Freescale Semiconductor Announces First Quarter 2011 Results

Highlights for the first quarter of 2011 include:

Net sales of $1.19 billion;
Trailing twelve month Adjusted EBITDA of $1.24 billion;
Cash and cash equivalents of $1.04 billion.

“Our first quarter marked a solid start to the year with improvement in sales and margins,” said Rich Beyer, chairman and CEO. “We continue to strengthen our market leadership and are well positioned for continued improvement throughout 2011.”

Operating Results

Net sales for the first quarter of 2011 were $1.19 billion, compared to $1.18 billion in the fourth quarter of 2010 and $1.02 billion in the first quarter last year.

The loss from operations for the three months ended April 1, 2011 was $3 million, compared to a profit of $17 million in the fourth quarter of 2010 and a loss of $61 million in the first quarter of 2010. The net loss for the first quarter of 2011 was $148 million, compared to a loss of $102 million in the fourth quarter of 2010 and a loss of $257 million in the same period last year.

Adjusted operating earnings (defined in the Notes to the Consolidated Financial Information attached to this press release) for the three months ended April 1, 2011, were $201 million compared to earnings of $177 million in the fourth quarter of 2010 and $95 million in the first quarter of 2010.

Adjusted net earnings (defined in the Notes to the Consolidated Financial Information attached to this press release) for the three months ended April 1, 2011, were $57 million compared to earnings of $29 million in the fourth quarter of 2010 and a loss of $51 million in the first quarter of 2010.

Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) (defined in the Notes to the Consolidated Financial Information attached to this press release) was $287 million for the first quarter of 2011, compared to $280 million in the fourth quarter of 2010 and $194 million in the first quarter of 2010.

Descriptions of adjusted gross margin, EBITDA, Adjusted EBITDA, adjusted operating earnings, adjusted net earnings and the reconciliations to our GAAP results are included in the tables and notes attached to this press release.


Japan Earthquake Impact

First quarter 2011 results include a $90 million charge associated with the company’s inability to reopen its Sendai, Japan wafer fabrication facility, which was seriously damaged by the March 11 earthquake, continuing aftershocks and disruptions to utilities and local infrastructure. The charge primarily consisted of non-cash asset impairment charges of $49 million and non-cash charges of $15 million related to damaged inventory. The charge also included $26 million of cash charges consisting of incremental employee termination benefits, contract termination and other costs.

These non-cash and cash charges do not take into consideration any potential cost savings resulting from the closure or any offset resulting from potential recoveries from Freescale’s insurance coverage associated with the earthquake.

Product Revenues

The company’s net sales figures for the first quarter of 2011 are as follows:

Microcontroller net sales were $424 million in the first quarter of 2011, compared to $415 million in the fourth quarter of 2010 and $374 million in the first quarter of 2010.
RF, Analog and Sensor net sales were $290 million in the first quarter of 2011, compared to $285 million in the fourth quarter of 2010 and $245 million in the first quarter of 2010.
Networking and Multimedia net sales were $303 million in the first quarter of 2011, compared to $338 million in the fourth quarter of 2010 and $255 million in the first quarter of 2010.
Cellular net sales were $138 million in the first quarter of 2011, compared to $111 million in the fourth quarter of 2010 and $121 million in the first quarter of 2010.
Other net sales were $39 million in the first quarter of 2011 compared to $33 million in the fourth quarter of 2010 and $25 million in the first quarter of 2010.

Financial Position

Cash and cash equivalents were $1.04 billion at April 1, 2011, inclusive of interest payments and capital expenditures.