ON SEMICONDUCTOR CORP
For the period ended Sep 27, 2024. Filed Oct 28, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2024 · Filed Oct 28, 2024
ON$63.31+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-28; filed 2024-07-29.
0001628280-24-033229
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-27; filed 2024-10-28.
0001628280-24-043880
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 108 current paragraphs.
58 unchanged; 42 reworded; 8 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
ISG gross profit decreased by $26.9 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased by 1.2 percentage points to 46.3% from 47.5%, primarily driven by unfavorable changes in product mix.
Current report
General and administrative expenses were $95.5 million for the quarter ended September 27, 2024, as compared to $110.7 million for the quarter ended September 29, 2023, representing a decrease of $15.2 million, or approximately 14%. The decrease was primarily attributable to a decrease in the bad debt provision with a strategic business partner, compared to the quarter ended September 29, 2023.
Current report
Nine Months Ended September 27, 2024 compared to the Nine Months Ended September 29, 2023
Current report
ISG gross profit decreased by $96.5 million, primarily driven by the decline in sales volume from existing products. ISG gross margin decreased 0.9 percentage points to 47.6% from 48.5%, primarily driven by unfavorable changes in product mix.
Current report
Interest Income
Current report
Interest income increased by $16.8 million, or approximately 25%, to $83.6 million during the nine months ended September 27, 2024 compared to $66.8 million during the nine months ended September 29, 2023, primarily due to higher interest rates and increased balances in interest-bearing accounts.
Current report
We recorded an income tax provision of $200.1 million and $302.7 million during the nine months ended September 27, 2024 and September 29, 2023, respectively, representing effective tax rates of 14.3% and 15.7%, respectively. The decrease in our effective tax rate is mainly due to return-to-provision adjustments reflecting additional tax benefits from Foreign Derived Intangible Income.
Current report
Our cash flows from operating activities were $1,326.7 million and $1,366.3 million for the nine months ended September 27, 2024 and September 29, 2023, respectively. The decrease of $39.6 million was primarily due to a reduction in net income driven by lower end-market demand for our products partially offset by the timing of cash receipts and payments related to working capital balances.
Removed paragraphs (6)
Previous report
ISG gross profit decreased by $41.9 million, primarily driven by a decline in existing business. ISG gross margin decreased by 2.8% to 44.9% from 47.7%, primarily driven by changes in product mix.
Previous report
Six Months Ended June 28, 2024 compared to the Six Months Ended June 30, 2023
Previous report
ISG gross profit decreased by $69.6 million, primarily driven by a decline in existing business. ISG gross margin decreased 0.6% to 48.3% from 48.9%, primarily driven by changes in product mix.
Previous report
General and administrative expenses were $180.3 million for the six months ended June 28, 2024, as compared to $163.1 million for the six months ended June 30, 2023, representing an increase of $17.2 million, or approximately 11%. The increase was primarily attributable to expenses associated with information technology initiatives and an adjustment to variable compensation during the quarter ended March 31, 2023.
Previous report
We recorded an income tax provision of $148.2 million and $188.1 million during the six months ended June 28, 2024 and June 30, 2023, respectively, representing effective tax rates of 15.8% and 15.3%, respectively.
Previous report
Our cash flows from operating activities were $860.9 million and $799.7 million for the six months ended June 28, 2024 and June 30, 2023, respectively. The increase of $61.2 million was primarily due to improved working capital management.
Reworded paragraphs (42)
Previous wording
We provide intelligent power and intelligent sensing solutions with a primary focus towards automotive and industrial markets to help our customers solve challenging problems and create cutting-edge products for a better future. Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings, industrial power, data centers and storage systems. Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency. Our intelligent sensing technologies support the next generation industry, allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.
Current wording
We provide intelligent power and intelligent sensing solutions with a primary focus towards automotive and industrial markets to help our customers solve challenging problems and create cutting-edge products for a better future. Our intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers efficient fast-charging systems and propels sustainable energy for the highest efficiency solar strings and industrial power. Our intelligent power solutions for the automotive industry allow our customers to exceed range targets with lower weight and reduce system cost through efficiency. We are utilizing our extensive range of power technologies to address the growing power demands of artificial intelligence and data centers. Our intelligent sensing technologies support the next generation industry, allowing for smarter factories and buildings while also enhancing the automotive mobility experience with imaging and depth sensing that make advanced vehicle safety and automated driving systems possible.
Previous wording
During the first quarter of 2024, we renamed our Advanced Solutions Group ("ASG") reportable segment to Analog and Mixed-Signal Group ("AMG") and reorganized the existing divisions within PSG and AMG. See Note 2: ''Revenue and Segment Information'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information regarding the segment reorganization. As of June 28, 2024, we were organized into the three operating and reportable segments of PSG, AMG and ISG.
Current wording
During the first quarter of 2024, we renamed our Advanced Solutions Group ("ASG") reportable segment to Analog and Mixed-Signal Group ("AMG") and reorganized the existing divisions within PSG and AMG. See Note 2: ''Segments and Revenue'' in the notes to the unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information regarding the segment reorganization. As of September 27, 2024, we were organized into the three operating and reportable segments of PSG, AMG and ISG.
Previous wording
Our primary focus continues to be on profitable revenue with stable gross margin and operating income by capturing high-growth megatrends in our focused end-markets of automotive and industrial infrastructure. We design products in highly-differentiated markets focused on customer needs while optimizing and right-sizing our manufacturing footprint to support growth and maintain gross margins through efficiencies and new product development. We are focused on achieving efficiencies in our operating and capital expenditures, capital allocation on research and development investments and resources to accelerate growth in high-margin products.
Current wording
Our primary focus continues to be on profitable revenue with stable gross margin by capturing high-growth megatrends in our focused end-markets of automotive and industrial infrastructure. We design products in highly-differentiated markets focused on customer needs while optimizing and right-sizing our manufacturing footprint to support growth and maintain gross margins through efficiencies and new product development. We are focused on achieving efficiencies in our operating and capital expenditures, capital allocation on research and development investments and resources to accelerate growth in high-margin products.
Previous wording
In an effort to streamline resources, drive organizational efficiencies, consolidate our global corporate footprint, and align with our "Fab Right" manufacturing strategy, we initiated the 2024 business realignment efforts during the second quarter of 2024. Under this business realignment, approximately 1,000 employees were notified of their employment termination and around 300 additional employees were reassigned or asked to relocate to another site. We incurred severance and other related charges of approximately $52.5 million and asset impairments and other charges of approximately $18.8 million. For additional information, see Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Current wording
In an effort to streamline resources, drive organizational efficiencies, consolidate our global corporate footprint, and align with our "Fab Right" manufacturing strategy, we initiated the 2024 business realignment efforts during the second quarter of 2024. Under this business realignment, approximately 1,100 employees were notified of their employment termination and around 200 additional employees were reassigned or asked to relocate to another site so far. During the nine months ended September 27, 2024, we incurred severance and other related charges of approximately $70.1 million and asset impairments and other charges of approximately $29.5 million. For additional information, see Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Previous wording
During the quarter ended June 28, 2024, we repurchased approximately 2.1 million shares of common stock for an aggregate purchase price of $150.1 million. During the first quarter of 2024, we had repurchased approximately 1.3 million shares of common stock for an aggregate purchase price of $100 million. For additional information, see Note 7: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Current wording
During the quarter ended September 27, 2024, we repurchased approximately 2.8 million shares of common stock for an aggregate purchase price of $200.4 million. For additional information, see Note 7: ''Earnings Per Share and Equity'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Previous wording
Revenue was $1,735.2 million and $2,094.4 million for the quarters ended June 28, 2024 and June 30, 2023, respectively, representing a decrease of $359.2 million, or approximately 17%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 12% and 11%of our total revenue for the quarters ended June 28, 2024 and June 30, 2023, respectively.
Current wording
Revenue was $1,761.9 million and $2,180.8 million for the quarters ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $418.9 million, or approximately 19%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 12% and 11%of our total revenue for the quarters ended September 27, 2024 and September 29, 2023, respectively.
Previous wording
Revenue from PSG decreased by $142.2 million, or approximately 15%, for the quarter ended June 28, 2024 compared to the quarter ended June 30, 2023. Revenue from our Multi-Market Power Division, Automotive Power Division and Industrial Power Division decreased by $68.8 million, $36.8 million and $36.7 million, respectively, primarily driven by a decrease in demand in the automotive, industrial and communications end-markets.
Current wording
Revenue from PSG decreased by $247.1 million, or approximately 23%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023. Revenue from our Automotive Power Division, Multi-Market Power Division and Industrial Power Division decreased by $129.7 million, $58.9 million and $58.5 million, respectively, primarily driven by a decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from AMG decreased by $144.1 million, or approximately 18%, for the quarter ended June 28, 2024 compared to the quarter ended June 30, 2023. Revenue from our Power Management Division, Sensor Interface Division and Integrated Circuit Division decreased by $80.5 million, $36.5 million and $27.2 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from AMG decreased by $122.0 million, or approximately 16%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023. Revenue from our Sensor Interface Division, Power Management Division and Integrated Circuit Division decreased by $65.4 million, $47.4 million and $9.2 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from ISG decreased by $72.9 million, or approximately 22%, for the quarter ended June 28, 2024 compared to the quarter ended June 30, 2023, largely driven by a decrease in revenue from our Automotive Sensing Division and Industrial and Consumer Solutions Division of $38.7 million and $34.2 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Current wording
Revenue from ISG decreased by $49.8 million, or approximately 15%, for the quarter ended September 27, 2024 compared to the quarter ended September 29, 2023, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $35.1 million and $14.7 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Previous wording
Gross profit decreased by $209.4 million to $784.0 million for the quarter ended June 28, 2024 compared to $993.4 million for the quarter ended June 30, 2023. This was primarily due to the decline in volume which negatively impacted gross profit by approximately $183 million and $47 million from existing products and new products, respectively, partially offset by approximately $20 million due to a reduction in the lower-margin foundry business at our EFK location.
Current wording
Gross profit decreased by $231.3 million, or approximately 22%, to $799.4 million for the quarter ended September 27, 2024 compared to $1,030.7 million for the quarter ended September 29, 2023. This was primarily due to the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $162 million and $77 million, respectively, partially offset by approximately $8 million due to a reduction in the lower-margin manufacturing services revenue at our EFK location.
Previous wording
Our gross margin decreased by approximately 2.2% to 45.2% for the quarter ended June 28, 2024 from 47.4% for the quarter ended June 30, 2023, primarily due to changes as explained in the segment gross margin sections below.
Current wording
Our gross margin decreased by approximately 1.9 percentage points to 45.4% for the quarter ended September 27, 2024 from 47.3% for the quarter ended September 29, 2023, primarily due to changes as explained in the segment gross margin sections below.
Previous wording
PSG gross profit decreased by $119.2 million, primarily driven by a decline in volume which negatively impacted gross profit by approximately $72 million and $47 million from existing products and new products, respectively. PSG gross margin decreased by 6.1% to 41.8% from 47.9% primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
Current wording
PSG gross profit decreased by $168.6 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $91 million and $77 million, respectively. PSG gross margin decreased by 6.1 percentage points to 41.6% from 47.7% primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
Previous wording
AMG gross profit decreased by $48.3 million, primarily driven by a decline in existing business which negatively impacted gross profit by approximately $69 million partially offset by improved gross profit of approximately $20 million due to the reduction in the lower-margin foundry business at our EFK location. AMG gross margin increased by 3.0% to 49.7% from 46.7%, primarily due to the reduction in the lower-margin foundry business.
Current wording
AMG gross profit decreased by $35.8 million, primarily driven by the decline in sales volume from existing products which negatively impacted gross profit by approximately $43 million, partially offset by improved gross profit of approximately $8 million due to the reduction in the lower-margin manufacturing services revenue at our EFK location. AMG gross margin increased by 3.2 percentage points to 49.8% from 46.6%, primarily due to the reduction in the lower-margin manufacturing services revenue at our EFK location and favorable changes in product mix.
Previous wording
Research and development expenses were $156.5 million for the quarter ended June 28, 2024, as compared to $145.3 million for the quarter ended June 30, 2023, representing an increase of $11.2 million, or approximately 8%. The increase was primarily attributable to an increase in payroll-related expenses and materials used in development activities, partially offset by a decrease in variable compensation.
Current wording
Research and development expenses were $151.0 million for the quarter ended September 27, 2024, as compared to $143.4 million for the quarter ended September 29, 2023, representing an increase of $7.6 million, or approximately 5%. The increase was primarily attributable to an increase in payroll-related expenses and production supplies.
Previous wording
Selling and marketing expenses were $68.6 million for the quarter ended June 28, 2024, as compared to $71.6 million for the quarter ended June 30, 2023, representing a decrease of $3.0 million, or approximately 4%. The decrease was primarily attributable to decreased variable compensation and commissions, partially offset by increased payroll-related costs.
Current wording
Selling and marketing expenses were $65.4 million for the quarter ended September 27, 2024, as compared to $68.2 million for the quarter ended September 29, 2023, representing a decrease of $2.8 million, or approximately 4%. The decrease was primarily attributable to a decrease in sales commissions.
Previous wording
Amortization of acquisition-related intangible assets was $12.9 million for the quarter ended June 28, 2024, as compared to $12.0 million for the quarter ended June 30, 2023, representing an increase of $0.9 million, or approximately 8%.
Current wording
Amortization of acquisition-related intangible assets was $13.0 million for the quarter ended September 27, 2024, as compared to $12.0 million for the quarter ended September 29, 2023, representing an increase of $1.0 million, or approximately 8%.
Previous wording
Restructuring, asset impairments and other, net was $72.5 million for the quarter ended June 28, 2024, as compared to $2.6 million for the quarter ended June 30, 2023. Charges incurred for quarter ended June 28, 2024 primarily relate to restructuring actions during the period. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Current wording
Restructuring, asset impairments and other, net was $29.1 million for the quarter ended September 27, 2024, as compared to $9.4 million for the quarter ended September 29, 2023. Charges incurred for the quarter ended September 27, 2024 primarily relate to restructuring actions during the period. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Previous wording
Interest expense decreased by $0.7 million to $15.7 million during the quarter ended June 28, 2024, as compared to $16.4 million during the quarter ended June 30, 2023. The decrease was primarily due to the maturity of the 1.625% notes in 2023. Our average gross long-term debt for the quarter ended June 28, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,507.1 million at a weighted-average interest rate of 1.9% for the quarter ended June 30, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Current wording
Interest expense decreased by $0.5 million to $15.7 million during the quarter ended September 27, 2024, as compared to $16.2 million during the quarter ended September 29, 2023. The decrease was primarily due to the maturity of the 1.625% Notes in 2023. Our average gross long-term debt for the quarter ended September 27, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,499.5 million at a weighted-average interest rate of 1.8% for the quarter ended September 29, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Previous wording
Interest income increased by $3.4 million, or approximately 14%, to $27.4 million during the quarter ended June 28, 2024 compared to $24.0 million during the quarter ended June 30, 2023, primarily due to an increase in interest rates along with a strategic shift in our investment strategy with higher balances in interest bearing accounts.
Current wording
Interest income increased by $2.9 million, or approximately 11%, to $28.6 million during the quarter ended September 27, 2024 compared to $25.7 million during the quarter ended September 29, 2023, primarily due to higher interest rates and increased balances in interest-bearing accounts.
Previous wording
During the quarter ended June 28, 2024, other income was $1.9 million compared to an expense of $1.3 million during the quarter ended June 30, 2023.
Current wording
During the quarter ended September 27, 2024, other income was $3.7 million compared to an expense of $1.1 million during the quarter ended September 29, 2023.
Previous wording
We recorded an income tax provision of $63.7 million and $104.4 million for the quarters ended June 28, 2024 and June 30, 2023, respectively, representing effective tax rates of 15.8% and 15.3%, respectively.
Current wording
We recorded an income tax provision of $51.9 million and $114.6 million for the quarters ended September 27, 2024 and September 29, 2023, respectively, representing effective tax rates of 11.4% and 16.4%, respectively. The decrease in our effective tax rate is mainly due to return-to-provision adjustments reflecting additional tax benefits from Foreign Derived Intangible Income.
Previous wording
Revenue was $3,597.9 million and $4,054.1 million for the six months ended June 28, 2024 and June 30, 2023, respectively, representing a decrease of $456.2 million, or approximately 11%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 11% and 10% of our total revenue for the six months ended June 28, 2024 and June 30, 2023, respectively.
Current wording
Revenue was $5,359.8 million and $6,234.9 million for the nine months ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $875.1 million, or approximately 14%, year over year. We had one customer, a distributor, whose revenue accounted for approximately 11% and 10% of our total revenue for the nine months ended September 27, 2024 and September 29, 2023, respectively.
Previous wording
Revenue from PSG decreased by $128.8 million, or approximately 7%, for the six months ended June 28, 2024 compared to the six months ended June 30, 2023. Revenue from our Multi-Market Power Division and Industrial Power Division decreased by $117.4 million and $57.2 million, respectively, primarily driven by a decrease in demand in the industrial and communications end-markets which was partially offset by an increase in revenue from our Automotive Power Division of $45.8 million.
Current wording
Revenue from PSG decreased by $376.0 million, or approximately 13%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023. Revenue from our Multi-Market Power Division, Industrial Power Division and Automotive Power Division decreased by $176.3 million, $115.8 million and $83.9 million, respectively, primarily driven by a decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from AMG decreased by $191.8 million, or approximately 12%, for the six months ended June 28, 2024 compared to the six months ended June 30, 2023. Revenue from our Power Management Division, Integrated Circuit Division and Sensor Interface Division decreased by $110.0 million, $69.4 million and $12.4 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Current wording
Revenue from AMG decreased by $313.8 million, or approximately 14%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023. Revenue from our Power Management Division, Integrated Circuit Division and Sensor Interface Division decreased by $157.3 million, $78.6 million and $77.9 million, respectively, primarily due to a decrease in demand in the automotive and industrial end-markets.
Previous wording
Revenue from ISG decreased by $135.6 million, or approximately 20%, for the six months ended June 28, 2024 compared to the six months ended June 30, 2023, largely driven by a decrease in revenue from our Automotive Sensing Division and Industrial and Consumer Solutions Division of $70.4 million and $65.2 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Current wording
Revenue from ISG decreased by $185.3 million, or approximately 18%, for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023, largely driven by a decrease in revenue from our Industrial and Consumer Solutions Division and Automotive Sensing Division of $100.3 million and $85.0 million, respectively, primarily due to the decrease in demand for these products in the automotive and industrial end-markets.
Previous wording
Gross profit was $1,637.6 million for the six months ended June 28, 2024 compared to $1,910.9 million for the six months ended June 30, 2023, representing a decrease of $273.3 million. This was primarily due to the decline in volume which negatively impacted gross profit by approximately $325 million, partially offset by approximately $54 million due to a reduction in the lower-margin foundry business at our EFK location.
Current wording
Gross profit was $2,437.0 million for the nine months ended September 27, 2024 compared to $2,941.6 million for the nine months ended September 29, 2023, representing a decrease of $504.6 million, or approximately 17%. This was primarily due to the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $487 million and $79 million, respectively, partially offset by approximately $62 million due to a reduction in the lower-margin manufacturing services revenue at our EFK location.
Previous wording
Our gross margin decreased by 1.6% to 45.5% for the six months ended June 28, 2024 from 47.1% for the six months ended June 30, 2023, primarily due to changes as explained in the segment gross margin sections below.
Current wording
Our gross margin decreased by 1.7 percentage points to 45.5% for the nine months ended September 27, 2024 from 47.2% for the nine months ended September 29, 2023, primarily due to changes as explained in the segment gross margin sections below.
Previous wording
Explanation for the increase or decrease in gross profit amounts and gross margin percentages for the six months ended June 28, 2024 compared to the six months ended June 30, 2023 is provided below:
Current wording
Explanation for the increase or decrease in gross profit amounts and gross margin percentages for the nine months ended September 27, 2024 compared to the nine months ended September 29, 2023 is provided below:
Previous wording
PSG gross profit decreased by $150.2 million, primarily driven by a decline in volume which negatively impacted gross profit by approximately $148 million. PSG gross margin decreased by 5.2% to 41.8% from 47.0%, primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
Current wording
PSG gross profit decreased by $318.8 million, primarily driven by the decline in sales volume from existing products and new products which negatively impacted gross profit by approximately $240 million and $79 million, respectively. PSG gross margin decreased by 5.6 percentage points to 41.7% from 47.3%, primarily as a result of the decline in volume, underutilization and the related impact of unfavorable product mix.
Previous wording
AMG gross profit decreased by $53.5 million, primarily driven by a decline in existing business which negatively impacted gross profit by approximately $108 million, partially offset by improved gross profit of approximately $54 million from the lower-margin foundry business at our EFK location. AMG gross margin increased by 2.6% to 49.1% from 46.5%, primarily due to the reduction in the lower-margin foundry business.
Current wording
AMG gross profit decreased by $89.3 million, primarily driven by the decline sales volume from existing products which negatively impacted gross profit by approximately $151 million, partially offset by improved gross profit of approximately $62 million from the lower-margin manufacturing services revenue at our EFK location. AMG gross margin increased by 2.8 percentage points to 49.3% from 46.5%, primarily due to the reduction in the lower-margin manufacturing services revenue at our EFK location.
Previous wording
Research and development expenses were $306.5 million for the six months ended June 28, 2024, as compared to $283.7 million for the six months ended June 30, 2023, representing an increase of $22.8 million, or approximately 8%. The increase was primarily attributable to increase in payroll-related expenses and materials used in development activities, partially offset by a decrease in variable compensation.
Current wording
Research and development expenses were $457.5 million for the nine months ended September 27, 2024, as compared to $427.1 million for the nine months ended September 29, 2023, representing an increase of $30.4 million, or approximately 7%. The increase was primarily attributable to an increase in payroll-related expenses and production supplies, partially offset by a decrease in variable compensation.
Previous wording
Selling and marketing expenses were $137.7 million for the six months ended June 28, 2024, as compared to $143.4 million for the six months ended June 30, 2023, representing a decrease of $5.7 million, or approximately 4%. The decrease was primarily attributable to decreased variable compensation and commissions, partially offset by increased payroll-related costs.
Current wording
Selling and marketing expenses were $203.1 million for the nine months ended September 27, 2024, as compared to $211.6 million for the nine months ended September 29, 2023, representing a decrease of $8.5 million, or approximately 4%. The decrease was primarily attributable to a decrease in sales commissions.
Previous wording
General and administrative expenses were $85.0 million for the quarter ended June 28, 2024, as compared to $87.2 million for the quarter ended June 30, 2023, representing a decrease of $2.2 million, or approximately 3%. The decrease was primarily attributable to decreased variable compensation, partially offset by an increase in expenses associated with information technology initiatives.
Current wording
General and administrative expenses were $275.8 million for the nine months ended September 27, 2024, as compared to $273.8 million for the nine months ended September 29, 2023, representing an increase of $2.0 million, or approximately 1%. The increase was primarily attributable to expenses associated with information technology initiatives, partially offset by a decrease in the bad debt provision with a strategic business partner and a decrease in variable compensation.
Previous wording
Amortization of acquisition-related intangible assets was $25.5 million and $27.0 million for the six months ended June 28, 2024 and June 30, 2023, respectively, representing a decrease of $1.5 million, or approximately 6%. The decrease was due to a reduction in amortization expense as certain intangible assets became fully amortized.
Current wording
Amortization of acquisition-related intangible assets was $38.5 million and $39.0 million for the nine months ended September 27, 2024 and September 29, 2023, respectively, representing a decrease of $0.5 million, or approximately 1%. The decrease was due to a reduction in amortization expense as certain intangible assets became fully amortized.
Previous wording
Restructuring, asset impairments and other, net was $73.9 million for the six months ended June 28, 2024, as compared to $54.1 million for the six months ended June 30, 2023, representing an increase of $19.8 million. Amounts incurred for the six months ended June 28, 2024 related primarily to the business realignment efforts in the second quarter of 2024. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Current wording
Restructuring, asset impairments and other, net was $103.0 million for the nine months ended September 27, 2024, as compared to $63.5 million for the nine months ended September 29, 2023, representing an increase of $39.5 million. Amounts incurred for the nine months ended September 27, 2024 related primarily to the business realignment efforts in the first nine months of 2024. See Note 4: ''Restructuring, Asset Impairments and Other Charges, Net'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Previous wording
Interest expense decreased by $11.5 million to $31.3 million during the six months ended June 28, 2024, as compared to $42.8 million during the six months ended June 30, 2023. The decrease was primarily due to higher variable-rate debt that was paid down and replaced by the 0.50% Notes in 2023. Our average gross long-term debt balance for the six months ended June 28, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,363.9 million at a weighted-average interest rate of 2.5% for the six months ended June 30, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Current wording
Interest expense decreased by $12.0 million to $47.0 million during the nine months ended September 27, 2024, as compared to $59.0 million during the nine months ended September 29, 2023. The decrease was primarily due to higher variable-rate debt that was paid down and replaced by the 0.50% Notes in 2023. Our average gross long-term debt balance for the nine months ended September 27, 2024 was $3,379.9 million at a weighted-average interest rate of 1.9%, as compared to $3,363.9 million at a weighted-average interest rate of 2.3% for the nine months ended September 29, 2023. The calculation of our weighted-average interest rates includes the effect of our interest rate swap agreements.
Previous wording
There was no loss on debt prepayment recognized for the six months ended June 28, 2024, as compared to $13.3 million for the six months ended June 30, 2023 due to the write-off relating to the partial repayment of the Term Loan "B" Facility in 2023. See Note 6: ''Long-Term Debt'' in the notes to our unaudited consolidated financial statements included elsewhere in this Form 10-Q for additional information.
Current wording
There was no loss on debt prepayment recognized for the nine months ended September 27, 2024, as compared to $13.3 million for the nine months ended September 29, 2023 due to the write-off relating to the partial repayment of the Term Loan "B" Facility in 2023.
Previous wording
Other income (expense) was an income of $2.9 million for the six months ended June 28, 2024 as compared to $3.4 million for the six months ended June 30, 2023.
Current wording
Other income (expense) was an income of $0.8 million for the nine months ended September 27, 2024 as compared to $4.5 million for the nine months ended September 29, 2023.
Previous wording
Our principal sources of liquidity are cash on hand, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources, including any amounts required to satisfy our current portion of long-term debt. Our cash and cash equivalents and short-term investments were approximately $2.7 billion as of June 28, 2024, and the Revolving Credit Facility has approximately $1.1 billion available for future borrowings.
Current wording
Our principal sources of liquidity are cash on hand, cash generated from operations, available borrowings under our Revolving Credit Facility as well as new debt and/or equity issuances. In the near term, we expect to fund our cash requirements by utilizing any or a combination of these principal sources, including any amounts required to satisfy our current portion of long-term debt. Our cash and cash equivalents and short-term investments were approximately $2.8 billion as of September 27, 2024, and the Revolving Credit Facility has approximately $1.1 billion available for future borrowings.
Previous wording
We require cash to: (i) fund our operating expenses, working capital requirements, outlays for strategic acquisitions and investments; (ii) service our debt, including principal and interest; (iii) incur capital expenditures; and (iv) repurchase our common stock. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected sales and demand. Our capital expenditures are primarily directed towards manufacturing equipment and can materially influence our available cash for other initiatives. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
Current wording
We require cash to: (i) fund our operating expenses, working capital requirements, outlays for strategic acquisitions and investments; (ii) service our debt, including principal and interest; (iii) incur capital expenditures; and (iv) repurchase our common stock. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected sales and demand. Our capital expenditures are primarily directed towards manufacturing equipment. Future capital expenditures may be impacted by events and transactions that are not currently forecasted.
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