Additional Information for the First Quarter 2018 :
- On October 27, 2016 Qualcomm, Incorporated (NASDAQ:QCOM), (“Qualcomm”) and NXP Semiconductors N.V. (NASDAQ:NXPI), announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Qualcomm will acquire NXP. Under the terms of the revised definitive agreement, a subsidiary of Qualcomm will commence a tender offer to acquire all the issued and outstanding shares of NXP for $127.50 per share in cash. The tender offer commenced on November 18, 2016.
- On April 19, 2018 Qualcomm and NXP entered into an amendment to their purchase agreement, extending the end date of the purchase agreement until July 25, 2018. The amendment also provides that if the parties have not received all required regulatory approvals, including from the Ministry of Commerce in China (MOFCOM), by 11:59 p.m. New York City time on July 25, 2018, Qualcomm will pay the previously agreed termination fee to NXP no later than 9:00 a.m. New York City time on July 26, 2018.
- Total gross debt was $6.58 billion, up from the $6.57 billion at the end of the fourth quarter of 2017, and up from the $6.51 billion at the end of the first quarter of 2017. Cash was $3.98 billion, an increase from the $3.55 billion at the end of the fourth quarter of 2017, and an increase from the $2.24 at the end of the first quarter of 2017. Net debt at the end of the first quarter was $2.60 billion, a decline from the $3.02 billion at the end of the fourth quarter of 2017, and decline from $4.27 billion at the end of the first quarter of 2017. Trailing twelve months, adjusted EBITDA was $3.18 billion, an increase from $3.16 billion at the end of the fourth quarter of 2017, and an increase from $3.06 billion at the end of the first quarter of 2017. Financial leverage, defined as net debt divided by trailing twelve months adjusted EBITDA was 0.82x, an improvement from 0.96x at the end of the fourth quarter of 2017, and an improvement from 1.40x reported at the end of the first quarter of 2017.
- Cash flow from operations was $620 million, a decrease from the $738 million at the end of the fourth quarter of 2017. Net capital expenditures on property, plant and equipment was $156 million, an increase from the $132 million at the end of the fourth quarter of 2017. Non-GAAP free cash flow, defined as cash flow from operations, less net capital expenditures on property, plant and equipment was $464 million, a decrease from the $606 million at the end of the fourth quarter of 2017.
- During the first quarter NXP repurchased 0.3 million shares for a total cost of $30 million. Weighted average number of diluted shares (after deduction of treasury shares) for the three-month period ended April 1, 2018 was 347 million. Due to the pending acquisition by Qualcomm, NXP has suspended its open market share repurchases. Shares are currently only repurchased in relation to employee equity award transactions.
- Net cash paid for interest was $21 million in the first quarter.
- Net cash paid for income taxes related to on-going operations was $16 million, with an additional $28 million paid related to the divestment of the Standard Products business, for a total of $44 million.
- SSMC, NXP’s consolidated joint-venture wafer fab with TSMC, reported first quarter 2018 operating income of $31 million, EBITDA of $43 million and a closing cash balance of $241 million.
- NXP combined wafer-fab utilization averaged 93 percent, as compared to 91 percent in the prior quarter, and 95% in the first quarter of 2017.
- Working capital metrics and channel inventory was:
- Days of inventory held by NXP was 106 days, up 7 days sequentially versus the fourth quarter;
- Days payable was 83 days, down 9 days sequentially from the fourth quarter;
- Days sales was 32 days a decline of 1 day sequentially from the fourth quarter;
- The cash conversion cycle was 55 days, an increase of 15 days versus the fourth quarter;
- Channel inventory held by NXP’s distribution partners was 2.4 months, essentially flat on a sequential basis, and in line with NXPs long-term channel target of 2.5 months, plus or minus a half month;
- Sales into the distribution channel were down 14 percent sequentially;
- Sales out of the distribution channel were down 8 percent sequentially.
Supplemental Information ($ millions, unaudited)
| Q1 2018 | Q4 2017 | Q1 2017 | Q-Q | Y-Y | ||||||||||||||
| Automotive | $ | 995 | $ | 970 | $ | 906 | 3 | % | 10 | % | ||||||||
| Secure Identification Solutions (SIS) | $ | 142 | $ | 136 | $ | 114 | 4 | % | 25 | % | ||||||||
| Secure Connected Devices (SCD) | $ | 633 | $ | 745 | $ | 541 | -15 | % | 17 | % | ||||||||
| Secure Interface & Infrastructure (SI&I) | $ | 396 | $ | 497 | $ | 450 | -20 | % | -12 | % | ||||||||
| High Performance Mixed Signal (HPMS) | $ | 2,166 | $ | 2,348 | $ | 2,011 | -8 | % | 8 | % | ||||||||
| Standard Products (STDP) | $ | - | $ | - | $ | 118 | NM | NM | ||||||||||
| Product Revenue | $ | 2,166 | $ | 2,348 | $ | 2,129 | -8 | % | 2 | % | ||||||||
| Corporate & Other | $ | 103 | $ | 108 | $ | 82 | -5 | % | 26 | % | ||||||||
| Total Revenue | $ | 2,269 | $ | 2,456 | $ | 2,211 | -8 | % | 3 | % | ||||||||
