NXP Semiconductors Reports Third Quarter 2016 Results

EINDHOVEN, The Netherlands, Oct. 26, 2016 (GLOBE NEWSWIRE) -- NXP Semiconductors N.V. (NASDAQ:NXPI) today reported financial results for the third quarter 2016, ended October 2, 2016, and provided guidance for the fourth quarter of 2016. 

“NXP delivered very good results for the third quarter of 2016, with revenue at $2.47 billion, an increase of 62 percent year on year, an increase of four percent versus the prior quarter and essentially in-line with the mid-point of our guidance.  HPMS segment revenue was $2.1 billion, an increase of 80 percent year on year, and an increase of approximately four percent from the prior quarter.  Standard Product segment revenue was $320 million, a decrease of two percent year on year and an increase of six percent from the prior quarter.  Our GAAP diluted income per share was $0.26 because of positive fall through on incrementally higher revenue, improved operational execution and strong operating expense control.  We generated $718 million in operating cash flow during the quarter, and invested $98 million in net capex, resulting in non-GAAP free cash flow of $620 million, or 25 percent of revenue.  During the quarter, we returned cash to shareholders, by repurchasing $555 million or approximately 6.5 million shares of our stock,” said Richard Clemmer, NXP Chief Executive Officer.

“On a comparable basis, taking into account the Freescale merger and product line divestures, total revenue was down approximately three percent year on year, notwithstanding our Automotive operating segment which delivered five percent year on year comparable growth.  We believe we have begun to see incremental positive trends in most of our businesses with comparable sequential revenue up over four percent into the third quarter. 

“In summary, I am pleased with the progress we continue to achieve, our efforts relative to the merger integration and targeted synergy capture continues to be very positive. Customer feedback on the benefits the combined portfolio can deliver are very encouraging, and we believe we are ideally positioned to achieve our long term goals,” said Clemmer. 

Summary of Reported Third Quarter 2016 Results ($ millions, unaudited)

(1) Please see “Non-GAAP Financial Measures” on page 4 of this release

Additional Information for the Third Quarter 2016:

In recent months the U.S. Securities and Exchange Commission (“SEC”) has increased its focus on the general use of non-GAAP financial metrics and reporting by U.S. listed companies.  In May 2016, the SEC issued new and revised Compliance & Disclosure Interpretations that relate to the reporting of non-GAAP financial measures by all U.S. listed companies.  As a result, NXP has re-evaluated its use of non-GAAP financial information, to ensure that when used in conjunction with its reported GAAP results, its non-GAAP financial information provides a clear reflection of the underlying operational performance of NXP.  Starting for the third quarter of 2016, NXP will limit its forward guidance to the following GAAP financial information; Revenue, Gross Profit, Operating Income, Financial Income and Expense, Non-Controlling Interest and Net Cash Paid for Income Taxes. In addition, NXP will limit the non-GAAP financial measures in its forward guidance and subsequent results to non-GAAP Gross Profit, non-GAAP Operating Income, and non-GAAP Financial Income and Expense.

On September 22, 2016 NXP refinanced its $1,440 million Term Loan F, due 2020 to a rate of Libor + 2.50%, without a floor from Libor + 3.00% with a 75 basis-point floor. The principle amount did not change.

On August 11, 2016 NXP issued a $1,000 million aggregate principle amount of 3.875% senior unsecured notes due 2022. NXP used the proceeds from the offering, together with cash on hand to redeem the remaining $960 million aggregate principle amount of outstanding senior secured notes due 2022, and to pay certain related financing costs.

On August 1, 2016, NXP issued a $500 million aggregate principle amount of 4.125% senior unsecured notes, as a tap issue to its existing 2021 senior notes. NXP used the proceeds from the offering to redeem the remaining$200 million aggregate principle amount of outstanding senior secured notes due 2016, and used the remainder of the proceeds for general corporate purposes. 

On August 8, 2016, NXP acquired certain mobile transaction assets and design engineers to complement our existing efforts. With this transaction, NXP reinforces its capabilities with a skilled engineering team focused on mobile applications.

In the third quarter of 2016, SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported third quarter 2016 operating income of $41 million, EBITDA of $55 million and a closing cash balance of $275 million. During the quarter SSMC paid a previously announced dividend of $325 million.

In third quarter of 2016, utilization in the combined NXP wafer-fabs averaged 93 percent.

During the third quarter of 2016, NXP repurchased approximately 6.5 million shares for a total cost of approximately $555 million.  Weighted average number of diluted shares (after deduction of treasury shares) for the three month period ended October 2, 2016 was 344.4 million.

In the third quarter of 2016 net cash paid for interest was $57 million and net cash paid for income taxes was $19 million.

Supplemental Information ($ millions, unaudited) (1, 2, 3, 4)

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