ALMELO, Netherlands,
April 28, 2015 /PRNewswire/ --
Sensata Technologies Holding N.V. (NYSE: ST) (the "Company")
announces results of its operations for the first quarter ended
March 31, 2015.
Highlights of the First Quarter ended March 31,
2015
Net revenue for the first quarter 2015 was $750.7 million, an increase of $199.1 million, or 36.1%, from $551.6 million for the first quarter 2014. Net
income for the first quarter 2015 was $35.4
million, or $0.21 per diluted
share. This compares to Net income for the first quarter 2014 of
$68.4 million, or $0.39 per diluted share. Adjusted net
income1 for the first quarter 2015 was $110.9 million which was 14.8% of Net revenue, or
$0.65 per diluted share. This
was an increase of 13.1% compared to Adjusted net
income1 for the first quarter 2014 of $98.1 million which was 17.8% of Net revenue, or
$0.56 per diluted share.
Integration charges related to acquisitions were $3.6 million for the first quarter of 2015.
"We are pleased with our results for the first quarter with Net
revenue and Adjusted net income in line with our expectations,"
said Martha Sullivan, President and
Chief Executive Officer. "Despite increased foreign exchange
headwinds, we remain on-track for 2015 to be a year of strong
double-digit growth."
The Company spent $58.1 million,
or 7.7% of Net revenue, on research, development and engineering
related costs in the first quarter of 2015 to fund growth
initiatives. These costs reside in both the Cost of revenue
and the Research and development lines of the Condensed
Consolidated Statements of Operations.
The Company's ending cash balance at March 31, 2015 was
$195.6 million. During the
first quarter of 2015, the Company generated cash of $103.1 million from operations, used cash of
$35.0 million in investing activities
and used cash of $83.9 million in
financing activities.
The Company recorded a provision for income taxes of
$10.5 million for the first quarter
2015. Approximately $9.0
million of the provision, or 5.9% of Adjusted EBIT, related
to taxes that are payable in cash and approximately $1.5 million related to deferred and other income
tax expense.
The Company's total indebtedness at March 31, 2015 was
$2.8 billion. The Company's Net
debt2 was $2.6 billion,
resulting in a Net leverage ratio2 of 4.1x as of
March 31, 2015. In connection
with the Company's refinancing of its 6.5% Senior Notes due 2019,
the last $79.1 million of these notes
has been classified as short-term debt and notice has been given
for these to be called on April 29,
2015.
Segment Performance
|
|
Three months
ended
|
$ in 000s
|
|
March 31,
2015
|
|
March 31,
2014
|
Performance Sensing
net revenue
|
|
$
|
591,252
|
|
|
$
|
394,626
|
|
Performance Sensing
profit from operations
|
|
143,872
|
|
|
109,344
|
|
% of Performance
Sensing net revenue
|
|
24.3
|
%
|
|
27.7
|
%
|
|
|
|
|
|
Sensing Solutions net
revenue
|
|
$
|
159,433
|
|
|
$
|
156,968
|
|
Sensing Solutions
profit from operations
|
|
49,218
|
|
|
48,023
|
|
% of Sensing
Solutions net revenue
|
|
30.9
|
%
|
|
30.6
|
%
|
Guidance
The Company anticipates Net revenue of $755 to $795 million for the second quarter 2015
which, at the midpoint, is 35% higher than second quarter 2014 Net
revenue of $575.9 million. The
Company further anticipates Adjusted EBITDA3 of
$180 to $192 million for the second
quarter 2015. In addition, the Company expects Adjusted net
income1 of $119 to $129
million, or $0.69 to $0.75 per
diluted share for the second quarter 2015. This guidance
assumes a diluted share count of 171.5 million for the second
quarter 2015.
For the full year 2015, the Company continues to anticipate Net
revenue of $2.985 to $3.145 billion
which, at the midpoint, is 27.2% higher than the full year 2014 net
revenue of $2.41 billion. The
Company further anticipates Adjusted EBITDA3 of
$725 to $775 million for the full
year 2015. In addition, the Company expects Adjusted net
income1 of $481 to $521
million, or $2.80 to $3.04 per
diluted share for the full year 2015. At the midpoint, this
represents 22.7% growth compared to full year 2014 Adjusted net
income1 per diluted share of $2.38. This guidance assumes a diluted
share count of 171.7 million for the full year 2015.
1See Non-GAAP Measures for discussion of Adjusted net
income which includes a reconciliation of this measure to Net
income.
2Net debt represents total indebtedness including
Capital lease and other financing obligations, less Cash and cash
equivalents. The Net leverage ratio represents Net debt
divided by Adjusted EBITDA for the last twelve months.
3The Company defines Adjusted EBITDA as Adjusted net
income excluding cash interest expense, cash tax expense,
depreciation expense (excluding step-up depreciation expense
related to acquisitions) and amortization expense (excluding
amortization expense on acquisition related intangibles).
Company Earnings Conference Call
The Company will conduct a conference call today at 8:00 AM eastern time to discuss the financial
results for its first quarter ended March 31, 2015. The
U.S. dial in number is 877-486-0682 and the non-U.S. dial in number
is 706-634-5536. The passcode is 20302336. A live
webcast and a replay of the conference call will also be available
on the investor relations page of the Company's website at
http://investors.sensata.com.
About Sensata Technologies Holding N.V.
Sensata Technologies Holding N.V. is one of the world's leading
suppliers of sensing, electrical protection, control and power
management solutions with operations and business centers in
sixteen countries. Sensata's products improve safety,
efficiency and comfort for millions of people every day in
automotive, appliance, aircraft, industrial, military, heavy
vehicle, heating, air-conditioning and ventilation, data,
telecommunications, recreational vehicle and marine applications.
For more information, please visit Sensata's website at
www.sensata.com.
Safe Harbor Statement
This earnings release contains forward-looking statements within
the meaning of the federal securities laws. These statements
relate to analyses and other information, which are based on
forecasts of future results and estimates of amounts not yet
determinable, and the Company's future prospects, developments and
business. Such forward-looking statements include, among
other things, the Company's anticipated results for the second
quarter and full year 2015. Such statements involve risks or
uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statements.
Factors that might cause these differences include, but are not
limited to, risks associated with: adverse developments in the
automotive industry; competitive pressures that could require the
Company to lower prices or result in reduced demand for the
Company's products; integration of acquired companies, including
Schrader; the assumption of known and unknown liabilities in the
acquisition of Schrader; risks associated with the Company's non-US
operations and international business; litigation and disputes
involving the Company, including the extent of intellectual
property, product liability, and warranty claims asserted against
the Company; risks associated with the Company's historical and
future tax positions; risks related to labor disruptions or costs;
and risks associated with the Company's substantial
indebtedness. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak to
results only as of the date the statements were made; and the
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether to reflect any future events or
circumstances or otherwise. For a discussion of potential
risks and uncertainties, please refer to the risk factors listed in
the Company's SEC filings. Copies of the Company's filings
are available from its Investor Relations department or from the
SEC website, www.sec.gov.
Contact:
|
|
|
|
|
|
Investors
|
|
News Media
|
Jacob
Sayer
|
|
Linda
Megathlin
|
(508)
236-3800
|
|
(508)
236-1761
|
investors@sensata.com
|
|
lmegathlin@sensata.com
|
SENSATA
TECHNOLOGIES HOLDING N.V.
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
(In 000s, except per
share amounts)
|
|
|
|
|
|
|
For the three
months ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
Net
revenue
|
|
$
|
750,685
|
|
|
$
|
551,594
|
|
Operating costs and
expenses:
|
|
|
|
|
Cost of
revenue
|
|
506,633
|
|
|
357,199
|
|
Research and
development
|
|
30,736
|
|
|
17,664
|
|
Selling, general and
administrative
|
|
64,396
|
|
|
44,672
|
|
Amortization of
intangible assets
|
|
45,809
|
|
|
32,016
|
|
Restructuring and
special charges
|
|
720
|
|
|
865
|
|
Total operating costs
and expenses
|
|
648,294
|
|
|
452,416
|
|
Profit from
operations
|
|
102,391
|
|
|
99,178
|
|
Interest
expense
|
|
(34,880)
|
|
|
(23,512)
|
|
Interest
income
|
|
119
|
|
|
308
|
|
Other, net
|
|
(21,757)
|
|
|
538
|
|
Income before
taxes
|
|
45,873
|
|
|
76,512
|
|
Provision for income
taxes
|
|
10,518
|
|
|
8,139
|
|
Net
income
|
|
$
|
35,355
|
|
|
$
|
68,373
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
|
$
|
0.21
|
|
|
$
|
0.40
|
|
Diluted
|
|
$
|
0.21
|
|
|
$
|
0.39
|
|
|
|
|
|
|
Weighted-average
ordinary shares outstanding:
|
|
|
Basic
|
|
169,487
|
|
|
172,085
|
|
Diluted
|
|
171,262
|
|
|
174,151
|
|
SENSATA
TECHNOLOGIES HOLDING N.V.
|
Condensed
Consolidated Statements of Comprehensive Income
|
(Unaudited)
|
|
|
|
|
|
($ in
000s)
|
|
|
|
|
|
|
For the three
months ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
Net
income
|
|
$
|
35,355
|
|
|
$
|
68,373
|
|
Other comprehensive
income, net of tax:
|
|
|
|
|
Deferred gain on
derivative instruments, net of reclassifications
|
|
21,504
|
|
|
2,165
|
|
Defined benefit and
retiree healthcare plans
|
|
(389)
|
|
|
(71)
|
|
Other comprehensive
income
|
|
21,115
|
|
|
2,094
|
|
Comprehensive
income
|
|
$
|
56,470
|
|
|
$
|
70,467
|
|
SENSATA
TECHNOLOGIES HOLDING N.V.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
($ in
000s)
|
|
|
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
195,581
|
|
|
$
|
211,329
|
|
Accounts receivable,
net of allowances
|
|
488,335
|
|
|
444,852
|
|
Inventories
|
|
346,799
|
|
|
356,364
|
|
Deferred income tax
assets
|
|
14,976
|
|
|
15,301
|
|
Prepaid expenses and
other current assets
|
|
123,375
|
|
|
90,918
|
|
Total current
assets
|
|
1,169,066
|
|
|
1,118,764
|
|
Property, plant and
equipment, net
|
|
608,349
|
|
|
589,484
|
|
Goodwill
|
|
2,426,221
|
|
|
2,424,795
|
|
Other intangible
assets, net
|
|
867,853
|
|
|
910,774
|
|
Deferred income tax
assets
|
|
8,147
|
|
|
16,750
|
|
Deferred financing
costs
|
|
30,220
|
|
|
29,102
|
|
Other
assets
|
|
30,874
|
|
|
26,940
|
|
Total
assets
|
|
$
|
5,140,730
|
|
|
$
|
5,116,609
|
|
|
|
|
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term debt, capital lease and other financing
obligations
|
|
$
|
170,031
|
|
|
$
|
145,979
|
|
Accounts
payable
|
|
305,925
|
|
|
287,800
|
|
Income taxes
payable
|
|
7,323
|
|
|
7,516
|
|
Accrued expenses and
other current liabilities
|
|
235,000
|
|
|
222,781
|
|
Deferred income tax
liabilities
|
|
12,524
|
|
|
13,430
|
|
Total current
liabilities
|
|
730,803
|
|
|
677,506
|
|
Deferred income tax
liabilities
|
|
361,769
|
|
|
362,738
|
|
Pension and
post-retirement benefit obligations
|
|
33,099
|
|
|
35,799
|
|
Capital lease and
other financing obligations, less current portion
|
|
47,154
|
|
|
45,113
|
|
Long-term debt, net
of discount, less current portion
|
|
2,560,799
|
|
|
2,650,744
|
|
Other long-term
liabilities
|
|
39,474
|
|
|
41,817
|
|
Total
liabilities
|
|
3,773,098
|
|
|
3,813,717
|
|
Total shareholders'
equity
|
|
1,367,632
|
|
|
1,302,892
|
|
Total liabilities
and shareholders' equity
|
|
$
|
5,140,730
|
|
|
$
|
5,116,609
|
|
SENSATA
TECHNOLOGIES HOLDING N.V.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
($ in
000s)
|
|
For the three months
ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
|
35,355
|
|
|
$
|
68,373
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
21,842
|
|
|
15,603
|
|
Amortization of
deferred financing costs and discounts
|
|
1,653
|
|
|
986
|
|
Currency remeasurement
gain on debt
|
|
(570)
|
|
|
(122)
|
|
Share-based
compensation
|
|
3,187
|
|
|
2,585
|
|
Loss on debt
financing
|
|
19,564
|
|
|
—
|
|
Amortization of
inventory step-up to fair value
|
|
—
|
|
|
683
|
|
Amortization of
intangible assets
|
|
45,809
|
|
|
32,016
|
|
Deferred income
taxes
|
|
1,357
|
|
|
4,478
|
|
Gains from insurance
proceeds
|
|
—
|
|
|
(2,417)
|
|
Unrealized loss/(gain)
on hedges and other non-cash items
|
|
879
|
|
|
(2,790)
|
|
Changes in operating
assets and liabilities, net of effects of acquisitions
|
|
(25,966)
|
|
|
(13,999)
|
|
Net cash provided by
operating activities
|
|
103,110
|
|
|
105,396
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of
Schrader, net of cash received
|
|
(958)
|
|
|
—
|
|
Other acquisitions,
net of cash received
|
|
3,881
|
|
|
(58,281)
|
|
Additions to
property, plant and equipment and capitalized software
|
|
(37,878)
|
|
|
(27,308)
|
|
Insurance
proceeds
|
|
—
|
|
|
2,417
|
|
Net cash used in
investing activities
|
|
(34,955)
|
|
|
(83,172)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
exercise of stock options and issuance of ordinary
shares
|
|
4,902
|
|
|
7,836
|
|
Proceeds from
issuance of debt
|
|
700,000
|
|
|
—
|
|
Payments on
debt
|
|
(768,568)
|
|
|
(2,582)
|
|
Payments to
repurchase ordinary shares
|
|
—
|
|
|
(11,310)
|
|
Payments of debt
issuance costs
|
|
(20,237)
|
|
|
—
|
|
Net cash used in
financing activities
|
|
(83,903)
|
|
|
(6,056)
|
|
Net change in cash
and cash equivalents
|
|
(15,748)
|
|
|
16,168
|
|
Cash and cash
equivalents, beginning of period
|
|
211,329
|
|
|
317,896
|
|
Cash and cash
equivalents, end of period
|
|
$
|
195,581
|
|
|
$
|
334,064
|
|
Net Revenue by Business, Geography and End Market
(% of total net
revenue)
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
Performance
Sensing
|
|
78.8
|
%
|
|
71.5
|
%
|
Sensing
Solutions
|
|
21.2
|
%
|
|
28.5
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
(% of total net
revenue)
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
Americas
|
|
40.8
|
%
|
|
39.2
|
%
|
Europe
|
|
33.2
|
%
|
|
29.2
|
%
|
Asia
|
|
26.0
|
%
|
|
31.6
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
(% of total net
revenue)
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
European
automotive
|
|
27.7
|
%
|
|
25.0
|
%
|
North American
automotive
|
|
21.2
|
%
|
|
17.2
|
%
|
Asian
automotive
|
|
17.2
|
%
|
|
20.0
|
%
|
Rest of world
automotive
|
|
1.0
|
%
|
|
0.6
|
%
|
Heavy vehicle
off-road
|
|
12.7
|
%
|
|
11.3
|
%
|
Appliance and
heating, ventilation and air-conditioning
|
|
6.1
|
%
|
|
8.9
|
%
|
Industrial
|
|
6.0
|
%
|
|
7.5
|
%
|
All other
|
|
8.1
|
%
|
|
9.5
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
Non-GAAP Measures
Adjusted net income is a non-GAAP financial measure. The Company
defines Adjusted net income as follows: Net income before certain
restructuring and special charges, costs associated with financing
and other transactions, deferred loss/(gain) on other hedges,
depreciation and amortization expense related to the step-up in
fair value of fixed and intangible assets and inventory, deferred
income tax and other tax expense, amortization of deferred
financing costs, and other costs. The Company believes Adjusted net
income provides investors with helpful information with respect to
the performance of the Company's operations, and management uses
Adjusted net income to evaluate its ongoing operations and for
internal planning and forecasting purposes. Adjusted net income is
not a measure of liquidity. See the tables below which
reconcile Net income to Adjusted net income and projected GAAP
earnings per share to projected Adjusted net income per share.
The following unaudited table reconciles the Company's Net
income to Adjusted net income for the three months ended
March 31, 2015 and 2014.
(In 000s, except per
share amounts)
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
Net
income
|
|
$
|
35,355
|
|
|
$
|
68,373
|
|
Restructuring and
special charges
|
|
1,156
|
|
|
(2,417)
|
|
Financing and other
transaction costs
|
|
19,822
|
|
|
68
|
|
Deferred loss/(gain)
on other hedges
|
|
4,038
|
|
|
(4,194)
|
|
Depreciation and
amortization expense related to the step-up in fair value of fixed
and intangible assets and inventory
|
|
47,346
|
|
|
34,622
|
|
Deferred income tax
and other tax expense
|
|
1,486
|
|
|
613
|
|
Amortization of
deferred financing costs
|
|
1,653
|
|
|
986
|
|
Total
adjustments
|
|
$
|
75,501
|
|
|
$
|
29,678
|
|
Adjusted net
income
|
|
$
|
110,856
|
|
|
$
|
98,051
|
|
Weighted average
diluted shares outstanding used in Adjusted net income per share
calculation
|
|
171,262
|
|
|
174,151
|
|
Adjusted net income
per diluted share
|
|
$
|
0.65
|
|
|
$
|
0.56
|
|
The Company's definition of Adjusted net income includes the
current tax expense/(benefit) that will be payable/(realized) on
the Company's income tax return and excludes deferred income tax
and other tax expense/(benefit). As the Company treats
deferred income tax and other tax expense/(benefit) as an
adjustment to compute Adjusted net income, the deferred income tax
effect associated with the reconciling items would not change
Adjusted net income for any period presented. The theoretical
current income tax expense/(benefit) associated with the
reconciling items above would be as follows: Depreciation and
amortization expense related to the step-up in fair value of fixed
and intangible assets and inventory: $0.1 million and $0.6
million for the three months ended March 31, 2015 and
2014, respectively; Restructuring and special charges:
$0.1 million and $0.0 million for the three months ended
March 31, 2015 and 2014, respectively.
The following unaudited table identifies where in the Condensed
Consolidated Statement of Operations the adjustments to reconcile
Net income to Adjusted net income were recorded for the three
months ended March 31, 2015 and 2014.
($ in
000s)
|
|
Three months ended
March 31,
|
|
|
2015
|
|
2014
|
Cost of
revenue
|
|
$
|
9,205
|
|
|
$
|
557
|
|
Selling, general and
administrative
|
|
258
|
|
|
68
|
|
Amortization of
intangible assets
|
|
44,616
|
|
|
31,648
|
|
Restructuring and
special charges
|
|
98
|
|
|
—
|
|
Interest
expense
|
|
1,653
|
|
|
986
|
|
Other, net
|
|
18,185
|
|
|
(4,194)
|
|
Provision for income
taxes
|
|
1,486
|
|
|
613
|
|
Total
adjustments
|
|
$
|
75,501
|
|
|
$
|
29,678
|
|
The following unaudited table reconciles the Company's projected
GAAP earnings per share to projected Adjusted net income per
diluted share for the three months ended June 30, 2015 and full year ended
December 31, 2015. The amounts in the table below have
been calculated based on unrounded numbers. Accordingly,
certain amounts may not add due to the effect of rounding.
|
|
Three months
ended
June 30,
2015
|
|
Full year
ended
December 31,
2015
|
|
|
Low
End
|
|
High
End
|
|
Low
End
|
|
High
End
|
|
|
|
|
|
|
|
|
|
Projected GAAP
earnings per diluted share
|
|
$
|
0.35
|
|
|
$
|
0.41
|
|
|
$
|
1.37
|
|
|
$
|
1.61
|
|
Restructuring and
special charges
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
Financing and other
transaction costs
|
|
0.01
|
|
|
0.01
|
|
|
0.12
|
|
|
0.12
|
|
Deferred (gain)/loss
on other hedges
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
0.02
|
|
Depreciation and
amortization expense related to the step-up in fair value of fixed
and intangible assets and inventory
|
|
0.26
|
|
|
0.26
|
|
|
1.07
|
|
|
1.07
|
|
Deferred income tax
and other tax (benefit)/expense
|
|
0.06
|
|
|
0.06
|
|
|
0.18
|
|
|
0.18
|
|
Amortization of
deferred financing costs
|
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
|
0.04
|
|
Projected Adjusted
net income per diluted share
|
|
$
|
0.69
|
|
|
$
|
0.75
|
|
|
$
|
2.80
|
|
|
$
|
3.04
|
|
Weighted average
diluted shares outstanding used in Adjusted net income per share
calculation (in 000s)
|
|
171,500
|
|
|
171,500
|
|
|
171,700
|
|
|
171,700
|
|
SENSATA TECHNOLOGIES HOLDING N.V.
Notes to unaudited Condensed Consolidated Statements of
Operations, Condensed Consolidated Statements of Comprehensive
Income, Condensed Consolidated Balance Sheets and Condensed
Consolidated Statements of Cash Flows
Basis of Presentation
The accompanying unaudited Condensed Consolidated Statements of
Operations, Condensed Consolidated Statements of Comprehensive
Income, Condensed Consolidated Balance Sheets and Condensed
Consolidated Statements of Cash Flows do not include all of the
information and note disclosures required by accounting principles
generally accepted in the United States
of America for complete financial statements. This
information should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2014. U.S. GAAP requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements. Estimates used
may change as new events occur or additional information is
obtained. Actual results could differ from those
estimates.
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SOURCE Sensata Technologies Holding N.V.