Notice to Investors
This press release is for informational purposes only, and it does not constitute an offer to purchase or a solicitation of an offer to sell any securities. The offer is being made pursuant to a Tender Offer Statement on Schedule TO filed by ON Semiconductor with the SEC on December 4, 2015. Fairchild filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC with respect to the tender offer on December 4, 2015. THE TENDER OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE, THE RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND THE SOLICITATION / RECOMMENDATION STATEMENT, INCLUDING IN EACH CASE ANY AMENDMENTS OR SUPPLEMENTS THERETO, CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF FAIRCHILD COMMON STOCK ARE URGED TO READ THESE DOCUMENTS CAREFULLY BECAUSE THEY CONTAIN IMPORTANT INFORMATION THAT HOLDERS OF SHARES OF FAIRCHILD COMMON STOCK SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. The Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, are being made available to all holders of shares of Fairchild common stock at no expense to them. The tender offer materials and the Solicitation/Recommendation Statement are available at no charge on the SEC’s website at www.sec.gov.
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ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES |
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| UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||||||||||||
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(in millions, except per share data) |
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| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, |
October 2, |
December 31, | December 31, | December 31, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Revenues | $ | 840.3 | $ | 904.2 | $ | 864.2 | $ | 3,495.8 | $ | 3,161.8 | ||||||||||
| Cost of revenues (exclusive of amortization shown below) | 560.4 |
595.7 |
586.5 | 2,302.6 | 2,076.9 | |||||||||||||||
| Gross profit | 279.9 | 308.5 | 277.7 | 1,193.2 | 1,084.9 | |||||||||||||||
| Gross margin | 33.3 | % | 34.1 | % | 32.1 | % | 34.1 | % | 34.3 | % | ||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 91.0 | 104.9 | 110.9 | 396.7 | 366.6 | |||||||||||||||
| Selling and marketing | 48.3 | 52.3 | 56.6 | 204.3 | 200.0 | |||||||||||||||
| General and administrative | 45.7 | 44.9 | 46.7 | 182.3 | 180.9 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 34.6 | 33.6 | 28.8 | 135.7 | 68.4 | |||||||||||||||
| Restructuring, asset impairments and other, net | 4.8 | 3.3 | 10.5 | 9.3 | 30.5 | |||||||||||||||
| Goodwill and intangible asset impairment | — | 0.1 | 9.6 | 3.8 | 9.6 | |||||||||||||||
| Total operating expenses | 224.4 | 239.1 | 263.1 | 932.1 | 856.0 | |||||||||||||||
| Operating income | 55.5 | 69.4 | 14.6 | 261.1 | 228.9 | |||||||||||||||
| Other income (expense), net: | ||||||||||||||||||||
| Interest expense | (14.9 | ) | (14.9 | ) | (9.5 | ) | (49.7 | ) | (34.1 | ) | ||||||||||
| Interest income | 0.3 | 0.2 | 0.9 | 1.1 | 1.5 | |||||||||||||||
| Other | (0.2 | ) | 2.1 | (2.3 | ) | 7.7 | (4.4 | ) | ||||||||||||
| Loss on debt extinguishment | — | — | — | (0.4 | ) | — | ||||||||||||||
| Other expense, net | (14.8 | ) | (12.6 | ) | (10.9 | ) | (41.3 | ) | (37.0 | ) | ||||||||||
| Income before income taxes | 40.7 | 56.8 | 3.7 | 219.8 | 191.9 | |||||||||||||||
| Income tax benefit (provision) | 14.3 | (10.0 | ) | (3.5 | ) | (10.8 | ) | 0.2 | ||||||||||||
| Net income | 55.0 | 46.8 | 0.2 | 209.0 | 192.1 | |||||||||||||||
| Less: Net income attributable to non-controlling interest | (0.9 | ) | (0.5 | ) | (0.8 | ) | (2.8 | ) | (2.4 | ) | ||||||||||
| Net income (loss) attributable to ON Semiconductor Corporation | $ | 54.1 | $ | 46.3 | $ | (0.6 | ) | $ | 206.2 | $ | 189.7 | |||||||||
| Net income per common share attributable to ON Semiconductor Corporation: | ||||||||||||||||||||
| Basic | $ | 0.13 | $ | 0.11 | $ | — | $ | 0.49 | $ | 0.43 | ||||||||||
| Diluted | $ | 0.13 | $ | 0.11 | $ | — | $ | 0.48 | $ | 0.43 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 412.5 | 413.7 | 435.9 | 421.2 | 439.5 | |||||||||||||||
| Diluted | 416.9 | 417.5 | 435.9 | 427.8 | 443.5 | |||||||||||||||
| ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | ||||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEET | ||||||||||||
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(in millions) |
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| December 31, |
October 2, |
December 31, | ||||||||||
| 2015 |
2015 (1) |
2014 (1) |
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| Assets | ||||||||||||
| Cash and cash equivalents | $ | 617.6 | $ | 556.8 | $ | 511.7 | ||||||
| Short-term investments | — | 0.8 | 6.1 | |||||||||
| Receivables, net | 426.4 | 505.9 | 417.5 | |||||||||
| Inventories | 750.4 | 754.0 | 729.9 | |||||||||
| Other current assets | 97.1 | 134.6 | 140.6 | |||||||||
| Total current assets | 1,891.5 | 1,952.1 | 1,805.8 | |||||||||
| Property, plant and equipment, net | 1,274.1 | 1,256.1 | 1,203.9 | |||||||||
| Goodwill | 270.6 | 270.6 | 263.8 | |||||||||
| Intangible assets, net | 325.8 | 360.5 | 458.5 | |||||||||
| Other assets | 107.6 | 95.3 | 90.1 | |||||||||
| Total assets | $ | 3,869.6 | $ | 3,934.6 | $ | 3,822.1 | ||||||
| Liabilities, Non-Controlling Interest and Stockholders’ Equity | ||||||||||||
| Accounts payable | $ | 337.7 | $ | 361.9 | $ | 378.2 | ||||||
| Accrued expenses | 246.2 | 306.4 | 287.9 | |||||||||
| Deferred income on sales to distributors | 112.0 | 130.4 | 165.1 | |||||||||
| Current portion of long-term debt | 543.4 | 538.7 | 209.6 | |||||||||
| Total current liabilities | 1,239.3 | 1,337.4 | 1,040.8 | |||||||||
| Long-term debt | 850.5 | 853.8 | 982.1 | |||||||||
| Other long-term liabilities | 147.9 | 162.3 | 151.8 | |||||||||
| Total liabilities | 2,237.7 | 2,353.5 | 2,174.7 | |||||||||
| ON Semiconductor Corporation stockholders’ equity: | ||||||||||||
| Common stock | 5.3 | 5.3 | 5.2 | |||||||||
| Additional paid-in capital | 3,420.3 | 3,404.0 | 3,281.2 | |||||||||
| Accumulated other comprehensive loss | (42.3 | ) | (44.1 | ) | (41.5 | ) | ||||||
| Accumulated deficit | (709.4 | ) | (763.5 | ) | (915.6 | ) | ||||||
| Less: Treasury stock, at cost | (1,065.7 | ) | (1,043.4 | ) | (702.8 | ) | ||||||
| Total ON Semiconductor Corporation stockholders’ equity | 1,608.2 | 1,558.3 | 1,626.5 | |||||||||
| Non-controlling interest in consolidated subsidiary | 23.7 | 22.8 | 20.9 | |||||||||
| Total stockholders' equity | 1,631.9 | 1,581.1 | 1,647.4 | |||||||||
| Total liabilities and equity | $ | 3,869.6 | $ | 3,934.6 | $ | 3,822.1 | ||||||
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(1) |
The Company retrospectively adjusted certain amounts shown above for the periods ended October 2, 2015 and December 31, 2014, related to measurement period adjustments with respect to the purchase price allocation of our recent acquisitions and for the adoption of Accounting Standards Update No. 2015-03 - "Simplifying the Presentation of Debt Issuance Costs." |
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| ON SEMICONDUCTOR CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA* AND | ||||||||||||||||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | ||||||||||||||||||||
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(in millions) |
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| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, |
October 2, |
December 31, | December 31, | December 31, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||
| Net income | $ | 55.0 | $ | 46.8 | $ | 0.2 | $ | 209.0 | $ | 192.1 | ||||||||||
| Adjusted for: | ||||||||||||||||||||
| Restructuring, asset impairments and other, net | 4.8 | 3.3 | 10.5 | 9.3 | 30.5 | |||||||||||||||
| Goodwill and intangible asset impairment | — | 0.1 | 9.6 | 3.8 | 9.6 | |||||||||||||||
| Interest expense | 14.9 | 14.9 | 9.5 | 49.7 | 34.1 | |||||||||||||||
| Interest income | (0.3 | ) | (0.2 | ) | (0.9 | ) | (1.1 | ) | (1.5 | ) | ||||||||||
| Loss on debt extinguishment | — | — | — | 0.4 | — | |||||||||||||||
| Gain on sale of available-for-sale securities | — | (0.7 | ) | — | (5.4 | ) | — | |||||||||||||
| Income tax (benefit) provision | (14.3 | ) | 10.0 | 3.5 | 10.8 | (0.2 | ) | |||||||||||||
| Net income attributable to non-controlling interest | (0.9 | ) | (0.5 | ) | (0.8 | ) | (2.8 | ) | (2.4 | ) | ||||||||||
| Depreciation and amortization | 89.8 | 89.2 | 86.4 | 357.6 | 268.8 | |||||||||||||||
| Actuarial (gains) losses on pension plans and other pension benefits | (5.0 | ) | — | 12.3 | (5.0 | ) | 12.3 | |||||||||||||
| Expensing of appraised inventory at fair market value step up | — | — | 12.8 | — | 27.0 | |||||||||||||||
| Third party acquisition related costs | 3.3 | 0.2 | 0.1 | 3.5 | 8.1 | |||||||||||||||
| Adjusted EBITDA* | 147.3 | 163.1 | 143.2 | 629.8 | 578.4 | |||||||||||||||
| Increase (decrease): | ||||||||||||||||||||
| Restructuring, asset impairments and other, net | (4.8 | ) | (3.3 | ) | (10.5 | ) | (9.3 | ) | (30.5 | ) | ||||||||||
| Interest expense | (14.9 | ) | (14.9 | ) | (9.5 | ) | (49.7 | ) | (34.1 | ) | ||||||||||
| Interest income | 0.3 | 0.2 | 0.9 | 1.1 | 1.5 | |||||||||||||||
| Gain on sale of available-for-sale securities | — | 0.7 | — | 5.4 | — | |||||||||||||||
| Income tax benefit (provision) | 14.3 | (10.0 | ) | (3.5 | ) | (10.8 | ) | 0.2 | ||||||||||||
| Net income attributable to non-controlling interest | 0.9 | 0.5 | 0.8 | 2.8 | 2.4 | |||||||||||||||
| Actuarial gains (losses) on pension plans and other pension benefits | 5.0 | — | (12.3 | ) | 5.0 | (12.3 | ) | |||||||||||||
| Expensing of appraised inventory at fair market value step up | — | — | (12.8 | ) | — | (27.0 | ) | |||||||||||||
| Third party acquisition related costs | (3.3 | ) | (0.2 | ) | (0.1 | ) | (3.5 | ) | (8.1 | ) | ||||||||||
| Loss (gain) on sale or disposal of fixed assets | 0.2 | 0.4 | (0.8 | ) | (3.9 | ) | (1.4 | ) | ||||||||||||
| Amortization of debt issuance costs | 0.9 | 1.0 | 0.4 | 2.8 | 1.4 | |||||||||||||||
| Write-down of excess inventories | 14.0 | 10.2 | 19.5 | 52.4 | 40.6 | |||||||||||||||
| Non-cash asset impairment charges | — | — | 4.7 | 0.2 | 6.5 | |||||||||||||||
| Non-cash share-based compensation expense | 10.6 | 10.9 | 12.8 | 46.9 | 45.8 | |||||||||||||||
| Non-cash interest | 6.3 | 6.4 | 1.9 | 17.5 | 7.0 | |||||||||||||||
| Change in deferred taxes | (9.3 | ) | 0.5 | (3.9 | ) | (9.2 | ) | (18.8 | ) | |||||||||||
| Other | 2.7 | (0.4 | ) | 3.0 | (2.8 | ) | 1.8 | |||||||||||||
| Changes in operating assets and liabilities | (13.0 | ) | (36.8 | ) | 28.7 | (204.1 | ) | (72.1 | ) | |||||||||||
| Net cash provided by operating activities | $ | 157.2 | $ | 128.3 | $ | 162.5 | 470.6 | 481.3 | ||||||||||||
