructuring |
|
|
(11 |
) |
|
|
- |
|
|
|
- |
|
|
|
Stock
based compensation |
|
|
(35 |
) |
|
|
(36 |
) |
|
|
(31 |
) |
|
|
Merger-related costs |
|
|
(3 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
|
|
Non-GAAP
Research and development |
|
$ |
(366 |
) |
|
$ |
(364 |
) |
|
$ |
(394 |
) |
|
|
|
|
|
|
|
|
|
|
|
GAAP
Selling, general and administrative |
|
$ |
(248 |
) |
|
$ |
(251 |
) |
|
$ |
(248 |
) |
|
|
PPA
effects |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
Restructuring |
|
|
(10 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
Stock
based compensation |
|
|
(41 |
) |
|
|
(45 |
) |
|
|
(29 |
) |
|
|
Merger-related costs |
|
|
(9 |
) |
|
|
(11 |
) |
|
|
(25 |
) |
|
|
Other
incidentals |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
- |
|
|
|
Non-GAAP
Selling, general and administrative |
|
$ |
(181 |
) |
|
$ |
(179 |
) |
|
$ |
(190 |
) |
|
|
|
|
|
|
|
|
|
|
|
GAAP
amortization of acquisition-related intangible assets |
|
$ |
(357 |
) |
|
$ |
(364 |
) |
|
$ |
(360 |
) |
|
|
PPA
effects |
|
|
(357 |
) |
|
|
(364 |
) |
|
|
(360 |
) |
|
|
Non-GAAP amortization of acquisition-related intangible
assets |
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Other income (expense) |
|
$ |
2 |
|
|
$ |
(1 |
) |
|
$ |
- |
|
|
|
Other
incidentals |
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
|
Non-GAAP
Other income (expense) |
|
$ |
2 |
|
|
$ |
(1 |
) |
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
income (loss) |
|
$ |
54 |
|
|
$ |
224 |
|
|
$ |
138 |
|
|
|
PPA
effects |
|
|
(375 |
) |
|
|
(385 |
) |
|
|
(382 |
) |
|
|
Restructuring |
|
|
(25 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
Stock
based compensation |
|
|
(86 |
) |
|
|
(93 |
) |
|
|
(69 |
) |
|
|
Merger-related costs |
|
|
(13 |
) |
|
|
(15 |
) |
|
|
(26 |
) |
|
|
Other
incidentals |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
(1 |
) |
|
|
Non-GAAP
Operating income (loss) |
|
$ |
559 |
|
|
$ |
731 |
|
|
$ |
617 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating
margin |
|
|
2.6 |
% |
|
|
9.3 |
% |
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Operating margin |
|
|
26.7 |
% |
|
|
30.4 |
% |
|
|
27.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
GAAP Financial
income (expense) |
|
$ |
(83 |
) |
|
$ |
(77 |
) |
|
$ |
(68 |
) |
|
|
Non-cash
interest expense on convertible notes |
|
|
(11 |
) |
|
|
(11 |
) |
|
|
(11 |
) |
|
|
Foreign
exchange gain (loss) |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
(3 |
) |
|
|
Other
financial expense |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
Non-GAAP
Financial income (expense) |
|
$ |
(61 |
) |
|
$ |
(60 |
) |
|
$ |
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NXP
Semiconductors |
|
|
|
|
|
|
|
|
|
Table 5:
Adjusted EBITDA and Free Cash Flow (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
Three Months Ended |
|
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(loss) |
|
$ |
(16 |
) |
|
$ |
289 |
|
|
$ |
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling
items to adjusted net income |
|
|
|
|
|
|
|
|
|
Financial
(income) expense |
|
|
83 |
|
|
|
77 |
|
|
|
68 |
|
|
|
|
(Benefit)
provision for income taxes |
|
|
(9 |
) |
|
|
(141 |
) |
|
|
2 |
|
|
|
|
Depreciation |
|
|
124 |
|
|
|
124 |
|
|
|
116 |
|
|
|
|
Amortization |
|
|
378 |
|
|
|
379 |
|
|
|
375 |
|
|
|
|
Adjusted net
income |
|
$ |
560 |
|
|
$ |
728 |
|
|
$ |
631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciling items to adjusted EBITDA |
|
|
|
|
|
|
|
|
|
Results
of equity-accounted investees |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
|
Restructuring |
|
|
25 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
Stock
based compensation |
|
|
86 |
|
|
|
93 |
|
|
|
69 |
|
|
|
|
Merger-related costs |
|
|
13 |
|
|
|
15 |
|
|
|
26 |
|
|
|
|
Other
incidental items |
|
|
6 |
|
|
|
13 |
|
|
|
1 |
|
|
|
|
Adjusted
EBITDA |
|
$ |
686 |
|
|
$ |
849 |
|
|
$ |
726 |
|
|
|
|
Trailing twelve month adjusted EBITDA |
|
$ |
3,111 |
|
|
$ |
3,151 |
|
|
$ |
3,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
Three Months Ended |
|
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
April 1, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used for) operating
activities |
|
$ |
296 |
|
|
$ |
731 |
|
|
$ |
620 |
|
|
|
|
Net capital
expenditures on property, plant and equipment |
|
|
(144 |
) |
|
|
(170 |
) |
|
|
(156 |
) |
|
|
|
Non-GAAP free cash flow |
|
$ |
152 |
|
|
$ |
561 |
|
|
$ |
464 |
|
|
|
|
Non-GAAP free cash flow as a percent of
Revenue |
|
|
7 |
% |
|
|
23 |
% |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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