Sensata Technologies Holding N.V. Announces First Quarter 2013 Results --First quarter 2013 net revenue was $470.4 million, an increase of 5.6% from the fourth quarter 2012, and a decrease of (4.4)% from the first quarter 2012.

--First quarter 2013 net income was $34.7 million, or $0.19 per diluted share, versus fourth quarter 2012 net income of $70.9 million, or $0.39 per diluted share, and first quarter 2012 net income of $38.9 million, or $0.21 per diluted share.

--First quarter 2013 Adjusted net income1 was $86.7 million, or $0.48 per diluted share, versus fourth quarter 2012 Adjusted net income1 of $85.3 million, or $0.47 per diluted share and first quarter 2012 Adjusted net income1 of $89.0 million, or $0.49 per diluted share.

ALMELO, Netherlands, April 23, 2013 /PRNewswire/ -- Sensata Technologies Holding N.V. (NYSE: ST) (the "Company") announces results of its operations for the first quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20070227/CLTU192LOGO )

Highlights of the First Quarter ended March 31, 2013

Net revenue for the first quarter 2013 was $470.4 million, an increase of $25.1 million, or 5.6%, from net revenue for the fourth quarter 2012 of $445.4 million, and a decrease of $(21.6) million, or (4.4)%, from net revenue for the first quarter 2012 of $492.0 million.

Net income for the first quarter 2013 was $34.7 million, or $0.19 per diluted share.  This compares to net income for the fourth quarter 2012 of $70.9 million, or $0.39 per diluted share, and net income of $38.9 million, or $0.21 per diluted share, for the first quarter of 2012.

Adjusted net income1 for the first quarter 2013 was $86.7 million, or $0.48 per diluted share, which was 18.4% of net revenue.  This compares to Adjusted net income1 for the fourth quarter 2012 of $85.3 million, or $0.47 per diluted share, which was 19.2% of net revenue and $89.0 million, or $0.49 per diluted share, for the first quarter 2012, which was 18.1% of net revenue.

"We are pleased with our results for the first quarter as we delivered Net revenue and Adjusted net income1 per diluted share at or above the high end of our guidance for the quarter," said Martha Sullivan, President and Chief Executive Officer.  "The global end markets continue to be dynamic and while there are a number of unknown risks that may impact our full year financial performance, we remain confident in our original financial guidance for 2013." 

The Company spent $29.6 million, or 6.3% of net revenue, on research, development and engineering related costs in the first quarter of 2013.  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, 2013 was $431.0 million.  During the first quarter, the Company generated cash of $84.8 million from operations, used cash of $13.3 million for investing activities and used cash of $54.1 million in financing activities. 

The Company recorded an income tax provision of $13.5 million for the first quarter 2013.  Approximately $5.9 million of the provision, or 5.1% of Adjusted EBIT, related to taxes that are payable in cash and approximately $7.7 million related to deferred income tax expense and other income tax expense.

The Company's total indebtedness at March 31, 2013 was $1.8 billion.  The Company's Net debt2 was $1.4 billion resulting in a Net leverage ratio2 of 2.7X. 

During the first quarter, the Company acquired 1.7 million shares under a previously announced share repurchase plan at an average price of $32.42

After the end of the quarter, Sensata Technologies B.V. issued $500 million in 4.875% fixed rate senior notes due 2023.  The proceeds from this offering, combined with $200 million in cash from the balance sheet, were used to repay $700 million of the Company's outstanding variable rate term loan, improving its long term capital structure.

Segment Performance



Three months ended

$ in 000s


March 31,
2013


March 31,
2012

Sensors net revenue


$

332,633



$

359,594


Sensors profit from operations


$

93,192



$

97,940


% of Sensors net revenue


28.0

%


27.2

%






Controls net revenue


$

137,780



$

132,414


Controls profit from operations


$

43,354



$

42,161


% of Controls net revenue


31.5

%


31.8

%

 

Guidance

The Company's net revenue and Adjusted net income1 per share guidance for the full year 2013 remain unchanged.  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 further expects Adjusted Net Income1 of $2.00 to $2.20 per diluted share, for the full year 2013.  At the midpoint, this represents 7.1% growth compared to the full year 2012 Adjusted net income1 per share of $1.96.  This guidance assumes a diluted share count of 179.4 million for the full year 2013.

The Company anticipates net revenue of $485 million to $505 million for the second quarter 2013, which, at the midpoint, is 5.2% higher than the first quarter 2013 net revenue of $470.4 million.  The Company also expects Adjusted net income1 of $0.50 to $0.54 per diluted share, for the second quarter 2013.  This guidance assumes a diluted share count of 178.6 million for the second quarter 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 first quarter ended March 31, 2013.  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 35014122.  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 35014122.  A replay of the call will also 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.

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 forward-looking statements include, among other things, the Company's anticipated results for the second quarter and full year of 2013.  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; governmental regulations, policies, and practices relating to the Company's non-US operations and international business; fluctuations in foreign currency exchange, commodity and interest rates; competitive pressures; pricing and other pressures from customers; adverse developments in the automotive industry; 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; fundamental changes in the industries in which the Company operates; 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 the SEC website, www.sec.gov.

 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Operations

(Unaudited)






(In 000s, except per share amounts)







For the three months ended



March 31, 2013


March 31, 2012

Net revenue


$

470,413



$

492,008


Operating costs and expenses:





Cost of revenue


308,682



325,248


Research and development


13,616



13,294


Selling, general and administrative


38,254



38,579


Amortization of intangible assets and capitalized 
               software


33,386



36,126


Restructuring and special charges


1,676



563


Total operating costs and expenses


395,614



413,810


Profit from operations


74,799



78,198


Interest expense


(24,135)



(25,215)


Interest income


148



241


Currency translation (loss)/gain and other, net


(2,601)



4,173


Income before taxes


48,211



57,397


Provision for income taxes


13,546



18,481


Net income


$

34,665



$

38,916







Net income per share:





Basic


$

0.19



$

0.22


Diluted


$

0.19



$

0.21







Weighted-average ordinary shares outstanding:





Basic


177,936



176,766


Diluted


181,522



181,505


 

 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)






($ in 000s)







For the three months ended



March 31, 2013


March 31, 2012

Net income


$

34,665



$

38,916


Other comprehensive income/(loss), net of tax:





Net unrealized gain/(loss) on derivative 
          instruments designated and qualifying as cash 
          flow hedges


8,607



(160)


Defined benefit and retiree healthcare plans


454



125


Other comprehensive income/(loss)


9,061



(35)


Comprehensive income


$

43,726



$

38,881


 

 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Balance Sheets

(Unaudited)






($ in 000s)







March 31,
2013


December 31, 2012

Assets





Current assets:





Cash and cash equivalents


$

431,025



$

413,539


Accounts receivable, net of allowances


287,348



258,114


Inventories


172,020



176,233


Deferred income tax assets


12,871



12,871


Prepaid expenses and other current assets


38,937



33,923


Total current assets


942,201



894,680


Property, plant and equipment, net


327,007



328,199


Goodwill


1,754,385



1,754,107


Other intangible assets, net


580,845



603,883


Deferred income tax assets


36,704



38,971


Deferred financing costs


21,073



22,119


Other assets


5,660



6,432


Total assets


$

3,667,875



$

3,648,391







Liabilities and shareholders' equity





Current liabilities:





Current portion of long-term debt, capital lease and other financing 
     obligations


$

212,867



$

12,878


Accounts payable


165,445



152,964


Income taxes payable


5,813



8,884


Accrued expenses and other current liabilities


107,929



100,112


Deferred income tax liabilities


3,525



3,525


Total current liabilities


495,579



278,363


Deferred income tax liabilities


279,679



271,902


Pension and post-retirement benefit obligations


26,561



32,747


Capital lease and other financing obligations, less current portion


51,073



43,425


Long-term debt, net of discount, less current portion


1,566,566



1,768,352


Other long-term liabilities


31,221



31,308


Total liabilities


2,450,679



2,426,097


Total shareholders' equity


1,217,196



1,222,294


Total liabilities and shareholders' equity


$

3,667,875



$

3,648,391


 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Cash Flows

(Unaudited)






($ in 000s)







For the three months
ended



March 31,
2013


March 31,
2012

Cash flows from operating activities:





Net income


$

34,665



$

38,916


Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation


13,044



14,844


Amortization of deferred financing costs and original 
               issue discounts


1,237



1,356


Currency translation (gain)/loss on debt


(77)



356


Share-based compensation


1,949



1,916


Amortization of intangible assets and capitalized 
               software


33,386



36,126


Loss/(gain) on disposition of assets


656



(723)


Deferred income taxes


7,147



13,232


Other non-cash items


2,157



(4,374)


(Decrease)/increase from changes in operating assets 
               and liabilities, net of effects of acquisitions


(9,342)



13,305


Net cash provided by operating activities


84,822



114,954







Cash flows from investing activities:





Additions to property, plant and equipment and capitalized software


(14,256)



(15,934)


Insurance proceeds


1,400




Proceeds from sale of assets




459


Acquisition payments


(411)




Net cash used in investing activities


(13,267)



(15,475)







Cash flows from financing activities:





Proceeds from exercise of stock options and issuance of ordinary shares


4,320



4,852


Payments on debt


(3,296)



(3,249)


Payments to repurchase ordinary shares


(55,093)




Payments of debt issuance costs




(103)


Net cash (used in)/provided by financing activities


(54,069)



1,500


Net change in cash and cash equivalents


17,486



100,979


Cash and cash equivalents, beginning of period


413,539



92,127


Cash and cash equivalents, end of period


$

431,025



$

193,106


Net Revenue by Business, Geography and End Market

 

(% of total net revenue)


Three months ended
March 31,




2013


2012

Sensors


70.7

%


73.1

%

Controls


29.3

%


26.9

%

Total


100.0

%


100.0

%

 

(% of total net revenue)


Three months ended
March 31,




2013


2012

Americas


37.4

%


36.8

%

Europe


29.8

%


31.0

%

Asia


32.8

%


32.2

%

Total


100.0

%


100.0

%

 

(% of total net revenue)


Three months ended
March 31,




2013


2012

European automotive


24.4

%


26.8

%

North American automotive


15.6

%


16.6

%

Asian automotive


20.4

%


20.4

%

Rest of world automotive


1.0

%


0.8

%

Heavy vehicle off-road


8.7

%


7.7

%

Appliance and heating, ventilation and air-conditioning


10.6

%


9.5

%

Industrial


9.0

%


8.3

%

All other


10.3

%


9.9

%

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 debt refinancing costs and other financing transactions, unrealized loss/(gain) on other hedges and loss/(gain) on currency translation on debt, net, 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 first quarter ended March 31, 2013 and 2012.

(In 000s, except per share amounts)


Three months ended

March 31,



2013


2012

Net income


$

34,665



$

38,916


Debt refinancing costs and other financing transactions


602




Unrealized loss/(gain) on other hedges and loss/(gain) on currency 
     translation on debt, net


3,229



(4,616)


Amortization and depreciation expense related to the step-up in fair 
     value of fixed and intangible assets


33,912



39,615


Deferred income tax and other tax expense


7,672



13,629


Amortization of deferred financing costs


1,237



1,356


Restructuring and special charges


5,382



81


Total adjustments


$

52,034



$

50,065


Adjusted net income


$

86,699



$

88,981


Weighted average diluted shares outstanding used in Adjusted net income per share calculation


181,522



181,505


Adjusted net income per share


$

0.48



$

0.49


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 step-up in fair value of fixed and intangible assets:  $0.3 million and $0.2 million for the three months ended March 31, 2013 and 2012, respectively; Restructuring and special charges:  $1.3 million and $0.0 million for the three months ended March 31, 2013 and 2012, 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 first quarter ended March 31, 2013 and 2012.

($ in 000s)


Three months ended

March 31,



2013


2012

Cost of revenue


$

4,275



$

3,944


Selling, general and administrative


602




Amortization of intangible assets and capitalized software


33,004



35,671


Restructuring and special charges


2,015



81


Interest expense


1,237



1,356


Currency translation loss/(gain) and other, net


3,229



(4,616)


Provision for income taxes


7,672



13,629


Total adjustments


$

52,034



$

50,065


The following unaudited table reconciles the Company's Projected GAAP earnings per share to Projected Adjusted net income per diluted share for the second quarter ended June 30, 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

June 30, 2013


Full year ended

December 31, 2013



Low End


High End


Low End


High End










Projected GAAP earnings per diluted share


$

0.19



$

0.23



$

0.93



$

1.12


Debt refinancing costs and other financing
          transactions


0.04



0.04



0.04



0.04


Unrealized loss/(gain) on other hedges and 
          loss/(gain) on currency translation on debt, 
          net






0.02



0.02


Amortization and depreciation expense related 
          to the step-up in fair value of fixed and 
          intangible assets


0.19



0.19



0.76



0.76


Deferred income tax and other tax expense


0.06



0.06



0.22



0.22


Amortization of deferred financing costs


0.01



0.01



0.03



0.03


Restructuring and special charges


0.01



0.01






Projected Adjusted net income per diluted share


$

0.50



$

0.54



$

2.00



$

2.20


Weighted average diluted shares outstanding used in Adjusted net income per share calculation (in 000s)


178,600



178,600



179,400



179,400


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, 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.  




Contact:






Investors


News Media

Jacob Sayer


Linda Megathlin

(508) 236-3800


(508) 236-1761

investors@sensata.com


lmegathlin@sensata.com

SOURCE Sensata Technologies Holding N.V.



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