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Sensata Technologies Holding N.V. Announces Fourth Quarter And Full Year 2012 Results

- 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.

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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 was $70.9 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 income1 for 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 ended December 31, 2012 was $177.5 million, or $0.98 per diluted share.  This compares to net income for the full year ended December 31, 2011 of $6.5 million, or $0.04 per diluted share.  Adjusted net income1 for 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 income1 for 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 near-term 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 the full 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 Company's Net debt2 was $1.41 billion resulting in a Net leverage ratio2 of 2.7X. 

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


$

340,047


$

1,375,170


$

1,292,817


Sensors profit from operations

$

91,028


$

96,938


$

384,667


$

389,926


% of Sensors net revenue

28.8%


28.5%


28.0%


30.2%







Controls net revenue

$

129,719


$

113,318


$

538,740


$

534,128


Controls profit from operations

$

38,124


$

31,829


$

167,534


$

175,771


% of Controls net revenue

29.4%


28.1%


31.1%


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 income1 of $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 877-486-0682 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:




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 forward-looking 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 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

For the full year ended







December 31,

2012

December 31,

2011

December 31,

2012

December 31,

2011

Net revenue

$

445,356


$

453,365


$

1,913,910


$

1,826,945


Operating costs and expenses:





Cost of revenue

297,501


298,562


1,257,547


1,166,842


Research and development

12,923


11,503


52,072


44,597


Selling, general and administrative

31,700


34,833


141,894


164,790


Amortization of intangible assets and

   capitalized software

36,370


36,628


144,777


141,575


Restructuring and special charges

25,215


12,182


40,152


15,012


Total operating costs and expenses

403,709


393,708


1,636,442


1,532,816


Profit from operations

41,647


59,657


277,468


294,129


Interest expense

(24,927)


(25,672)


(100,037)


(99,557)


Interest income

146


77


815


813


Currency translation loss and other, net

(9,820)


(1,535)


(5,581)


(120,050)


Income before taxes

7,046


32,527


172,665


75,335


(Benefit from) / provision for income taxes

(63,895)


8,148


(4,816)


68,861


Net income

$

70,941


$

24,379


$

177,481


$

6,474







Net income per share:





Basic

$

0.40


$

0.14


$

1.00


$

0.04


Diluted

$

0.39


$

0.13


$

0.98


$

0.04







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 ended







December 31,

2012

December 31,

2011

December 31,

2012

December 31,

2011

Net income

$

70,941


$

24,379


$

177,481


$

6,474


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





Net unrealized (loss)/gain on derivative

   instruments designated and qualifying

   as cash flow hedges

(197)


124


(1,668)


63


Defined benefit and retiree healthcare

   plans

(14,823)


3,550


(14,514)


4,171


Other comprehensive (loss)/income

(15,020)


3,674


(16,182)


4,234


Comprehensive income

$

55,921


$

28,053


$

161,299


$

10,708


 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Balance Sheets

(Unaudited)




($ in 000s)




December 31,

2012

December 31,

2011

Assets



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





Liabilities and shareholders' equity



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


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


 

SENSATA TECHNOLOGIES HOLDING N.V.

Condensed Consolidated Statements of Cash Flows

(Unaudited)




($ in 000s)




For the full year ended


December 31, 2012

December 31, 2011

Cash flows from operating activities:



Net income

$

177,481


$

6,474


Adjustments to reconcile net income to net cash provided by

   operating activities:



Depreciation

54,688


44,373


Amortization of deferred financing costs and original issue

   discounts

5,108


6,925


Currency translation loss on debt

433


60,106


Losses on repurchase or refinancing of debt

2,216


44,014


Share-based compensation

14,714


8,012


Amortization of inventory step-up to fair value

23


1,725


Amortization of intangible assets and capitalized software

144,777


141,575


(Gain)/loss on disposition of assets, net

(214)


2,495


Deferred income taxes

(26,381)


48,662


Other non-cash items

2,614


13,098


Increase/(decrease) from changes in operating assets and

   liabilities, net of effects of acquisitions

21,854


(71,592)


Net cash provided by operating activities

397,313


305,867





Cash flows from investing activities:



Acquisition of High Temperature Sensing, net of cash received


(319,920)


Acquisition of Magnetic Speed and Position, net of cash received


(145,331)


Other acquisitions, net of cash received

(13,346)



Additions to property, plant and equipment and capitalized

   software

(54,786)


(89,807)


Proceeds from sale of assets

5,631


600


Net cash used in investing activities

(62,501)


(554,458)





Cash flows from financing activities:



Proceeds from exercise of stock options and issuance of ordinary

   shares

16,520


20,091


Proceeds from revolving credit facility, net



Proceeds from issuance of debt


1,794,500


Payments on debt

(13,349)


(1,933,035)


Payments to repurchase ordinary shares

(15,190)



Payments of debt issuance costs

(1,381)


(34,500)


Net cash used in financing activities

(13,400)


(152,944)


Net change in cash and cash equivalents

321,412


(401,535)


Cash and cash equivalents, beginning of period

92,127


493,662


 Cash and cash equivalents, end of period

$

413,539


$

92,127


 

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%

75.0%

71.9%

70.8%

Controls

29.1%

25.0%

28.1%

29.2%

Total

100.0%

100.0%

100.0%

100.0%







(% of total net revenue)

Three months ended
December 31,

Full year ended
December 31,


2012

2011

2012

2011

Americas

35.2%

35.7%

37.0%

37.6%

Europe

27.1%

31.7%

28.6%

29.2%

Asia

37.7%

32.6%

34.4%

33.2%

Total

100.0%

100.0%

100.0%

100.0%







(% of total net revenue)

Three months ended
December 31,

Full year ended
December 31,


2012

2011

2012

2011

European automotive

22.6%

28.2%

24.2%

25.2%

North American automotive

16.0%

16.4%

16.6%

16.2%

Asian automotive

25.0%

22.1%

21.9%

20.3%

Rest of world automotive

0.8%

0.7%

0.8%

0.9%

Heavy vehicle off-road

7.1%

7.0%

7.6%

6.8%

Appliance and heating, ventilation

   and air-conditioning

9.0%

7.9%

9.9%

10.6%

Industrial

9.2%

8.8%

9.1%

10.2%

All other

10.3%

8.9%

9.9%

9.8%

Total

100.0%

100.0%

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 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.

(In 000s, except per share amounts)

Three months ended

December 31,

Full year ended

December 31,


2012

2011

2012

2011






Net income

$

70,941


$

24,379


$

177,481


$

6,474


Debt refinancing costs and other financing

   transactions

2,916



2,916


44,014


Unrealized loss/(gain) on other hedges and loss on

   currency translation on debt, net

6,550


2,082


(8,925)


91,033


Amortization of inventory step-up to fair value

23



23


1,725


Amortization and depreciation expense related to

   the step-up in fair value of fixed and intangible

   assets

37,060


37,272


150,923


142,924


Deferred income tax and other tax expense

(67,553)


4,992


(22,868)


50,703


Amortization of deferred financing costs

1,247


1,532


5,108


6,925


Restructuring and special charges

34,163


11,694


51,901


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 step-up 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 step-up 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.

($ in 000s)

Three months ended

December 31,

Full year ended

December 31,


2012

2011

2012

2011






Cost of revenue

$

10,305


$

1,110


$

17,865


$

4,855


Selling, general and administrative

721



721


596


Amortization of intangible assets and capitalized

   software

35,971


36,162


142,983


139,794


Restructuring and special charges

24,949


11,694


37,405


11,694


Interest expense

1,247


1,532


5,108


6,925


Currency translation loss/(gain) and other, net

8,766


2,082


(1,818)


135,047


(Benefit from) / provision for income taxes

(67,553)


4,992


(23,186)


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, 2013


Low End

High End

Low End

High End






Projected GAAP earnings per diluted share

$

0.17


$

0.22


$

1.03


$

1.22


Amortization and depreciation expense related

   to the step-up in fair value of fixed and

   intangible assets

0.19


0.19


0.75


0.75


Deferred income tax and other tax expense

0.05


0.05


0.20


0.20


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

$

0.43


$

0.47


$

2.00


$

2.20


Weighted average diluted shares outstanding used

in Adjusted net income per share calculation (in

000s)

181,900


181,900


181,900


181,900







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, 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.



RELATED LINKS
http://www.sensata.com

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