ON Semiconductor Corp. (Phoenix, AZ) announced that total product revenues in the first quarter of 2001 were $357.0 million, a decrease of 13 percent, compared to the first quarter of 2000, and a decrease of 24 percent from the fourth quarter of 2000. Excluding amortization of intangibles, restructuring charges and the cumulative effect of an accounting change, the company had a net loss of $12.7 million, or $0.07 per diluted share, in the first quarter of 2001. In comparison, the company had a net income of $10.9 million, or $0.03 per diluted share, in the first quarter of 2000. Including amortization of intangibles, restructuring charges and the cumulative effect of an accounting change, the company reported a net loss of $159.4 million, or $0.92 per diluted share, in the first quarter of 2001, compared to net income of $7.9 million, or $0.01 per diluted share, in the first quarter of 2000.
Effective January 1, 2001, ON Semiconductor changed its accounting method for recognizing revenue on shipments to distributors. On that date, the company began deferring revenues on shipments to distributors until products are resold to end users. The cumulative effect of this change in accounting method was a charge of $116.4 million in the first quarter.
As part of cost-reduction actions, the company also incurred restructuring charges of $38.0 million, or $26.8 million on an after-tax basis, in the first quarter of 2001. Overall gross margin was 24.0 percent in the first quarter of 2001, down 7.2 percentage points from the first quarter of 2000. Operating expenses were significantly reduced in the quarter, particularly general and administrative expenses, which were cut 37 percent from the fourth quarter 2000. Earnings before interest, taxes, depreciation and amortization, excluding minority interests and restructuring charges in the first quarter of 2001, were $43.5 million, compared to $92.1 million in the first quarter of 2000.
"Within this challenging business environment, we continue to stay focused on serving our customers, developing new products and executing on company-wide cost reductions. This continued drive to develop relationships, enrich our product portfolio and improve operational efficiency will strengthen our competitive position to better capitalize on a market upturn," said Steve Hanson, president and CEO. "We are also accelerating several of our supply-chain initiatives with the intent of getting closer to our customers. These efforts will help us to better manage the inventory situation during abrupt changes in the market."
For its second quarter outlook, the company anticipates approximately flat to slightly down sequential revenues, with slightly better gross and operating margins, as compared to the first quarter of 2001.