Sensata Technologies Provides Business Update Regarding COVID-19 and Withdraws Guidance
03 April 2020 - 7:43AM
Sensata Technologies (NYSE:ST), a global industrial technology
company and a leading provider of sensor-rich solutions that create
insights for customers, today announced a series of actions the
Company has taken in response to the coronavirus (COVID-19)
pandemic to ensure the health and safety of our employees, continue
to serve our critical customer needs and further enhance our
financial flexibility during a time of economic uncertainty and
market disruption.
As the COVID-19 pandemic has spread rapidly around the globe, it
has become increasingly difficult to quantify the impact on our
business as well as to provide a reliable forecast of our future
financial performance. Therefore, Sensata is withdrawing its
first quarter and full year 2020 guidance given on February 11.
Sensata currently expects revenue for the first quarter of fiscal
2020 to be in the range of $760 - $770 million. We will provide
more information on our first quarter 2020 earnings call.
“The COVID-19 health and economic crisis is an unprecedented
situation that warrants business and government response. During
this time, our top priority remains the health and safety of our
employees, customers and communities,” said Jeff Cote, President
and Chief Executive Officer of Sensata. “OEM orders and global
economic conditions have deteriorated over the last few weeks, and
in response we are taking necessary measures to ensure that we have
the financial strength to weather this period of uncertainty.
During this period we are prioritizing essential production for our
critical customer needs who in many cases are performing work
essential in this environment. We have managed through tough times
in the past; we are confident and focused on coming out of this
stronger.”
To protect the safety, health and well-being of our employees,
customers, suppliers, and communities Sensata continues to
implement preventative measures including increased frequency of
cleaning and disinfecting of facilities, social distancing, remote
working when possible, travel restrictions and limitations on
visitor access to our facilities.
Although we believe our financial position is strong, given the
increasing level of economic uncertainty, the Company has
further enhanced its financial flexibility by drawing down most of
its $420 million revolving credit facility. With these additional
funds, Sensata’s cash on hand as of April 1, 2020 is approximately
$1.2 billion. In addition, the Company is suspending temporarily
its share repurchase program.
Sensata is taking additional actions to manage and reduce
operating costs and further enhance its financial flexibility,
including the following:
- Cash retainers paid to non-employee directors will be cut by
50% during the 2nd quarter;
- Jeff Cote, CEO & President, will temporarily reduce his
salary to $1.00 during the 2nd quarter;
- Senior Leaders will temporarily reduce their salaries by 25%
during the 2nd quarter;
- Reduction in salaries and temporary furloughs for employees
during the 2nd quarter;
- Reduction in discretionary spend and capital expenditures and
managing working capital; and
- Ramping down of certain production facilities in line with
end-market demand.
We believe these measures, among other cost reductions being
considered at our locations around the world, will improve the
Company’s financial flexibility in light of the substantial impact
COVID-19 is having on the Company and the global economy.
The Company is continuing to closely monitor and adhere to the
safety guidelines provided by the World Health Organization and
Centers for Disease Control and Prevention, as well as all state,
national and country directives. Additionally, the Board of
Directors formed a Health & Economic Response Committee that is
overseeing the Company’s health and safety matters, and business
impact caused by the COVID-19 global crisis.
About Sensata Technologies
Sensata Technologies is a leading industrial technology company
that develops sensors, sensor-based solutions, including
controllers and software, and other mission-critical products to
create valuable business insights for customers and end users. For
more than 100 years, Sensata has provided a wide range of
customized, sensor-rich solutions that address complex engineering
requirements to help customers solve difficult challenges in the
automotive, heavy vehicle & off-road, industrial and aerospace
industries. With more than 22,000 employees and operations in 11
countries, Sensata’s solutions help to make products safer, cleaner
and more efficient, electrified, and connected. For more
information, please visit Sensata’s website at www.sensata.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding anticipated financial results
and liquidity. The words "will," "may," "designed to," "outlook,"
"believes," "should," "anticipates," "plans," "expects," "intends,"
"estimates," "forecasts" and similar expressions identify certain
of these forward-looking statements. The Company also may provide
forward-looking statements in oral statements or other written
materials released to the public. All statements contained or
incorporated in this press release or in any other public
statements that address operating performance, events or
developments that the Company expects or anticipates may occur in
the future are forward-looking statements. Factors that could cause
actual results to differ materially from these forward-looking
statements are discussed in the Company's Annual Report on Form
10-K for the year ended December 31, 2019, and its other Securities
and Exchange Commission filings. Future operating results will be
based on various factors, including actual industry production
volumes, the impact of COVID-19 on the Company’s business and the
global economy, commodity prices, the impact of restructuring
actions and the Company's success in implementing its operating
strategy. The forward-looking statements in this press release are
made as of the date hereof, and the Company does not assume any
obligation to update, amend or clarify them to reflect events, new
information or circumstances occurring after the date hereof.
Media
Contact: |
Investor
Contact: |
Alexia Taxiarchos |
Jacob Sayer |
Senior Director, Global Communications |
Vice President |
+1 (508) 236-1761 |
+1 (508) 236-1666 |
ataxiarchos@sensata.com |
jsayer@sensata.com |
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