Seasonal slip drops ON Semiconductor revenues

ON Semiconductor Corp has announced that total revenues in the first quarter of 2006 were $334.0 million, a decrease of approximately 2% from the fourth quarter of 2005.

ON Semiconductor Corp has announced that total revenues in the first quarter of 2006 were $334.0 million, a decrease of approximately 2% from the fourth quarter of 2005.

During the first quarter of 2006, the company reported net income of $40.4 million.

Fully diluted earnings per share for the first quarter of 2006 were $0.12 per share.

First quarter 2006 results include approximately $1.9 million associated with stock-based compensation expense due to the adoption of FAS 123 Share Based Payment, and included a $2.3 million investment gain shown in other income.

During the fourth quarter of 2005, the company reported net income of $43.8 million, or $0.07 per share, on a fully diluted basis, which included a deemed dividend charge of approximately $0.06 per share, associated with a premium, in the form of inducement shares, for the conversion of the Series A Cumulative Preferred Stock into common stock.

On a mix-adjusted basis, average selling prices in the first quarter of 2006 were down approximately 1% from the fourth quarter of 2005.

The company's gross margin in the first quarter was 35.2%, an increase of approximately 20 basis points, as compared with the fourth quarter of 2005.

EBITDA for the first quarter of 2006 was $76.9 million, compared with EBITDA for the fourth quarter of 2005 of $76.8 million, which included a $0.8 million in restructuring, asset impairments and other benefit.

"Our revenue, while down sequentially in the first quarter of 2006 due to seasonality in our consumer related end markets, grew by over 10%, compared with the first quarter of 2005, and gross margins grew by 340 basis points", said Keith Jackson, ON Semiconductor President and CEO.

"As we enter the second quarter of 2006, we continue to focus our team on supporting strong customer demand, and developing and winning power solution designs in key consumer platforms".

"We anticipate completing the purchase of LSI Logic's Gresham, Oregon, wafer fabrication facility in May, as stated in our 6th April press release, and believe the Gresham facility is another step in our efforts to provide our customers with state-of-the-art high-performance analogue and digital power solutions".

"In April, the company successfully raised approximately $75 million, net of expenses, through a common stock offering of approximately 11 million shares, to pay a portion of the purchase price of the Gresham facility".

"Not including any increased revenue associated with completing the purchase of the Gresham facility, and based on booking trends, backlog levels and estimated turns levels, we anticipate that total revenues will be approximately $350 to $355 million in the second quarter of 2006", Jackson said.

"Backlog levels at the beginning of the second quarter were up from backlog levels at the beginning of the first quarter of 2006, and represented well over 90% of our anticipated second quarter 2006 revenues".

"We expect that average selling prices for the second quarter of 2006 will be flat to slightly up sequentially".

"We also expect that gross margins will continue to grow by between 50 to 100 basis points sequentially in the second quarter of 2006".

"Beginning in the first quarter of 2006, we were required to expense stock-based compensation".

"This is in accordance with the Statement of Financial Accounting Standards No 123 Share Based Payment".

"We currently expect this expense to be approximately $2.5 million in the second quarter of 2006".

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