Sensata Technologies B.V. Announces Third Quarter 2007 Results
- Third quarter net revenue grew by 24.4 percent to $357.4 million
from $287.3 million for the same period in 2006.
- Third quarter Adjusted EBITDA(1) grew by 20.9 percent to $90.2
million from $74.6 million for the same period in 2006.
ALMELO, Netherlands, Oct. 31 /PRNewswire-FirstCall/ -- Sensata
Technologies B.V. announces the results of its operations for the third quarter,
2007.
Highlights of the Third Quarter and Nine Months Ended September 30, 2007
Third quarter 2007 net revenue was $357.4 million, which represents an
increase of $70.2 million or 24.4 percent over the third quarter of 2006.
Adjusted EBITDA(1) was $90.2 million, an increase of $15.6 million or 20.9
percent over the third quarter of 2006 Adjusted EBITDA(1).
For the nine months ended September 30, 2007, net revenue was $1,031.0
million, an increase of 17.2 percent from $879.5 million for the same period in
2006. Adjusted EBITDA(1) increased to $264.2 million or 13.0 percent from $233.9
million in the same period 2006.
The quarter ending cash balance of $54.0 million was down from this year's
second quarter balance of $105.9 million, primarily due to the $89.7 million in
cash that was used in connection with the acquisition of Airpax Holdings Inc.
Tom Wroe, Chairman and Chief Executive Officer said, "We experienced
double-digit percentage growth in net revenue and Adjusted EBITDA for both the
third quarter and the nine months ended September 30, 2007. This was
accomplished mainly through the expansion of our core sensor base net revenue
and the execution of our acquisition strategy. The outlook for our overall
business remains positive through year end though we will continue to monitor
various trends in the global macroeconomic environment."
(1) See Non-GAAP Measures for discussion of EBITDA and Adjusted EBITDA,
including a reconciliation of these measures to GAAP Net (Loss) / Income
Recent Developments
On July 27, 2007, Sensata Technologies, Inc., the Company's principal U.S.
operating subsidiary, completed the acquisition of Airpax Holdings, Inc., a
leading manufacturer of components and systems for power protection, sensing and
controls applications. The purchase price was $277.5 million plus fees and
expenses and the transaction was closed using a combination of cash and new
borrowings. Approximately $195 million in a new senior subordinated term loan
was issued and the balance was funded with cash on hand.
Tom Wroe added, "We have successfully begun the integration of Airpax
Holdings, Inc. into Sensata. We now have a leading market position in our
Controls business segment for the higher-growth network power and critical,
high-reliability mobile power applications; markets where we did not previously
compete."
Company Earnings Conference Call
The Company will conduct a conference call on October 31, 2007 at 10:00am
(EDT) to discuss the financial results for its third quarter 2007. The U.S.
dial-in number is 1-888-599-4867 and the non-U.S. dial-in number is
1-913-312-0699. The conference code number is 6748135. For those unable to
participate in the conference call, a replay will be available for two weeks
beginning on October 31, 2007 at 1:00pm (EDT) thru November 14, 2007 at 11:59pm.
To access the replay, the U.S. dial-in number is 1-888-203-1112 and the non-U.S.
dial-in number is 1-719-457-0820. The replay passcode is 6748135. The replay
will also be available for one year on our website at http://www.sensata.com.
About Sensata Technologies B.V.
On April 27, 2006, Sensata Technologies B.V.("Sensata" or the
"Successor"), a company owned by an affiliate of Bain Capital Partners, LLC, a
leading global private investment firm, completed the acquisition of the Sensors
& Controls business of Texas Instruments Incorporated ("S&C" or the
"Predecessor").
Sensata is a leading designer and manufacturer of sensors and controls in
each of the key applications in which it competes. Sensata has business and
product development centers in Massachusetts, Maryland, Maine, the United
Kingdom, The Netherlands and Japan; and manufacturing operations in Brazil,
China, Korea, Malaysia, Mexico, and The Dominican Republic, as well as sales
offices around the world. Sensata currently employs approximately 9,500 people
worldwide.
The Company manufactures over 20,000 different products that are highly
engineered and application specific and ships over one billion units each year.
Safe Harbor Statement
This earnings release and our statements on our earnings calls contain
forward-looking statements, which may 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: our ability to operate as a stand-alone company,
including our ability to raise additional funds when needed; risks associated
with establishing and maintaining internal control over financial reporting in
compliance with Section 404 of the Sarbanes-Oxley Act of 2002; competition in
our markets; fundamental changes in the industries in which we operate,
including economic declines that impact the sales of any of the products
manufactured by our customers that use our sensors or controls; continued
pricing and other pressures from our customers; general economic, political,
business and market risks associated with our non-U.S. operations; fluctuations
in foreign currency exchange and interest rates; risks associated with our
substantial indebtedness, leverage and debt service obligations; our ability to
integrate acquired businesses, including Airpax Holdings, Inc., and our ability
to realize synergies related to our integration of acquisitions; our ability to
realize revenue or achieve anticipated gross operating margins from products
subject to existing purchase orders; fluctuations in the cost and/or
availability of manufactured components and raw materials; labor costs and
disputes; our dependence on third parties for certain transportation,
warehousing and logistics services; material disruptions at any of our
manufacturing facilities; our ability to develop and implement technology in our
product lines; litigation and disputes involving us, including the extent of
product liability and warranty claims asserted against us; our ability to
protect our intellectual property and know-how; our exposure to claims that our
products or processes infringe on the intellectual property rights of others;
the costs of compliance with various laws and regulations applicable to our
operations, including environmental, health and safety laws and export controls,
and responding to potential liabilities under these laws; non-performance by our
suppliers; our ability to attract and retain key personnel; and, the possibility
that our controlling shareholder's interests will conflict with ours or yours.
For a discussion of potential risks and uncertainties, please refer to the risk
factors listed in our SEC filings. Copies of our filings are available from our
Investor Relations department or from the SEC website, www.sec.gov.
Non-GAAP Measures
EBITDA and Adjusted EBITDA are non-GAAP measures of profitability. EBITDA
and Adjusted EBITDA are supplemental measures of our performance that are not
required by, or presented in accordance with, GAAP. They are not measurements of
our financial performance under GAAP and should not be considered as
alternatives to net income or any other performance measures derived in
accordance with GAAP or as alternatives to cash flow from operating activities
as measures of our liquidity. Adjusted EBITDA is a required measure in our bank
reporting. We define EBITDA as earnings before interest, taxes, depreciation and
amortization. We calculate Adjusted EBITDA by adjusting EBITDA to exclude
non-cash expenses, one-time charges associated with becoming a stand-alone
company and charges associated with becoming a public company ("transition
expenses"), and significant nonrecurring items. We believe Adjusted EBITDA
provides investors with helpful information with respect to our operations and
cash flows. We include it to provide additional information with respect to our
ability to meet our future debt service, capital expenditures and working
capital requirements. Our EBITDA and Adjusted EBITDA measures have limitations
as analytical tools, and you should not consider them in isolation, or as a
substitute for analysis of our results as reported under GAAP. Because of these
limitations, our EBITDA and Adjusted EBITDA measures should not be considered as
measures of discretionary cash available to us to invest in the growth of our
business or as measures of cash that will be available to us to meet our
obligations. You should compensate for these limitations by relying primarily on
our GAAP results and using these measures supplementally. See the tables below
which reconcile net (loss)/income to EBITDA and Adjusted EBITDA.
The following table reconciles Net (Loss)/Income to EBITDA and Adjusted
EBITDA for the third quarter 2007 and 2006.
($ in 000s)
Successor
Pro forma
Three Months Three Months Three Months
Ended Ended Ended
Sept 30 Sept 30 Sept 30
2007 2006 2006
Net (Loss)/Income $ (86,767) $ (41,890) $ (75,699)
Provision for income taxes 11,337 14,103 14,103
Interest expense, net 49,152 42,883 67,921
Depreciation & amortization 47,771 44,716 44,716
EBITDA 21,493 59,812 51,041
Acquisition and transition
expenses 8,705 5,503 5,503
Write-off of Inventory step-up 2,296 -- --
Currency translation losses on
debt 56,185 7,756 16,527
Stock compensation, management
fees and other 1,493 1,500 1,500
ADJUSTED EBITDA $ 90,172 $ 74,571 $ 74,571
-- The Pro-forma column eliminates the interest expense and the loss on
currency translation related to the Deferred Payment Certificates
(DPCs) as if they had never been issued. Please see Basis of
Presentation for additional information on the DPCs.
-- Adjusted EBITDA excludes transition expenses, and significant non-
recurring items as well as non-cash expenses from EBITDA.
-- Certain prior period amounts have been re-classified to allow
comparison to current year.
The following table reconciles Net (Loss)/Income to EBITDA and Adjusted
EBITDA for the nine months ended September 30, 2007 and 2006.
($ in 000s)
Successor Successor Predecessor
Pro-forma &
Combined Combined
Nine Months Nine Months Nine Months Period Period
Ended Ended Ended April 27- January 1-
Sept 30 Sept 30 Sept 30 Sept 30 April 26
2007 2006 2006 2006 2006
Net (Loss)/Income $ (172,311) $ (43,863) $ (101,884) $ (147,254) $ 45,370
Provision for
income taxes 41,471 50,357 50,357 24,561 25,796
Interest
expense, net 136,850 77,444 122,025 121,514 511
Depreciation &
amortization 138,565 78,998 78,998 69,389 9,609
EBITDA 144,575 162,936 149,496 68,210 81,286
Acquisition and
transition
expenses 28,991 22,412 22,412 9,029 13,383
Acquired in-
process
research and
development 5,700 -- -- -- --
Write-off of
inventory
step-up 4,454 24,571 24,571 24,571 --
Currency
translation
losses on debt 76,007 20,502 33,942 33,942 --
Stock compensation,
management fees
and other 4,502 3,487 3,487 2,417 1,070
ADJUSTED EBITDA $ 264,229 $ 233,908 $ 233,908 $ 138,169 $ 95,739
-- The accompanying financial information for the nine months ended
September 30, 2006 has been prepared on a combined basis as further
described in the accompanying Basis of Presentation. Although this
presentation does not comply with accounting principles generally
accepted in the U.S. (U.S. GAAP), we believe that it provides a
meaningful method of comparison to prior periods.
-- The Pro-forma column eliminates the interest expense and the loss on
currency translation related to the Deferred Payment Certificates
(DPCs) as if they had never been issued. Please see Basis of
Presentation for additional information on the DPCs.
-- Adjusted EBITDA excludes transition expenses, and significant non-
recurring items as well as non-cash expenses from EBITDA.
-- Certain prior period amounts have been re-classified to allow
comparison to current year.
SENSATA TECHNOLOGIES B.V. AND PREDECESSOR
Statement of Operations
(In thousands of U.S. Dollars)
(Unaudited)
Successor
Pro-forma
Three Months Three Months Three Months
Ended Ended Ended
Sept 30 Sept 30 Sept 30
2007 2006 2006
Net revenue $ 357,427 $ 287,251 $ 287,251
Operating costs and expenses:
Cost of revenue 242,973 190,753 190,753
Research and Development 11,786 7,535 7,535
Selling, general and
administrative 77,595 65,169 65,169
Total operating costs and
expenses 332,354 263,457 263,457
Profit from operations 25,073 23,794 23,794
Interest (expense)/income, net (49,152) (42,883) (67,921)
Currency translation (loss)/
gain and other (51,351) (8,698) (17,469)
(Loss)/income before taxes (75,430) (27,787) (61,596)
Provision for income taxes 11,337 14,103 14,103
Net (Loss)/income $ (86,767) $ (41,890) $ (75,699)
Adjusted EBITDA* $ 90,172 $ 74,571 $ 74,571
-- See accompanying basis of presentation and discussion of Non-GAAP
Measures
-- Certain prior period amounts have been re-classified to allow
comparison to current year.
SENSATA TECHNOLOGIES B.V. AND PREDECESSOR
Statement of Operations
(In thousands of U.S. Dollars)
(Unaudited)
Successor Successor Predecessor
Pro-forma &
Combined Combined
Nine Months Nine Months Nine Months Period Period
Ended Ended Ended April 27- January 1-
Sept 30 Sept 30 Sept 30 Sept 30, April 26,
2007 2006 2006 2006 2006
Net revenue $ 1,030,995 $ 879,542 $ 879,542 $ 503,942 $ 375,600
Operating costs
and expenses:
Cost of revenue 698,305 603,512 603,512 348,056 255,456
Research and
Development 31,843 22,260 22,260 13,458 8,802
Acquired in-
process
research and
development 5,700 -- -- -- --
Selling, general
and
administrative 219,260 149,059 149,059 109,279 39,780
Total operating
costs and expenses 955,108 774,831 774,831 470,793 304,038
Profit from
operations 75,887 104,711 104,711 33,149 71,562
Interest
(expense)/income,
net (136,850) (77,444) (122,025) (121,514) (511)
Currency
translation
(loss)/gain and
other (69,877) (20,773) (34,213) (34,328) 115
(Loss)/income
before taxes (130,840) 6,494 (51,527) (122,693) 71,166
Provision for
income taxes 41,471 50,357 50,357 24,561 25,796
Net (Loss)/income $ (172,311) $ (43,863) $ (101,884) $ (147,254) $ 45,370
Adjusted EBITDA* $ 264,229 $ 233,908 $ 233,908 $ 138,169 $ 95,739
-- See accompanying basis of presentation and discussion of Non-GAAP
Measures
-- Certain prior period amounts have been re-classified to allow
comparison to current year.
SENSATA TECHNOLOGIES B.V. AND PREDECESSOR
NOTES TO UNAUDITED Statement of Operations
Basis of Presentation
On April 27, 2006, Sensata Technologies B.V., a company owned by an
affiliate of Bain Capital Partners, LLC, a leading global private investment
firm, completed the acquisition of the Sensors & Controls business of Texas
Instruments Incorporated (the Sensata Acquisition). In connection with the
acquisition, a new accounting basis was established for the Company as of the
acquisition date. Financial information for the Predecessor and Successor
periods have been separated by a line on the face of the statement of operations
to highlight that the financial information for such periods have been prepared
under two different historical cost bases of accounting.
Deferred Payment Certificates (DPCs) issued in connection with the Sensata
acquisition were originally classified as debt on the Company's Balance Sheet.
On September 21, 2006, the DPCs were restructured to their original intended
classification as equity with an effective date of April 27, 2006. However, for
accounting purposes, the DPCs are classified as debt until the September 21 date
of the restructuring of the instrument. Effective September 21, 2006, the
principal amount of the DPCs ($768.3 million), related interest ($44.6 million),
and foreign exchange losses ($13.4 million) were capitalized into equity as
additional paid-in capital.
The pro forma and combined column on the Statement of Operations
eliminates the amounts through September 30, 2006 to reflect the results of
operations as if the DPCs were never issued.
The results for the three and nine months ended September 30, 2007, are
not necessarily indicative of a full year's results. US GAAP requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements. In addition, the combined financial information for the
nine months ended September 30, 2006 combines periods with different bases of
accounting. Actual results may vary materially from these estimates and
assumptions.
SOURCE Sensata Technologies B.V.