Sensata Technologies Holding N.V. Announces First Quarter 2010 Results

Sensata Technologies Holding N.V. announced results of its operations for the first quarter 2010. First quarter 2010 net revenue was $377.1 million, an increase of $138.1 million, or 57.8%, from the first quarter 2009 net revenue of $239.0 million.

Tom Wroe, Chairman and Chief Executive Officer, said, "We had a very strong first quarter. We saw our fourth consecutive quarter of growth in net revenue and our second quarter of year over year growth. We had momentum coming into 2010 and we feel our first quarter results reflect this momentum." Wroe added, "The growth in our business during the first quarter compared to the first quarter of 2009 came from increased content in the applications we serve (13%), mature market growth (14%), emerging market opportunities (14%), inventory replenishment (16%), and the remainder in pricing, foreign exchange and other variables."

First quarter 2010 Adjusted Net Income was $69.2 million, or $0.44 per diluted share, which is 18.3% of net revenue, versus the first quarter 2009 Adjusted Net Income of $5.7 million, or $0.04 per diluted share, which is 2.4% of net revenue. First quarter 2010 net income was $27.3 million, or $0.17 per diluted share, versus a net loss of $10.2 million, or ($0.07) per diluted share, for the same period in 2009.

The company spent $20.5 million, or 5.4% of net revenue, on research, development and engineering related costs in the first quarter of 2010. These costs reside in both the cost of revenue and the research and development lines of our Statement of Operations and drive our future growth.

Quarter ending cash balance of $508.2 million is significantly higher than the fourth quarter 2009 ending cash balance of $148.5 million as a result of the net proceeds from our recent initial public offering and due to cash generated from operations during the quarter. The Company generated cash of $35.6 million from operations, used cash of $5.5 million in investing activities and generated cash of $329.6 million from financing activities.

The company’s cash conversion cycle, which is defined as days sales outstanding (DSO) plus days on hand inventory (DOH) less days payable outstanding (DPO), was 47.0 days at the end of the first quarter compared to 47.4 days at December 31, 2009.

The company recorded a tax provision of $11.2 million for the first quarter 2010. Of the $11.2 million, approximately $2.6 million, or 3.8% of Adjusted Net Income, relates to taxes that are payable in cash and the remaining tax provision relates primarily to deferred tax expense attributable to amortization of tax deductible goodwill.

The company’s indebtedness at March 31, 2010 was $2.1 billion, excluding capital leases. The Company’s net debt was $1.6 billion resulting in a leverage ratio of 4.2x. As of March 31, 2010, the company was in compliance with all of its financial ratios and reporting covenants included in its debt agreements related to its primary operating subsidiary, Sensata Technologies B.V.

Jeff Cote, Chief Financial Officer, said, "We continue to focus on our margin, cash management and capital structure. We will continue to see Adjusted Net Income margin expansion as the full impact of the reduction of debt resulting from the use of a portion of the IPO proceeds translates to a reduction of interest expense."