NEW YORK—When NXP Semiconductor went public two years ago, the company was debt-ridden with $4.5 billion on its books and faced with the arduous task of streamlining its product portfolio to emerge as a formidable competitor in the electronics industry.
Fast forward to today and, well, NXP’s net debt is still a hefty $3.1 billion. But president and chief executive Rick Clemmer believes NXP has the opportunity in “a matter of quarters, not years to be below two-times EBITDA [earnings before interest, taxes, depreciation and amortization],” which puts it in an investment-grade position from a metric viewpoint.
Although the credit rating agencies might not put NXP in that category, the company is on the right track. In the last 12 months, NXP reduced its debt by $900 million by generating cash while securing key design wins and selling off nonessential businesses.
In fact, NXP is working on one design win that’s worth nearly $1 billion in revenue over a three-year product life, Clemmer said in an interview here this week (July 25). Clemmer wouldn’t give any details about this potential customer. Still, it takes a number of those design wins to keep the engine running.
“We have company-specific design wins that will allow us to grow, even with a rather anemic economic environment,” Clemmer said.
NXP’s high-performance mixed-signal 2Q revenue breakdown by market
