ENGLAND AND WALES | 001-34652 | 98-1386780 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of exchange on which registered |
Ordinary Shares - nominal value €0.01 per share | ST | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
SENSATA TECHNOLOGIES HOLDING PLC | ||||
/s/ Paul Vasington | ||||
Date: July 30, 2019 | Name: Paul Vasington | |||
Title: Executive Vice President and Chief Financial Officer |
• | Revenue was $883.7 million, a decrease of ($30.1) million, or (3.3%), compared to $913.9 million in the second quarter of 2018. |
• | Revenue declined 1.6% on an organic basis, which excludes the effects of the following: |
◦ | Foreign currency exchange rates - (1.0%) change versus the prior year period. |
◦ | Acquisitions and divestitures, net - (0.7%) change versus the prior year period. |
• | Operating income was $147.4 million (16.7% of revenue), a decrease of ($30.6) million or (17.2%) compared to $178.1 million (19.5% of revenue) in the second quarter of 2018. |
• | Adjusted operating income was $205.1 million (23.2% of revenue), a decrease of ($14.3) million or (6.5%) compared to $219.4 million (24.0% of revenue) in the second quarter of 2018. |
• | Earnings per share were $0.45, a decrease of (26.2%) compared to $0.61 per share in the second quarter of 2018. |
• | Adjusted earnings per share were $0.93, which were flat with adjusted earnings per share in the second quarter of 2018 despite a ($30.1) million decrease in revenue. |
• | Revenue was $1,754.2 million, a decrease of ($45.9) million, or (2.6%), compared to $1,800.2 million in the six months ended June 30, 2018. |
• | Revenue declined (0.4%) on an organic basis, which excludes the effects of the following: |
◦ | Foreign currency exchange rates - (1.2%) change versus the prior year period. |
◦ | Acquisitions and divestitures, net - (1.0%) change versus the prior year period. |
• | Operating income was $290.0 million (16.5% of revenue), a decrease of ($35.7) million or (11.0%) compared to $325.7 million, (18.1% of revenue), in the six months ended June 30, 2018. |
• | Adjusted operating income was $393.7 million (22.4% of revenue), a decrease of ($20.5) million or (5.0%) compared to $414.2 million (23.0% of revenue) in the six months ended June 30, 2018. |
• | Earnings per share were $0.97, a decrease of (14.2%) compared to $1.13 per share in the six months ended June 30, 2018. |
• | Adjusted earnings per share were $1.77, a decrease of (0.6%) compared to $1.78 per share in the six months ended June 30, 2018. |
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
$ in 000s | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Performance Sensing revenue | $ | 644,516 | $ | 676,217 | $ | 1,284,544 | $ | 1,339,046 | ||||||||
Performance Sensing operating income | 168,072 | 187,365 | 318,581 | 356,775 | ||||||||||||
% of Performance Sensing revenue | 26.1 | % | 27.7 | % | 24.8 | % | 26.6 | % | ||||||||
Sensing Solutions revenue | $ | 239,210 | $ | 237,643 | $ | 469,681 | $ | 461,107 | ||||||||
Sensing Solutions operating income | 77,115 | 79,070 | 152,084 | 150,954 | ||||||||||||
% of Sensing Solutions revenue | 32.2 | % | 33.3 | % | 32.4 | % | 32.7 | % |
SENSATA TECHNOLOGIES HOLDING PLC |
Condensed Consolidated Statements of Operations |
(In thousands, except per share amounts) |
(Unaudited) |
For the three months ended | For the six months ended | |||||||||||||||
June 30, 2019 | June 30, 2018 | June 30, 2019 | June 30, 2018 | |||||||||||||
Net revenue | $ | 883,726 | $ | 913,860 | $ | 1,754,225 | $ | 1,800,153 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of revenue | 575,235 | 582,509 | 1,156,041 | 1,164,966 | ||||||||||||
Research and development | 36,685 | 37,980 | 71,781 | 73,981 | ||||||||||||
Selling, general and administrative | 72,026 | 80,473 | 142,575 | 161,795 | ||||||||||||
Amortization of intangible assets | 36,031 | 34,594 | 72,174 | 69,663 | ||||||||||||
Restructuring and other charges, net | 16,310 | 244 | 21,619 | 4,010 | ||||||||||||
Total operating costs and expenses | 736,287 | 735,800 | 1,464,190 | 1,474,415 | ||||||||||||
Operating income | 147,439 | 178,060 | 290,035 | 325,738 | ||||||||||||
Interest expense, net | (39,608 | ) | (38,321 | ) | (78,861 | ) | (76,750 | ) | ||||||||
Other, net | (3,554 | ) | (11,053 | ) | (365 | ) | (15,686 | ) | ||||||||
Income before taxes | 104,277 | 128,686 | 210,809 | 233,302 | ||||||||||||
Provision for income taxes | 30,841 | 23,398 | 52,308 | 37,524 | ||||||||||||
Net income | $ | 73,436 | $ | 105,288 | $ | 158,501 | $ | 195,778 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.45 | $ | 0.61 | $ | 0.98 | $ | 1.14 | ||||||||
Diluted | $ | 0.45 | $ | 0.61 | $ | 0.97 | $ | 1.13 | ||||||||
Weighted-average ordinary shares outstanding: | ||||||||||||||||
Basic | 161,618 | 171,439 | 162,433 | 171,422 | ||||||||||||
Diluted | 162,478 | 172,693 | 163,500 | 172,775 |
SENSATA TECHNOLOGIES HOLDING PLC |
Condensed Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
June 30, 2019 | December 31, 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 721,073 | $ | 729,833 | ||||
Accounts receivable, net of allowances | 635,544 | 581,769 | ||||||
Inventories | 490,123 | 492,319 | ||||||
Prepaid expenses and other current assets | 122,839 | 113,234 | ||||||
Total current assets | 1,969,579 | 1,917,155 | ||||||
Property, plant and equipment, net | 809,092 | 787,178 | ||||||
Goodwill | 3,080,395 | 3,081,302 | ||||||
Other intangible assets, net | 826,144 | 897,191 | ||||||
Deferred income tax assets | 27,383 | 27,971 | ||||||
Other assets | 139,524 | 86,890 | ||||||
Total assets | $ | 6,852,117 | $ | 6,797,687 | ||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt, finance lease and other financing obligations | $ | 13,582 | $ | 14,561 | ||||
Accounts payable | 378,504 | 379,824 | ||||||
Income taxes payable | 25,188 | 27,429 | ||||||
Accrued expenses and other current liabilities | 211,870 | 218,130 | ||||||
Total current liabilities | 629,144 | 639,944 | ||||||
Deferred income tax liabilities | 238,992 | 225,694 | ||||||
Pension and other post-retirement benefit obligations | 33,652 | 33,958 | ||||||
Finance lease and other financing obligations, less current portion | 30,141 | 30,618 | ||||||
Long-term debt, net | 3,216,135 | 3,219,762 | ||||||
Other long-term liabilities | 86,990 | 39,277 | ||||||
Total liabilities | 4,235,054 | 4,189,253 | ||||||
Total shareholders’ equity | 2,617,063 | 2,608,434 | ||||||
Total liabilities and shareholders’ equity | $ | 6,852,117 | $ | 6,797,687 |
SENSATA TECHNOLOGIES HOLDING PLC |
Condensed Consolidated Statements of Cash Flows |
(In thousands) |
(Unaudited) |
For the six months ended | ||||||||
June 30, 2019 | June 30, 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 158,501 | $ | 195,778 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 55,182 | 53,445 | ||||||
Amortization of debt issuance costs | 3,718 | 3,643 | ||||||
Share-based compensation | 12,425 | 11,502 | ||||||
Loss on debt financing | — | 2,350 | ||||||
Amortization of intangible assets | 72,174 | 69,663 | ||||||
Deferred income taxes | 13,213 | 12,266 | ||||||
Unrealized loss on derivative instruments and other | 16,717 | 8,432 | ||||||
Changes in operating assets and liabilities | (79,764 | ) | (103,166 | ) | ||||
Net cash provided by operating activities | 252,166 | 253,913 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition, net of cash received | (1,681 | ) | — | |||||
Additions to property, plant and equipment and capitalized software | (81,549 | ) | (66,301 | ) | ||||
Other | 305 | 5,000 | ||||||
Net cash used in investing activities | (82,925 | ) | (61,301 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options and issuance of ordinary shares | 7,099 | 3,397 | ||||||
Payments of employee restricted stock tax withholdings | (6,778 | ) | (3,641 | ) | ||||
Payments on debt | (8,248 | ) | (12,404 | ) | ||||
Payments to repurchase ordinary shares | (168,198 | ) | (60,105 | ) | ||||
Payments of debt and equity issuance costs | (1,876 | ) | (9,568 | ) | ||||
Net cash used in financing activities | (178,001 | ) | (82,321 | ) | ||||
Net change in cash and cash equivalents | (8,760 | ) | 110,291 | |||||
Cash and cash equivalents, beginning of period | 729,833 | 753,089 | ||||||
Cash and cash equivalents, end of period | $ | 721,073 | $ | 863,380 |
(percent of total revenue) | Three months ended June 30, | Six months ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Performance Sensing | 72.9 | % | 74.0 | % | 73.2 | % | 74.4 | % | ||||
Sensing Solutions | 27.1 | % | 26.0 | % | 26.8 | % | 25.6 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(percent of total revenue) | Three months ended June 30, | Six months ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Americas | 43.0 | % | 41.5 | % | 43.1 | % | 41.7 | % | ||||
Europe | 28.8 | % | 29.8 | % | 29.1 | % | 30.1 | % | ||||
Asia/Rest of World | 28.2 | % | 28.7 | % | 27.8 | % | 28.2 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
(percent of total revenue) | Three months ended June 30, | Six months ended June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Automotive* | 57.6 | % | 59.7 | % | 57.7 | % | 60.5 | % | ||||
Heavy vehicle and off-road | 16.5 | % | 15.7 | % | 16.8 | % | 15.4 | % | ||||
Appliance and heating, ventilation and air-conditioning | 6.3 | % | 6.2 | % | 6.1 | % | 6.2 | % | ||||
Industrial | 10.8 | % | 9.5 | % | 10.7 | % | 9.4 | % | ||||
Aerospace | 5.1 | % | 4.4 | % | 5.0 | % | 4.6 | % | ||||
All other | 3.7 | % | 4.5 | % | 3.7 | % | 3.9 | % | ||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
* | Includes amounts reflected in the Sensing Solutions segment as follows: $10.7 million and $13.0 million of revenue in three months ended June 30, 2019 and 2018, respectively, and $22.1 million and $26.9 million of revenue in six months ended June 30, 2019 and 2018, respectively. |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||||||||||||||
Reported Growth | Organic Growth | End Market Growth | Reported Growth | Organic Growth | End Market Growth | ||||||||||||||
Automotive | (6.4 | %) | (1.1 | %) | (7.6 | %) | * | (6.8 | %) | (1.1 | %) | (6.8 | %) | * | |||||
Heavy vehicle and off-road | 1.8 | % | 1.0 | % | (1.8 | %) | 6.3 | % | 5.8 | % | 0.3 | % |
($ in thousands, except per share amounts) | Three Months Ended June 30, 2019 | ||||||||||||||||||
Operating Income | Operating Margin | Income Tax Expense | Net Income | Diluted EPS | |||||||||||||||
Reported (GAAP) | $ | 147,439 | 16.7 | % | $ | 30,841 | $ | 73,436 | $ | 0.45 | |||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Restructuring related and other | 21,313 | 2.4 | % | (400 | ) | 20,913 | 0.13 | ||||||||||||
Financing and other transaction costs | 1,642 | 0.2 | % | — | 2,450 | 0.02 | |||||||||||||
Step-up depreciation and amortization | 35,297 | 4.0 | % | — | 35,297 | 0.22 | |||||||||||||
Deferred gain on derivative instruments | (554 | ) | (0.1 | %) | — | (452 | ) | (0.00 | ) | ||||||||||
Amortization of debt issuance costs | — | — | % | — | 1,882 | 0.01 | |||||||||||||
Deferred taxes and other tax related | — | — | % | 16,846 | 16,846 | 0.10 | |||||||||||||
Total adjustments | 57,698 | 6.5 | % | 16,446 | 76,936 | 0.47 | |||||||||||||
Adjusted (non-GAAP) | $ | 205,137 | 23.2 | % | $ | 14,395 | $ | 150,372 | $ | 0.93 |
($ in thousands, except per share amounts) | Three Months Ended June 30, 2018 | ||||||||||||||||||
Operating Income | Operating Margin | Income Tax Expense | Net Income | Diluted EPS | |||||||||||||||
Reported (GAAP) | $ | 178,060 | 19.5 | % | $ | 23,398 | $ | 105,288 | $ | 0.61 | |||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Restructuring related and other | 2,339 | 0.3 | % | — | 2,339 | 0.01 | |||||||||||||
Financing and other transaction costs | 2,069 | 0.2 | % | — | 2,069 | 0.01 | |||||||||||||
Step-up depreciation and amortization | 35,881 | 3.9 | % | — | 35,881 | 0.21 | |||||||||||||
Deferred loss on derivative instruments | 1,057 | 0.1 | % | — | 3,137 | 0.02 | |||||||||||||
Amortization of debt issuance costs | — | — | % | — | 1,838 | 0.01 | |||||||||||||
Deferred taxes and other tax related | — | — | % | 10,250 | 10,250 | 0.06 | |||||||||||||
Total adjustments | 41,346 | 4.5 | % | 10,250 | 55,514 | 0.32 | |||||||||||||
Adjusted (non-GAAP) | $ | 219,406 | 24.0 | % | $ | 13,148 | $ | 160,802 | $ | 0.93 |
($ in thousands, except per share amounts) | Six Months Ended June 30, 2019 | ||||||||||||||||||
Operating Income | Operating Margin | Income Tax Expense | Net Income | Diluted EPS | |||||||||||||||
Reported (GAAP) | $ | 290,035 | 16.5 | % | $ | 52,308 | $ | 158,501 | $ | 0.97 | |||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Restructuring related and other | 29,359 | 1.7 | % | (800 | ) | 28,559 | 0.17 | ||||||||||||
Financing and other transaction costs | 4,596 | 0.3 | % | — | 5,404 | 0.03 | |||||||||||||
Step-up depreciation and amortization | 70,798 | 4.0 | % | — | 70,798 | 0.43 | |||||||||||||
Deferred gain on derivative instruments | (1,099 | ) | (0.1 | %) | — | (2,120 | ) | (0.01 | ) | ||||||||||
Amortization of debt issuance costs | — | — | % | — | 3,718 | 0.02 | |||||||||||||
Deferred taxes and other tax related | — | — | % | 24,799 | 24,799 | 0.15 | |||||||||||||
Total adjustments | 103,654 | 5.9 | % | 23,999 | 131,158 | 0.80 | |||||||||||||
Adjusted (non-GAAP) | $ | 393,689 | 22.4 | % | $ | 28,309 | $ | 289,659 | $ | 1.77 |
($ in thousands, except per share amounts) | Six Months Ended June 30, 2018 | ||||||||||||||||||
Operating Income | Operating Margin | Income Tax Expense | Net Income | Diluted EPS | |||||||||||||||
Reported (GAAP) | $ | 325,738 | 18.1 | % | $ | 37,524 | $ | 195,778 | $ | 1.13 | |||||||||
Non-GAAP adjustments: | |||||||||||||||||||
Restructuring related and other | 9,003 | 0.5 | % | — | 9,003 | 0.05 | |||||||||||||
Financing and other transaction costs | 5,409 | 0.3 | % | — | 7,759 | 0.04 | |||||||||||||
Step-up depreciation and amortization | 71,511 | 4.0 | % | — | 71,511 | 0.41 | |||||||||||||
Deferred loss on derivative instruments | 2,548 | 0.1 | % | — | 9,199 | 0.05 | |||||||||||||
Amortization of debt issuance costs | — | — | % | — | 3,643 | 0.02 | |||||||||||||
Deferred taxes and other tax related | — | — | % | 10,886 | 10,886 | 0.06 | |||||||||||||
Total adjustments | 88,471 | 4.9 | % | 10,886 | 112,001 | 0.65 | |||||||||||||
Adjusted (non-GAAP) | $ | 414,209 | 23.0 | % | $ | 26,638 | $ | 307,779 | $ | 1.78 |
($ in thousands) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Cost of revenue | $ | 4,536 | $ | 5,443 | $ | 9,312 | $ | 11,273 | ||||||||||
Selling, general and administrative | 2,468 | 2,455 | 3,950 | 6,688 | ||||||||||||||
Amortization of intangible assets | 34,384 | 32,946 | 68,773 | 66,361 | ||||||||||||||
Restructuring and other charges, net | 16,310 | 502 | 21,619 | 4,149 | ||||||||||||||
Operating income adjustments | 57,698 | 41,346 | 103,654 | 88,471 | ||||||||||||||
Interest expense, net | 1,882 | 1,838 | 3,718 | 3,643 | ||||||||||||||
Other, net | 910 | 2,080 | (213 | ) | 9,001 | |||||||||||||
Provision for income taxes | 16,446 | 10,250 | 23,999 | 10,886 | ||||||||||||||
Net income adjustments | $ | 76,936 | $ | 55,514 | $ | 131,158 | $ | 112,001 |
($ in thousands) | Three months ended June 30, | % Change | Six months ended June 30, | % Change | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Net cash provided by operating activities | $ | 139,473 | $ | 130,658 | 6.7 | % | $ | 252,166 | $ | 253,913 | (0.7 | %) | ||||||||||
Additions to property, plant and equipment and capitalized software | (39,859 | ) | (35,363 | ) | (12.7 | %) | (81,549 | ) | (66,301 | ) | (23.0 | %) | ||||||||||
Free cash flow | $ | 99,614 | $ | 95,295 | 4.5 | % | $ | 170,617 | $ | 187,612 | (9.1 | %) |
Three months ending September 30, 2019 | Full year ending December 31, 2019 | |||||||||||||||
Low End | High End | Low End | High End | |||||||||||||
Projected GAAP Earnings per diluted share | $ | 0.42 | $ | 0.43 | $ | 2.03 | $ | 2.07 | ||||||||
Restructuring related and other | 0.13 | 0.14 | 0.37 | 0.39 | ||||||||||||
Financing and other transaction costs | — | 0.01 | 0.04 | 0.05 | ||||||||||||
Deferred (gain)/loss on derivative instruments* | — | — | (0.02 | ) | (0.02 | ) | ||||||||||
Step-up depreciation and amortization | 0.22 | 0.22 | 0.86 | 0.86 | ||||||||||||
Deferred taxes and other tax related | 0.10 | 0.11 | 0.34 | 0.37 | ||||||||||||
Amortization of debt issuance costs | 0.01 | 0.01 | 0.05 | 0.05 | ||||||||||||
Projected adjusted EPS per diluted share | $ | 0.88 | $ | 0.92 | $ | 3.67 | $ | 3.77 | ||||||||
Weighted-average diluted shares outstanding (in 000s) | 161.4 | 161.4 | 162.3 | 162.3 |
Contacts: | ||
Investors: | Media: | |
Joshua Young | Alexia Taxiarchos | |
(508) 236-2196 | (508) 236-1761 | |
joshua.young@sensata.com | ataxiarchos@sensata.com |