'NXP delivered quarterly revenue of
Key Highlights for the Second Quarter 2022:
Revenue was
GAAP gross margin was 56.8 percent, and GAAP operating margin was 28.5 percent;
Non-GAAP gross margin was 57.8 percent, and non-GAAP operating margin was 36.0 percent;
Cash flow from operations was
On
On
On
On
On
On
On
Summary of Reported Second Quarter 2022 ($ millions, unaudited) (1)
Q2 2022 Q1 2022 Q2 2021 Q - Q Y - Y
Total Revenue$ 3,312 $ 3,136 $ 2,596 6% 28%
GAAP Gross Profit$ 1,882 $ 1,777 $ 1,422 6% 32%
Gross Profit Adjustments (i)$ (33 ) $ (30 ) $ (34 )
Non-GAAP Gross Profit$ 1,915 $ 1,807 $ 1,456 6% 32%
GAAP Gross Margin 56.8 % 56.7 % 54.8 %
Non-GAAP Gross Margin 57.8 % 57.6 % 56.1 %
GAAP Operating Income / (Loss)$ 943 $ 873 $ 573 8% 65%
Operating Income Adjustments (i)$ (250 ) $ (246 ) $ (257 )
Non-GAAP Operating Income$ 1,193 $ 1,119 $ 830 7% 44%
GAAP Operating Margin 28.5 % 27.8 % 22.1 %
Non-GAAP Operating Margin 36.0 % 35.7 % 32.0 %
Additional information
Q2 2022 Q1 2022 Q2 2021 Q - Q Y - Y
Automotive$ 1,713 $ 1,557 $ 1,262 10% 36%
Industrial & IoT$ 713 $ 682 $ 571 5% 25%
Mobile$ 388 $ 401 $ 347 -3% 12%
Comm. Infra. & Other$ 498 $ 496 $ 416 -% 20%
DIO 94 89 88
DPO 94 93 92
DSO 27 27 35
Cash Conversion Cycle 27 23 31
Channel Inventory (months) 1.6 1.5 1.6
Financial Leverage (ii) 1.5x 1.7x 1.9x
1. Additional Information for the Second Quarter 2022:
For an explanation of GAAP to non-GAAP adjustments, please see 'Non-GAAP Financial Measures'.
Financial leverage is defined as net debt divided by trailing twelve months adjusted EBITDA.
Net cash paid for income taxes related to on-going operations was
Weighted average number of diluted shares for the three-month period ended
Guidance for the Third Quarter 2022: ($ millions) (1)
GAAP Reconciliation non-GAAP
Low Mid High Low Mid High
Total Revenue$3,350 $3,425 $3,500 $3,350 $3,425 $3,500
Q-Q 1% 3% 6% 1% 3% 6%
Y-Y 17% 20% 22% 17% 20% 22%
Gross Profit$1,886 $1,943 $2,004 $(35) $1,921 $1,978 $2,039
Gross Margin 56.3% 56.7% 57.3% 57.3% 57.8% 58.3%
Operating Income (loss)$926 $973 $1,024 $(262) $1,188 $1,235 $1,286
Operating Margin 27.6% 28.4% 29.3% 35.5% 36.1% 36.7%
Financial Income (expense)$(98) $(98) $(98) $(3) $(95) $(95) $(95)
Note (1) Additional Information:
GAAP Gross Profit is expected to include Purchase Price Accounting ('PPA') effects,
GAAP Operating Income (loss) is expected to include PPA effects,
GAAP Financial Income (expense) is expected to include Other financial expense
Net cash paid for income taxes related to on-going operations is expected to be approximately
Non-controlling interest is expected to be approximately
Weighted average diluted share count is expected to be approximately 265 million.
NXP has based the guidance included in this release on judgments and estimates that management believes are reasonable given its assessment of historical trends and other information reasonably available as of the date of this release. Please note, the guidance included in this release consists of predictions only, and is subject to a wide range of known and unknown risks and uncertainties, many of which are beyond NXP's control. The guidance included in this release should not be regarded as representations by NXP that the estimated results will be achieved. Actual results may vary materially from the guidance we provide today. In relation to the use of non-GAAP financial information see the note regarding 'Non-GAAP Financial Measures' below. For the factors, risks, and uncertainties to which judgments, estimates and forward-looking statements generally are subject see the note regarding 'Forward-looking Statements.' We undertake no obligation to publicly update or revise any forward-looking statements, including the guidance set forth herein, to reflect future events or circumstances.
Non-GAAP Financial Measures
In managing NXP's business on a consolidated basis, management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures, that are not in accordance with, nor an alternative to,
These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in NXP's non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled 'Financial Reconciliation of GAAP to non-GAAP Results (unaudited).' Please refer to the NXP Historic Financial Model file found on the Financial Information page of the Investor Relations section of our website at https://investors.nxp.com for additional information related to our rationale for using these non-GAAP financial measures, as well as the impact of these measures on the presentation of NXP's operations.
In addition to providing financial information on a basis consistent with GAAP, NXP also provides the following selected financial measures on a non-GAAP basis: (i) Gross profit, (ii) Gross margin, (iii) Research and development, (iv) Selling, general and administrative, (v) Amortization of acquisition-related intangible assets, (vi) Other income, (vii) Operating income (loss), (viii) Operating margin, (ix) Financial Income (expense), (x) adjusted net income, adjusted EBITDA and trailing 12 month adjusted EBITDA, and (xi) free cash flow and free cash flow as a percent of Revenue. The non-GAAP information excludes the amortization of acquisition related intangible assets, the purchase accounting effect on inventory and property, plant and equipment, merger related costs (including integration costs), certain items related to divestitures, share-based compensation expense, restructuring and asset impairment charges, non-cash interest expense on convertible notes, extinguishment of debt, and foreign exchange gains and losses.
Conference Call and Webcast Information
The company will host a conference call with the financial community on
Interested parties may preregister to obtain a user-specific access code for the call here.
The call will be webcast and can be accessed from the NXP Investor Relations website at www.nxp.com. A replay of the call will be available on the NXP Investor Relations website within 24 hours of the actual call.
About
Forward-looking Statements
This document includes forward-looking statements which include statements regarding NXP's business strategy, financial condition, results of operations, the expected material weakness in our internal control over financial reporting, including the timeline to remediate the expected material weakness, market data, as well as any other statements which are not historical facts. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks and uncertainties include the following: market demand and semiconductor industry conditions; our ability to successfully introduce new technologies and products; the demand for the goods into which NXP's products are incorporated; potential impacts of the COVID-19 pandemic; trade disputes between the
For further information, please contact:
Investors: Media:
Jeff Palmer Jacey Zuniga
jeff.palmer@nxp.com jacey.zuniga@nxp.com
+1 408 518 5411 +1 512 895 7398
Table 1: Condensed consolidated statement of operations (unaudited)
($ in millions except share data) Three months ended
July 3, 2022 April 3, 2022 July 4, 2021
Revenue$ 3,312 $ 3,136 $ 2,596
Cost of revenue (1,430 ) (1,359 ) (1,174 )
Gross profit 1,882 1,777 1,422
Research and development (542 ) (518 ) (476 )
Selling, general and administrative (265 ) (251 ) (234 )
Amortization of acquisition-related intangible assets (134 ) (135 ) (139 )
Total operating expenses (941 ) (904 ) (849 )
Other income (expense) 2 - -
Operating income (loss) 943 873 573
Financial income (expense):
Extinguishment of debt (18 ) - -
Other financial income (expense) (110 ) (105 ) (100 )
Income (loss) before income taxes 815 768 473
Benefit (provision) for income taxes (129 ) (114 ) (65 )
Results relating to equity-accounted investees (3 ) 12 (2 )
Net income (loss) 683 666 406
Less: Net income (loss) attributable to non-controlling interests 13 9 9
Net income (loss) attributable to stockholders 670 657 397
Earnings per share data:
Net income (loss) per common share attributable to stockholders in $
Basic$ 2.55 $ 2.50 $ 1.46
Diluted$ 2.53 $ 2.48 $ 1.42
Weighted average number of shares of common stock outstanding during the period (in thousands):
Basic 262,579 263,089 272,686
Diluted 264,692 265,109 278,735
Table 2: Condensed consolidated balance sheet (unaudited)
($ in millions) As of
July 3, 2022 April 3, 2022 July 4, 2021
ASSETS
Current assets:
Cash and cash equivalents$ 3,545 $ 2,683 $ 2,910
Accounts receivable, net 996 925 991
Inventories, net 1,462 1,311 1,116
Other current assets 317 356 274
Total current assets 6,320 5,275 5,291
Non-current assets:
Other non-current assets 1,848 1,701 1,094
Property, plant and equipment, net 2,914 2,814 2,375
Identified intangible assets, net 1,527 1,577 1,891
Goodwill 9,930 9,954 9,971
Total non-current assets 16,219 16,046 15,331
Total assets 22,539 21,321 20,622
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable 1,462 1,369 1,167
Restructuring liabilities-current 12 16 36
Other current liabilities 1,467 1,460 1,133
Total current liabilities 2,941 2,845 2,336
Non-current liabilities:
Long-term debt 11,160 10,573 9,591
Restructuring liabilities 12 14 12
Deferred tax liabilities 41 53 90
Other non-current liabilities 1,159 1,076 924
Total non-current liabilities 12,372 11,716 10,617
Non-controlling interests 264 251 227
Stockholders' equity 6,962 6,509 7,442
Total equity 7,226 6,760 7,669
Total liabilities and equity 22,539 21,321 20,622
Table 3: Condensed consolidated statement of cash flows (unaudited)
($ in millions) Three months ended
July 3, 2022 April 3, 2022 July 4, 2021
Cash flows from operating activities:
Net income (loss)$ 683 $ 666 $ 406
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization 317 310 305
Stock-based compensation 89 89 93
Amortization of discount (premium) on debt, net - 1 1
Amortization of debt issuance costs 1 2 1
Net (gain) loss on sale of assets - (1 ) -
(Gain) loss on extinguishment of debt 18 - -
Results relating to equity-accounted investees 3 (12 ) 2
(Gain) loss on equity securities, net 8 (4 ) 5
Deferred tax expense (benefit) (65 ) (33 ) -
Changes in operating assets and liabilities:
(Increase) decrease in receivables and other current assets (50 ) (61 ) (135 )
(Increase) decrease in inventories (151 ) (122 ) (60 )
Increase (decrease) in accounts payable and other liabilities 4 266 73
(Increase) decrease in other non-current assets (41 ) (247 ) (52 )
Exchange differences (3 ) - 1
Other items 6 2 (4 )
Net cash provided by (used for) operating activities 819 856 636
Cash flows from investing activities:
Purchase of identified intangible assets (29 ) (43 ) (35 )
Capital expenditures on property, plant and equipment (268 ) (280 ) (150 )
Purchase of equipment leased to others - (5 ) -
Proceeds from the disposals of property, plant and equipment - 1 -
Purchase of interests in businesses, net of cash acquired (1 ) (4 ) (1 )
Purchase of investments (2 ) - (4 )
Proceeds from the sale of investments 12 - -
Proceeds from return of equity investments - 2 1
Net cash provided by (used for) investing activities (288 ) (329 ) (189 )
Cash flows from financing activities:
Repurchase of long-term debt (917 ) - -
Proceeds from the issuance of long-term debt 1,496 - 2,000
Cash paid for debt issuance costs (12 ) (1 ) (22 )
Dividends paid to common stockholders (222 ) (149 ) (155 )
Proceeds from issuance of common stock through stock plans - 28 -
Purchase of treasury shares and restricted stock unit withholdings (2 ) (552 ) (1,203 )
Other, net (1 ) - (1 )
Net cash provided by (used for) financing activities 342 (674 ) 619
Effect of changes in exchange rates on cash positions (11 ) - 2
Increase (decrease) in cash and cash equivalents 862 (147 ) 1,068
Cash and cash equivalents at beginning of period 2,683 2,830 1,842
Cash and cash equivalents at end of period 3,545 2,683 2,910
Net cash paid during the period for:
Interest 133 45 104
Income taxes, net of refunds 150 122 121
Non-cash investing activities:
Non-cash capital expenditures 243 246 167
Table 4: Financial Reconciliation of GAAP to non-GAAP Results (unaudited)
($ in millions) Three months ended
July 3, 2022 April 3, 2022 July 4, 2021
Revenue$ 3,312 $ 3,136 $ 2,596
GAAP Gross Profit$ 1,882 $ 1,777 $ 1,422
PPA Effects (14 ) (14 ) (18 )
Restructuring 3 - -
Stock Based Compensation (12 ) (11 ) (12 )
Other incidentals (10 ) (5 ) (4 )
Non-GAAP Gross Profit$ 1,915 $ 1,807 $ 1,456
GAAP Gross margin 56.8 % 56.7 % 54.8 %
Non-GAAP Gross margin 57.8 % 57.6 % 56.1 %
GAAP Research and development$ (542 ) $ (518 ) $ (476 )
Restructuring 1 1 (1 )
Stock based compensation (45 ) (44 ) (41 )
Other incidentals (3 ) (1 ) 1
Non-GAAP Research and development$ (495 ) $ (474 ) $ (435 )
GAAP Selling, general and administrative$ (265 ) $ (251 ) $ (234 )
PPA effects (1 ) (1 ) (2 )
Stock based compensation (32 ) (34 ) (40 )
Other incidentals (3 ) (2 ) (1 )
Non-GAAP Selling, general and administrative$ (229 ) $ (214 ) $ (191 )
GAAP amortization of acquisition-related intangible assets$ (134 ) $ (135 ) $ (139 )
PPA effects (134 ) (135 ) (139 )
Non-GAAP amortization of acquisition-related intangible assets $ - $ - $ -
GAAP Other income (expense)$ 2 $ - $ -
Non-GAAP Other income (expense)$ 2 $ - $ -
GAAP Operating income (loss)$ 943 $ 873 $ 573
PPA effects (149 ) (150 ) (159 )
Restructuring 4 1 (1 )
Stock based compensation (89 ) (89 ) (93 )
Other incidentals (16 ) (8 ) (4 )
Non-GAAP Operating income (loss)$ 1,193 $ 1,119 $ 830
GAAP Operating margin 28.5 % 27.8 % 22.1 %
Non-GAAP Operating margin 36.0 % 35.7 % 32.0 %
GAAP Financial income (expense)$ (128 ) $ (105 ) $ (100 )
Foreign exchange gain (loss) (2 ) (1 ) (1 )
Gain (loss) on extinguishment of long-term debt (18 ) - -
Other financial income (expense) (11 ) (1 ) (8 )
Non-GAAP Financial income (expense)$ (97 ) $ (103 ) $ (91 )
Table 5: Adjusted EBITDA and Free Cash Flow (unaudited)
($ in millions) Three months ended
July 3, 2022 April 3, 2022 July 4, 2021
Net income (loss)$ 683 $ 666 $ 406
Reconciling items to adjusted net income
Financial (income) expense 128 105 100
(Benefit) provision for income taxes 129 114 65
Depreciation 149 142 135
Amortization 168 168 170
Adjusted net income$ 1,257 $ 1,195 $ 876
Reconciling items to adjusted EBITDA
Results of equity-accounted investees 3 (12 ) 2
Restructuring (4 ) (1 ) 1
Stock based costs 89 89 93
Other incidental items 16 8 4
Adjusted EBITDA$ 1,361 $ 1,279 $ 976
Trailing twelve month adjusted EBITDA$ 4,961 $ 4,576 $ 3,546
($ in millions) Three months ended
July 3, 2022 April 3, 2022 July 4, 2021
Net cash provided by (used for) operating activities$ 819 $ 856 $ 636
Net capital expenditures on property, plant and equipment (268 ) (279 ) (150 )
Non-GAAP free cash flow$ 551 $ 577 $ 486
Trailing twelve month non-GAAP free cash flow$ 2,371 $ 2,306 $ 2,453
Trailing twelve month non-GAAP free cash flow as percent of Revenue 19 % 20 % 25 %
(C) 2022 Electronic News Publishing, source