SENSATA TECHNOLOGIES HOLDING PLC 
By January 30, 2013 7:02 AM ET
- Full year 2012 net revenue was $1,913.9 million, an increase of 4.8% from the full year 2011 net revenue of $1,826.9 million. - Full year 2012 net income was $177.5 million, or $0.98 per diluted share, versus full year 2011 net income of $6.5 million, or $0.04 per diluted share. - Full year 2012 Adjusted net income(1) was $356.6 million, or $1.96 per diluted share, versus full year 2011 Adjusted net income(1) of $355.5 million, or $1.96 per diluted share.
ALMELO, Netherlands, Jan. 30, 2013 /PRNewswire-FirstCall/ -- Sensata Technologies Holding N.V. (NYSE: ST) (the
"Company") announces results of its operations for the fourth quarter and full year ended December 31, 2012. (Logo: http://photos.prnewswire.com/prnh/20070227/CLTU192LOGO)
Highlights of the Fourth Quarter and Full Year Ended December 31, 2012
Net revenue for the fourth quarter 2012 was $445.4 million, a decrease of $(8.0) million, or (1.8%), from net revenue for the fourth quarter 2011 of $453.4 million. Net income for the fourth quarter 2012 wa$s70.9 million, or $0.39 per diluted share. This compares to net income for the fourth quarter 2011 of $24.4 million, or $0.13 per diluted share. Adjusted net incom1efor the fourth quarter 2012 was $85.3 million, or $0.47 per diluted share, which was 19.2% of net revenue. This compares to Adjusted net income1 for the fourth quarter 2011 of $82.0 million, or $0.45 per diluted share, which was 18.1% of net revenue. The Company also reported that it repurchased 0.5 million ordinary shares, at an average price of $29.75 per share, during the fourth quarter of 2012.
Net revenue for the full year ended December 31, 2012 was $1,913.9 million, an increase of $87.0 million, or 4.8%, from
$1,826.9 million for the full year ended December 31, 2011. Net income for the full year endedDecember 31, 2012 was $177.5 million, or $0.98 per diluted share. This compares to net income for the full year endedDecember 31, 2011 of $6.5 million, or
$0.04 per diluted share. Adjusted net incom1efor the full year ended December 31, 2012 was $356.6 million, or $1.96 per
diluted share, which was 18.6% of net revenue. This compares to Adjusted net incom1efor the full year ended December 31,
2011 of $355.5 million, or $1.96 per diluted share, which was 19.5% of net revenue.
"We are satisfied by the performance of the business during a challenging fourth quarter of 2012," said Martha Sullivan, President and Chief Executive Officer. "While our top line growth opportunities will continue to be challenged by nea-rterm economic weakness in 2013, our disciplined focus on margin improvement will result in higher earnings growth. We remain confident our long-term growth drivers are still intact."
The Company spent $28.3 million, or 6.4% of net revenue, in the fourth quarter of 2012 on research, development and engineering related costs. These costs reside in the Cost of revenue and the Research and development lines of the Condensed Consolidated Statements of Operations.
The Company recorded a benefit from income tax of $(63.9) million for the fourth quarter 2012. Approximately$3.7 million of the provision, or 3.3% of Adjusted EBIT, related to taxes that are payable in cash and approximately $(67.6) million related to deferred income tax benefit and other income tax expense. The deferred income tax benefit related primarily to the release of a valuation allowance associated with deferred tax assets in its subsidiaries in the Netherlands, including the deferred tax asset related to its net operating loss and other carryforwards.
The Company's ending cash balance at December 31, 2012 was $413.5 million. During thfeull year 2012, the Company generated cash of $397.3 million from operations, used cash of $62.5 million for investing activities, and used cash of $13.4 million for financing activities.
The Company's total indebtedness at December 31, 2012 was $1.82 billion. The Compansy'Net debt2 was $1.41 billion resulting in a Net leverage ratio2 of 2.7X.
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Segment Performance
For the three months ended December 31, | For the full year ended December 31, | ||
$ in 000s 2012 | 2011 | 2012 | 2011 |
Sensors net revenue $ 315,637 Sensors profit from operations $ 91,028 % of Sensors net revenue 28.8% Controls net revenue $ 129,719 Controls profit from operations $ 38,124 % of Controls net revenue 29.4% | $ 340,047 $ 96,938 28.5% $ 113,318 $ 31,829 28.1% | $ 1,375,170 $ 384,667 28.0% $ 538,740 $ 167,534 31.1% | $ 1,292,817 $ 389,926 30.2% $ 534,128 $ 175,771 32.9% |
Guidance
For the full year 2013, the Company anticipates net revenue of $1.93 to $2.03 billion which, at the midpoint, represents growth of
3.5% compared to the full year 2012 net revenue of $1.91 billion. The Company expects to achieve earnings per diluted share calculated in accordance with U.S. generally accepted accounting principles ("GAAP") of $1.03 to $1.22 for the full year 2013. In addition, the Company expects Adjusted net income1 of $365 to $400 million, or $2.00 to $2.20 per diluted share for the full year 2013. At the midpoint, this represents 7% growth compared to the full year 2012 Adjusted net incom1eof $356.6 million. This guidance assumes a diluted share count of 181.9 million for the full year 2013.
The Company anticipates net revenue of $450 million to $470 million for the first quarter 2013, which, at the midpoint, represents
a decline of (6.5%) compared to the first quarter 2012 net revenue of $492.0 million. The Company expects to achieve earnings per diluted share calculated in accordance with GAAP of $0.17 to $0.22 in the first quarter of 2013. In addition, the Company expects Adjusted net income1 of $78 million to $86 million, or $0.43 to $0.47 per diluted share, for the first quarter 2013. This guidance assumes a diluted share count of 181.9 million for the first quarter of 2013.
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.
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 fourth quarter and full year ended December 31, 2012. The U.S. dial in number is 87-7486-0682 and the non-U.S. dial in number is 706-634-
5536. The passcode is 89309169. A live webcast of the conference call will also be available on the investor relations page of the Company's website at http://investors.sensata.com.
For those unable to participate in the conference call, a replay will be available for one week following the call. To access the replay, the U.S. dial in number is 855-859-2056 and the non-U.S. dial in number is 404-537-3406. The replay passcode is
89309169. A replay of the call will be available by webcast for an extended period of time at 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 eleven 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.
Contact:
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Investors News Media Maggie Morris Linda Megathlin (508)236-1069 (508)236-1761
mmorris2@sensata.com lmegathlin@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 our future prospects, developments and business. Such forwar-dlooking statements include, among other things, the Company's anticipated results for the first quarter and full year of 2013 and any future actions relating to our share repurchase authorization. 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: worldwide economic conditions; adverse developments in the automotive industry; competitive pressures; pricing and other pressures from customers; fluctuations in foreign currency exchange, commodity and interest rates; governmental regulations, policies, and practices relating to the Company's non-US operations and international business; integration of acquired companies; litigation and disputes involving the Company, including the extent of product liability and warranty claims asserted against the Company; non-performance by suppliers; the loss of one or more suppliers of raw materials; and the Company's
ability to secure financing to operate and grow its business or to explore opportunities. 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 thSe EC website, www.sec.gov.
(In 000s, except per share amounts)
For the three months ended For the full year endedDecember 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 |
Net revenue $ 445,356 Operating costs and expenses: Cost of revenue 297,501 Research and development 12,923 Selling, general and administrative 31,700 Amortization of intangible assets and capitalized software 36,370 Restructuring and special charges 25,215 | $ 453,365 298,562 11,503 34,833 36,628 12,182 | $ 1,913,910 1,257,547 52,072 141,894 144,777 40,152 | $ 1,826,945 1,166,842 44,597 164,790 141,575 15,012 |
Total operating costs and expenses 403,709 | 393,708 | 1,636,442 | 1,532,816 |
Profit from operations 41,647 Interest expense (24,927) Interest income 146 Currency translation loss and other, net (9,820) | 59,657 (25,672) 77 (1,535) | 277,468 (100,037) 815 (5,581) | 294,129 (99,557) 813 (120,050) |
Income before taxes 7,046 (Benefit from) / provision for income taxes (63,895) | 32,527 8,148 | 172,665 (4,816) | 75,335 68,861 |
Net income per share:
Basic | $ 0.40 | $ 0.14 | $ 1.00 | $ 0.04 |
Diluted | $ 0.39 | $ 0.13 | $ 0.98 | $ 0.04 |
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Weighted-average ordinary shares outstanding:
Basic 177,908 176,356 177,473 175,307
Diluted 181,550 181,288 181,623 181,212
SENSATA TECHNOLOGIES HOLDING N.V. Condensed Consolidated Statements of Comprehensive Income(Unaudited)
($ in 000s)
For the three months ended For the full year endedDecember 31, 2012 | December 31, 2011 | December 31, 2012 | December 31, 2011 |
Net income $ 70,941 Other comprehensive (loss)/income, net of tax: Net unrealized (loss)/gain on derivative instruments designated and qualifying as cash flow hedges (197) Defined benefit and retiree healthcare plans (14,823) | $ 24,379 124 3,550 | $ 177,481 (1,668) (14,514) | $ 6,474 63 4,171 |
Other comprehensive (loss)/income (15,020) | 3,674 | (16,182) | 4,234 |
($ in 000s)
December 31, 2012 December 31, 2011Assets Current assets: Cash and cash equivalents | $ 413,539 | $ 92,127 |
Accounts receivable, net of allowances | 258,114 | 261,425 |
Inventories | 176,233 | 197,542 |
Deferred income tax assets | 12,271 | 9,989 |
Prepaid expenses and other current assets | 37,080 | 32,083 |
Total current assets | 897,237 | 593,166 |
Property, plant and equipment, net | 328,199 | 331,175 |
Goodwill | 1,754,107 | 1,746,821 |
Other intangible assets, net | 603,883 | 737,560 |
Deferred income tax assets | 37,671 | 4,086 |
Deferred financing costs | 22,119 | 26,477 |
Other assets | 6,432 | 17,366 |
Total assets | $ 3,649,648 | $ 3,456,651 |
Current liabilities:
Current portion of long-term debt, capital lease and other financing obligations | $ 12,878 | $ 13,741 |
Accounts payable | 155,675 | 155,346 |
Income taxes payable | 9,409 | 6,012 |
Accrued expenses and other current liabilities | 100,033 | 100,674 |
Deferred income tax liabilities | 3,125 | 3,479 |
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Total current liabilities | 281,120 | 279,252 |
Deferred income tax liabilities | 270,402 | 262,091 |
Pension and post-retirement benefit obligations | 32,747 | 22,287 |
Capital lease and other financing obligations, less current portion | 43,425 | 43,478 |
Long-term debt, net of discount, less current portion | 1,768,352 | 1,778,491 |
Other long-term liabilities | 31,308 | 26,101 |
Total liabilities | 2,427,354 | 2,411,700 |
Total shareholders' equity | 1,222,294 | 1,044,951 |
Total liabilities and shareholders' equity | $ 3,649,648 | $ 3,456,651 |
($ in 000s)
For the full year endedDecember 31, 2012 | December 31, 2011 |
Cash flows from operating activities: Net income $ 177,481 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 54,688 Amortization of deferred financing costs and original issue discounts 5,108 Currency translation loss on debt 433 Losses on repurchase or refinancing of debt 2,216 Share-based compensation 14,714 Amortization of inventory step-up to fair value 23 Amortization of intangible assets and capitalized software 144,777 (Gain)/loss on disposition of assets, net (214) Deferred income taxes (26,381) Other non-cash items 2,614 Increase/(decrease) from changes in operating assets and liabilities, net of effects of acquisitions 21,854 | $ 6,474 44,373 6,925 60,106 44,014 8,012 1,725 141,575 2,495 48,662 13,098 (71,592) |
Net cash provided by operating activities 397,313 Cash flows from investing activities: Acquisition of High Temperature Sensing, net of cash received - Acquisition of Magnetic Speed and Position, net of cash received - Other acquisitions, net of cash received (13,346) Additions to property, plant and equipment and capitalized software (54,786) Proceeds from sale of assets 5,631 | 305,867 (319,920) (145,331) - (89,807) 600 |
Net cash used in investing activities (62,501) Cash flows from financing activities: Proceeds from exercise of stock options and issuance of ordinary shares 16,520 Proceeds from revolving credit facility, net - Proceeds from issuance of debt - Payments on debt (13,349) Payments to repurchase ordinary shares (15,190) Payments of debt issuance costs (1,381) | (554,458) 20,091 - 1,794,500 (1,933,035) - (34,500) |
Net cash used in financing activities (13,400) | (152,944) |
Net change in cash and cash equivalents 321,412 Cash and cash equivalents, beginning of period 92,127 | (401,535) 493,662 |
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Net Revenue by Business, Geography and End Market
(% of total net revenue)
Three months ended December 31, Full year ended December 31,2012 | 2011 | 2012 | 2011 |
Sensors 70.9% Controls 29.1% | 75.0% 25.0% | 71.9% 28.1% | 70.8% 29.2% |
(% of total net revenue)
Three months ended December 31, Full year ended December 31,2012 | 2011 | 2012 | 2011 |
Americas 35.2% Europe 27.1% Asia 37.7% | 35.7% 31.7% 32.6% | 37.0% 28.6% 34.4% | 37.6% 29.2% 33.2% |
(% of total net revenue)
Three months ended December 31, Full year ended December 31,2012 | 2011 | 2012 | 2011 |
European automotive 22.6% North American automotive 16.0% Asian automotive 25.0% Rest of world automotive 0.8% Heavy vehicle off-road 7.1% Appliance and heating, ventilation and-acoirnditioning 9.0% Industrial 9.2% All other 10.3% | 28.2% 16.4% 22.1% 0.7% 7.0% 7.9% 8.8% 8.9% | 24.2% 16.6% 21.9% 0.8% 7.6% 9.9% 9.1% 9.9% | 25.2% 16.2% 20.3% 0.9% 6.8% 10.6% 10.2% 9.8% |
Non-GAAP Measures
Adjusted net income is a non-GAAP financial measure. The Company defines Adjusted net income as follows: net income before costs associated with debt refinancing and other financing activities, unrealized loss/(gain) on other hedges and loss on currency translation on debt, amortization of inventory step-up to fair value, amortization and depreciation expense related to the step-up in fair value of fixed and intangible assets, deferred income tax and other tax expense, amortization of deferred financing costs, restructuring and special charges, 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 and full year ended December 31, 2012 and 2011.
2012 | 2011 | 2012 | 2011 |
Net income $ 70,941 Debt refinancing costs and other financing transactions 2,916 Unrealized loss/(gain) on other hedges and loss on currency translation on debt, net 6,550 Amortization of inventory step-up to fair value 23 Amortization and depreciation expense related to the s-teup in fair value of fixed and intangible | $ 24,379 - 2,082 - | $ 177,481 2,916 (8,925) 23 | $ 6,474 44,014 91,033 1,725 |
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assets 37,060 Deferred income tax and other tax expense (67,553) Amortization of deferred financing costs 1,247 Restructuring and special charges 34,163 | 37,272 4,992 1,532 11,694 | 150,923 (22,868) 5,108 51,901 | 142,924 50,703 6,925 11,694 |
Total adjustments $ 14,406 | $ 57,572 | $ 179,078 | $ 349,018 |
Adjusted net income $ 85,347 | $ 81,951 | $ 356,559 | $ 355,492 |
Weighted average diluted shares outstanding used in Adjusted net income per diluted share calculation 181,550 | 181,288 | 181,623 | 181,212 |
Adjusted net income per diluted share $ 0.47 | $ 0.45 | $ 1.96 | $ 1.96 |
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. As the Company treats deferred income tax and other tax expense 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 each period presented. The theoretical current income tax associated with the reconciling items above would be as follows: Amortization and depreciation expense related to the ste-pup in fair value
of fixed and intangible assets: $0.3 million and $1.1 million for the three months and full year ended December 31, 2012, respectively; Restructuring and special charges: $4.0 million and $5.5 million for the three months and full year ended December
31, 2012, respectively. Amortization and depreciation expense related to the ste-pup in fair value of fixed and intangible assets:
$0.2 million and $0.6 million for the three months and full year ended December 31, 2011, respectively; Restructuring and special charges: $0.3 million for the three months and full year ended December 31, 2011.
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 and full year ended December 31, 2012 and
2011.
2012 | 2011 | 2012 | 2011 |
Cost of revenue $ 10,305 Selling, general and administrative 721 Amortization of intangible assets and capitalized software 35,971 Restructuring and special charges 24,949 Interest expense 1,247 Currency translation loss/(gain) and other, net 8,766 (Benefit from) / provision for income taxes (67,553) | $ 1,110 - 36,162 11,694 1,532 2,082 4,992 | $ 17,865 721 142,983 37,405 5,108 (1,818) (23,186) | $ 4,855 596 139,794 11,694 6,925 135,047 50,107 |
Total adjustments $ 14,406 | $ 57,572 | $ 179,078 | $ 349,018 |
The following unaudited table reconciles the Company's Projected GAAP earnings per diluted share to Projected Adjusted net income per diluted share for the first quarter ended March 31, 2013 and full year ended December 31, 2013. The amounts in the tables below have been calculated based on unrounded numbers. Accordingly, certain amounts may not add due to the effect of rounding.
Three months ended March 31, 2013 Full year ended December 31, 2013Low End | High End | Low End | High End |
Projected GAAP earnings per diluted share $ 0.17 Amortization and depreciation expense related to the s-teup in fair value of fixed and intangible assets 0.19 Deferred income tax and other tax expense 0.05 Amortization of deferred financing costs 0.01 Restructuring and special charges 0.01 | $ 0.22 0.19 0.05 0.01 0.01 | $ 1.03 0.75 0.20 0.03 - | $ 1.22 0.75 0.20 0.03 - |
Projected Adjusted net income per diluted share $ 0.43 | $ 0.47 | $ 2.00 | $ 2.20 |
Weighted average diluted shares outstanding used |
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in Adjusted net income per share calculation (in 000s) 181,900 | 181,900 | 181,900 | 181,900 |
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, 2011 and the interim condensed consolidated financial statements included in the Company's Form 10-Q for the period ended
September 30, 2012. 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. Certain reclassifications have been made to prior periods to conform to current period presentation.
SOURCE Sensata Technologies Holding N.V.
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