Freescale Semiconductor Announces First Quarter 2010 Results

“All of our businesses grew both sequentially and year over year, and we continue to solidify our embedded processing leadership with design wins in our automotive, networking, consumer and industrial markets.”



Highlights for the first quarter include:



· Net sales of $1.02 billion;



· Trailing twelve month Adjusted EBITDA of $759 million;



· Cash and cash equivalents of $1.19 billion at April 2, 2010.





Net sales for the first quarter of 2010 were $1.02 billion, compared to $951 million in the fourth quarter of 2009 and $840 million in the first quarter last year.



The reported loss from operations for the three months ended April 2, 2010 was $61 million, compared to a loss of $261 million in the fourth quarter of 2009 and a loss of $351 million in the first quarter of 2009.



Adjusted operating earnings (defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release) for the three months ended April 2, 2010, were $95 million compared to earnings of $59 million in the fourth quarter of 2009 and a loss of $140 million in the first quarter of 2009.



Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA), (defined in Note 1 to the Notes to the Consolidated Financial Information attached to this press release) was $194 million for the first quarter of 2010, compared to $168 million in the fourth quarter of 2009 and a loss of $21 million in the first quarter of 2009.



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



Product Revenues



The company’s net sales figures for the first quarter of 2010 are as follows:



· Microcontroller net sales were $374 million in the first quarter of 2010, compared to $333 million in the fourth quarter of 2009 and $248 million in the first quarter of 2009.



· RF, Analog and Sensor net sales were $245 million in the first quarter of 2010, compared to $221 million in the fourth quarter of 2009 and $184 million in the first quarter of 2009.



· Networking and Multimedia net sales were $255 million in the first quarter of 2010, compared to $251 million in the fourth quarter of 2009 and $228 million in the first quarter of 2009.



· Cellular net sales were $121 million in the first quarter of 2010, compared to $116 million in the fourth quarter of 2009 and $95 million in the first quarter of 2009.



· Other net sales were $25 million in the first quarter of 2010 compared to $30 million in the fourth quarter of 2009 and $85 million in the first quarter of 2009.



Extinguishment and Modification of Long-term Debt



During February and April 2010, the company issued approximately $2.1 billion in senior secured notes and used the proceeds and an amend and extend transaction to extend over $4.4 billion of near term maturities out to 2016 and 2018.

Financial Position



Cash and cash equivalents were $1.19 billion on April 2, 2010, inclusive of bond repurchases, capital expenditures and costs associated with the company’s refinancing transaction completed in February 2010. Cash and cash equivalents were $1.36 billion on December 31, 2009.



Conference Call and Webcast



Freescale's quarterly earnings call is scheduled to begin at 4 p.m. Central Daylight Time on April 22, 2010. The company will offer a live webcast of the conference call over the Internet at www.freescale.com/investor.



Caution Regarding Forward Looking Statements



This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our business strategy, goals and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Some of the factors that we believe could affect our results include our substantial indebtedness; our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our business; the loss of one or more of our significant customers or strategic relationships; general economic and business conditions and any downturns in the cyclical industry in which we operate; our competitive environment and our ability to make technological advances; interruptions in our production or manufacturing capacity and our ability to obtain supplies; economic conditions in the industries in which our products are sold; maintenance and protection of our intellectual property; political and economic conditions in the countries where we conduct business; integration of future acquisitions into our business; the costs of environmental compliance and/or the imposition of liabilities under environmental laws and regulations; potential product liability claims; inability to make necessary capital expenditures; loss of key personnel; the financial viability of our customers, distributors or suppliers; and our ability to achieve cost savings as well as other matters described under Risk Factors in our Annual Report on Form 10-K and other filings with the SEC. We undertake no obligation to update any information contained in this press release.



Non-GAAP Financial Measures



Included within this press release and the accompanying tables and notes are non-GAAP financial measures that supplement the company's consolidated financial information prepared under GAAP. The company describes these non-GAAP financial measures and reconciles them to the most directly comparable GAAP measures in the tables and notes attached to this press release. The company's management believes that these non-GAAP measures provide a more meaningful representation of the company’s ongoing financial performance. In addition, the company uses Adjusted EBITDA to measure compliance with certain of its debt covenants. These non-GAAP measures are included solely for informational and comparative purposes and are not meant as a substitute for GAAP. You should consider them together with the consolidated financial information located in the tables attached to this press release.