ON Semiconductor Corp. announced that total revenues in the fourth quarter of 2007 were $407.9 million, an increase of approximately 1% from the third quarter of 2007. Total revenues during the fourth quarter included approximately $385.1 million of product revenues and approximately $22.8 million of manufacturing services revenues.
During the fourth quarter of 2007, the company reported net income of $61.1 million, or $0.20 per share on a fully diluted basis. Fourth quarter 2007 non-GAAP net income was $68.7 million or $0.23 per share on a fully diluted basis. During the third quarter of 2007, the company reported net income of $63.8 million, or $0.20 per share on a fully diluted basis. Third quarter 2007 non-GAAP net income was $70.9 million, or $0.22 per share on a fully diluted basis.
On a mix-adjusted basis, average selling prices in the fourth quarter of 2007 were down approximately 1% from the third quarter of 2007. The company’s total gross margin in the fourth quarter was 37.3%, a decrease of approximately 130 basis points as compared to the third quarter of 2007. Gross margins for product revenue were 39.4% during the fourth quarter of 2007 compared to 40.7% during the third quarter of 2007. The majority of the gross margin decrease during the fourth quarter was due to product mix and increases in manufacturing costs.
EBITDA for the fourth quarter of 2007 was $95.5 million, which included an approximately $1.0 million charge from restructuring, asset impairments and other. EBITDA for the third quarter of 2007 was $95.5 million and included charges of approximately $2.0 million associated with restructuring, asset impairments and other.
Total revenues for 2007 were $1.566 billion, an increase of 2% from $1.532 billion in 2006. During 2007, the company reported net income of $242.2 million and non-GAAP net income of $265.8 million. During 2006, the company reported net income of $272.1 million and non-GAAP net income of $278.2 million. The company’s total gross margin decreased by approximately 80 basis points to 37.7% in 2007 from 38.5% in 2006. The primary reason for this decrease is attributable to the lower gross margin associated with manufacturing services in 2007 versus 2006. The company’s product gross margin increased by approximately 60 basis points to 40.4% in 2007 from 39.8% in 2006.
"2007 was another solid year of performance for many of our business segments," said Keith Jackson, ON Semiconductor President and CEO. "We saw 14% growth in our computing end-market as our power management integrated circuits were adopted by a number of leading computing OEMs. In December, we also completed our acquisition of the CPU Voltage and Thermal Products Group from Analog Devices, Inc. The acquisition expands our overall computing power management business and accelerates our notebook power management revenue growth. Our automotive end-market also had a record year with revenues growing by over 10% versus 2006 and representing our highest automotive end-market revenues since 2002. Our wireless and consumer electronics end-markets declined slightly in 2007 as two major customers in these end-markets significantly reduced their builds compared to 2006. In December, we also signed a definitive merger agreement to acquire AMI Holdings, Inc., parent company of AMI Semiconductor. We are excited to complete this transaction, with a target closing date in the first half of 2008. We believe this business complements our existing automotive and industrial businesses and adds new opportunities for ON Semiconductor in the medical and military/aerospace end-markets."
