Business Wire | Apr 27, 2021 06:00AM EDT

Sensata Technologies Reports First Quarter 2021 Financial Results

Apr. 27, 2021

SWINDON, England--(BUSINESS WIRE)--Apr. 27, 2021--Sensata Technologies (NYSE: ST), a global industrial technology company and leading provider of sensor-rich solutions that create insights for customers, today announced financial results for its first quarter ended March 31, 2021.

Operating results for the first quarter of 2021 compared to the first quarter of 2020 are summarized below. These results include non-GAAP financial measures, each of which is defined and reconciled to the most directly comparable GAAP measure later in this press release.

Revenue:

* Revenue was a record $942.5 million, an increase of $168.3 million, or 21.7%, compared to $774.3 million in the first quarter of 2020. * Revenue increased 18.8% from the first quarter of 2020 on an organic basis, which excludes a 2.9% increase from foreign currency exchange rates versus the prior-year period.

Operating income:

* Operating income was $157.5 million (16.7% of revenue), an increase of $98.9 million, or 168.7%, compared to operating income of $58.6 million (7.6% of revenue) in the first quarter of 2020. * Adjusted operating income was $198.1 million (21.0% of revenue), an increase of $61.4 million, or 44.9%, compared to adjusted operating income of $136.7 million (17.7% of revenue) in the first quarter of 2020.

Earnings per share:

* Earnings per share was $0.34, an increase of $0.29, or 580.0%, compared to earnings per share of $0.05 in the first quarter of 2020. * Adjusted earnings per share was $0.86, an increase of $0.33, or 62.3%, compared to adjusted earnings per share of $0.53 in the first quarter of 2020. * Changes in foreign currency exchange rates had minimal impact on Sensata's adjusted earnings per share in the first quarter of 2021 compared to the prior-year period.

"Sensata's record first quarter revenues reflect a continuation of strong growth associated with recovery across our automotive, heavy vehicle and industrial markets. Beyond more robust end markets, Sensata's growth significantly outpaced the automotive market by 910 basis points and the heavy vehicle market by 1,070 basis points during the quarter," said Jeff Cote, CEO and President of Sensata. "Despite widespread supply chain challenges, we are pleased with how effectively we are adapting to evolving conditions, clearly positioning Sensata to benefit from the overall business recovery."

Mr. Cote added, "We are continuing to execute well on our long-term growth strategy as evidenced by the recent acquisition of Xirgo Technologies in Smart & Connected and our new joint venture with Churod Electronics in Electrification, adding key medium-voltage electrical protection technologies to Sensata's extensive capabilities."

Sensata generated $104.5 million of operating cash flow in the first quarter of 2021, compared to $98.5 million in the prior-year period. The Company's free cash flow totaled $77.3 million in the first quarter of 2021 compared to $69.0 million in the prior-year period.

Segment Performance

For the three months ended March 31,

$ in 000s 2021 2020

Performance Sensing

Revenue $ 714,512 $ 568,689

Operating income* $ 195,844 $ 135,046

% of Performance Sensing revenue 27.4 % 23.7 %



Sensing Solutions

Revenue $ 228,016 $ 205,580

Operating income* $ 66,894 $ 56,529

% of Sensing Solutions revenue 29.3 % 27.5 %

*Includes adjustments for reclassification of Megatrend growth spend to corporate and other.

Guidance

"Sensata delivered strong financial performance in the first quarter, posting 19% organic revenue growth and 45% adjusted operating income growth from the prior-year period," said Paul Vasington, EVP and CFO of Sensata. "Accordingly, we are revising our full year financial guidance upward to reflect the recent acquisition of Xirgo Technologies, current market conditions, and Sensata's recent debt transactions. For full year 2021, we now expect revenue of $3,685 to $3,825 million and adjusted EPS of $3.20 to $3.50. For the second quarter of 2021, we expect revenue of $960 to $990 million and adjusted EPS of $0.84 to $0.90."

Includes adjustments for reclassification of Megatrend growth spend to* corporate and other.

Guidance

"Sensata delivered strong financial performance in the first quarter, posting 19% organic revenue growth and 45% adjusted operating income growth from the prior-year period," said Paul Vasington, EVP and CFO of Sensata. "Accordingly, we are revising our full year financial guidance upward to reflect the recent acquisition of Xirgo Technologies, current market conditions, and Sensata's recent debt transactions. For full year 2021, we now expect revenue of $3,685 to $3,825 million and adjusted EPS of $3.20 to $3.50. For the second quarter of 2021, we expect revenue of $960 to $990 million and adjusted EPS of $0.84 to $0.90."

Full Year 2021 Guidance

$ in millions, except EPS FY-21 Guidance FY-20 Y/Y Change

Revenue $3,685 - $3,825 $3,045.6 21% - 26%

organic growth 16% - 21%

Adjusted Operating Income $755 - $805 $562.1 34% - 43%

Adjusted Net Income $509 - $557 $349.2 46% - 60%

Adjusted EPS $3.20 - $3.50 $2.21 45% - 58%

Versus the prior-year period, Sensata expects that changes in foreign currency exchange rates will increase revenues by approximately $58 million at the midpoint and adjusted earnings per share by approximately $0.03 at the midpoint for the full year 2021.

Q2 2021 Guidance

$ in millions, except EPS Q2-21 Guidance Q2-20 Y/Y Change

Revenue $960 - $990 $576.5 67% - 72%

organic growth 58% - 63%

Adjusted Operating Income $195 - $205 $75.0 160% - 173%

Adjusted Net Income $134 - $144 $27.7 385% - 420%

Adjusted EPS $0.84 - $0.90 $0.18 367% - 400%

Versus the prior-year period, Sensata expects that changes in foreign currency exchange rates will increase revenues by approximately $23 million at the midpoint and adjusted earnings per share by approximately $0.01 at the midpoint for the second quarter of 2021.

Conference Call and Webcast

Sensata will conduct a conference call today at 8:00 AM eastern time to discuss its first quarter 2021 financial results and its outlook for the second quarter and full year 2021. The dial-in numbers for the call are 1-844-784-1726 or +1-412-380-7411. Callers should reference the "Sensata Q1 2021 Financial Results Conference Call." A live webcast and a replay of the conference call will also be available on the investor relations page of Sensata's website at http://investors.sensata.com. Additionally, a replay of the call will be available until May 4, 2021. To access the replay, dial 1-877-344-7529 or 1-412-317-0088 and enter confirmation code: 10154379.

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 19,000 employees and operations in 13 countries, Sensata's solutions help to make products safer, cleaner and more efficient, more electrified, and more connected. For more information, please visit Sensata's website at www.sensata.com.

Non-GAAP Financial Measures

We supplement the reporting of our financial information determined in accordance with U.S. generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures. We use these non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance, and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures is useful for period-over-period comparisons of underlying business trends and our ongoing business performance. We also believe presenting these non-GAAP measures provides additional transparency into how management evaluates the business.

Non-GAAP financial measures should be considered as supplemental in nature and are not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, our non-GAAP financial measures may not be the same as, or comparable to, similar non-GAAP measures presented by other companies.

The non-GAAP financial measures referenced by Sensata in this release include: adjusted net income, adjusted earnings per share ("EPS"), adjusted operating income, adjusted operating margin, free cash flow, organic revenue growth, market outgrowth, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), net debt, and net leverage ratio. We also refer to changes in certain non-GAAP measures, usually reported either as a percentage or number of basis points, between two periods and measured on either a reported, constant currency, or an organic basis, the latter of which excludes the net impact of acquisitions and divestitures for the 12-month period following the respective transaction date(s) and the effect of foreign currency exchange rate differences between the comparative periods. Such changes are also considered non-GAAP measures.

Adjusted net income is defined as net income, determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described in the accompanying reconciliation tables. Adjusted EPS is calculated by dividing adjusted net income by the number of diluted weighted-average ordinary shares outstanding in the period. We believe that these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Adjusted operating income is defined as operating income, determined in accordance with U.S. GAAP, excluding certain non-GAAP adjustments which are described in the accompanying reconciliation tables. Adjusted operating margin is calculated by dividing adjusted operating income by net revenue. We believe that these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Free cash flow is defined as net cash provided by operating activities, determined in accordance with U.S. GAAP, less additions to property, plant and equipment and capitalized software. We believe that this measure is useful to investors and management as a measure of cash generated by business operations that will be used to repay scheduled debt maturities and can be used to fund acquisitions, repurchase ordinary shares, or for the accelerated repayment of debt obligations.

Organic revenue growth is defined as the reported percentage change in net revenue calculated in accordance with U.S. GAAP, excluding the period-over-period impact of foreign exchange rate differences as well as the net impact of acquisitions and divestitures for the 12-month period following the respective transaction date(s). We believe that this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.

Adjusted EBITDA is defined as net income calculated in accordance with U.S. GAAP, excluding interest expense, net, provision for/(benefit from) income taxes, depreciation expense, amortization of intangible assets, and the following non-GAAP adjustments, if applicable: (1) restructuring related and other, (2) financing and transaction related, (3) deferred gain or loss on commodities and other derivative instruments, and (4) step-up inventory amortization.

Net debt is defined as total debt, finance lease, and other financing obligations less cash and cash equivalents. We believe net debt is a useful measure to management and investors in understanding trends in our overall financial condition.

Net leverage ratio is defined as net debt divided by last twelve months (LTM) adjusted EBITDA. We believe that the net leverage ratio is a useful measure to management and investors in understanding trends in our overall financial condition.

Safe Harbor Statement

This earnings release contains "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995, which relate to future events and are subject to risks and uncertainties. The forward-looking statements, which address the Company's expected business and financial performance and financial condition, among other matters, may contain words or phrases such as: "believe," "continue," "expect," "look ahead," "predict," or "will," and other words and phrases of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about expected earnings, revenues, growth, liquidity or other financial matters, together with any statements related in any way to the COVID-19 pandemic including its impact on the Company. Although the Company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, no assurance can be given that such expectations will prove to have been correct. A number of factors could cause actual results to differ materially from the projections, anticipated results, or other expectations expressed in this earnings release, including, without limitation, the following: future risks and existing uncertainties associated with the COVID-19 pandemic, which continues to have a significant adverse impact on our operations including, depending on the specific location, full or partial shutdowns of our facilities as mandated by government decree, government actions limiting our ability to adjust certain costs, significant travel restrictions, "work-from-home" orders, limited availability of our workforce, supplier constraints, supply chain interruptions, logistics challenges and limitations, and reduced demand from certain customers; uncertainties associated with a protracted economic slowdown that could negatively affect the financial condition of our customers and suppliers; uncertainties and volatility in the global capital markets; political, economic, military and other risks in countries outside of the United States; the impact of general economic conditions, geopolitical conditions and U.S. trade policies, legislation, trade disputes, treaties and tariffs, including those affecting China, on the Company's business operations; risks associated with the improper conduct by any of our employees, customers, suppliers, distributors or any other business partners which could impair our business reputation and financial results and could result in our non-compliance with anti-corruption laws and regulations of the U.S. government and various foreign jurisdictions; changes in exchange rates of the various currencies in which the Company conducts business; the Company's ability to obtain a consistent supply of materials, at stable pricing levels; changes in defense expenditures in the military market, including the impact of reductions or changes in the defense budgets of U.S. and foreign governments; the Company's ability to compete successfully on the basis of technology innovation, product quality and performance, price, customer service and delivery time; the Company's ability to continue to conceive, design, manufacture and market new products and upon continuing market acceptance of its existing and future product lines; difficulties and unanticipated expenses in connection with purchasing and integrating newly acquired businesses, including the potential for the impairment of goodwill and other intangible assets; events beyond the Company's control that could lead to an inability to meet its financial covenants under its credit arrangements; the Company's ability to access the capital markets on favorable terms, including as a result of significant deterioration of general economic or capital market conditions, or as a result of a downgrade in the Company's credit rating; changes in interest rates; governmental export and import controls that certain of our products may be subject to, including export licensing, customs regulations, economic sanctions or other laws; cybersecurity threats or incidents that could arise on our information technology systems that could disrupt business operations and adversely impact our reputation and operating results and potentially lead to litigation and/or governmental investigations; changes in fiscal and tax policies, audits and examinations by taxing authorities, laws, regulations and guidance in the United States and foreign jurisdictions; any difficulties in protecting the Company's intellectual property rights; and litigation, customer claims, product recalls, governmental investigations, criminal liability or environmental matters. In addition, the extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments such as the length and severity of the crisis, the potential resurgence of the crisis, future government actions in response to the crisis and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.

A further description of these uncertainties and other risks can be found in the Company's 2020 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and the Company's other reports filed with the SEC. Copies of our filings are available from our Investor Relations department or from the SEC website, www.sec.gov.

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

For the three months ended March 31,

2021 2020

Net revenue $ 942,528 $ 774,269

Operating costs and expenses:

Cost of revenue 635,349 566,406

Research and development 35,956 34,453

Selling, general and administrative 77,123 77,221

Amortization of intangible assets 32,064 33,092

Restructuring and other charges, net 4,582 4,498

Total operating costs and expenses 785,074 715,670

Operating income 157,454 58,599

Interest expense, net (44,043) (39,403)

Other, net (39,397) (12,281)

Income before taxes 74,014 6,915

Provision for/(benefit from) income taxes 20,281 (1,516)

Net income $ 53,733 $ 8,431



Net income per share:

Basic $ 0.34 $ 0.05

Diluted $ 0.34 $ 0.05



Weighted-average ordinary shares outstanding:

Basic 157,764 157,599

Diluted 159,230 158,385

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

March 31,2021

December 31, 2020

Assets

Current assets:

Cash and cash equivalents

$

1,893,926

$

1,861,980

Accounts receivable, net of allowances

641,161

576,647

Inventories

468,446

451,005

Prepaid expenses and other current assets

102,592

90,340

Total current assets

3,106,125

2,979,972

Property, plant and equipment, net

796,419

803,825

Goodwill

3,124,939

3,111,349

Other intangible assets, net

676,072

691,549

Deferred income tax assets

80,023

84,785

Other assets

161,614

172,722

Total assets

$

7,945,192

$

7,844,202

Liabilities and shareholders' equity

Current liabilities:

Current portion of long-term debt, finance lease and other financing obligations

$

9,678

$

757,205

Accounts payable

431,084

393,907

Income taxes payable

21,498

19,215

Accrued expenses and other current liabilities

311,261

324,830

Total current liabilities

773,521

1,495,157

Deferred income tax liabilities

262,673

259,857

Pension and other post-retirement benefit obligations

43,074

48,002

Finance lease and other financing obligations, less current portion

27,605

27,931

Long-term debt, net

3,961,397

3,213,747

Other long-term liabilities

86,279

94,022

Total liabilities

5,154,549

5,138,716

Total shareholders' equity

2,790,643

2,705,486

Total liabilities and shareholders' equity

$

7,945,192

$

7,844,202

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

March 31, December 31, 2021 2020

Assets

Current assets:

Cash and cash equivalents $ 1,893,926 $ 1,861,980

Accounts receivable, net of allowances 641,161 576,647

Inventories 468,446 451,005

Prepaid expenses and other current assets 102,592 90,340

Total current assets 3,106,125 2,979,972

Property, plant and equipment, net 796,419 803,825

Goodwill 3,124,939 3,111,349

Other intangible assets, net 676,072 691,549

Deferred income tax assets 80,023 84,785

Other assets 161,614 172,722

Total assets $ 7,945,192 $ 7,844,202



Liabilities and shareholders' equity

Current liabilities:

Current portion of long-term debt, finance $ 9,678 $ 757,205 lease and other financing obligations

Accounts payable 431,084 393,907

Income taxes payable 21,498 19,215

Accrued expenses and other current liabilities 311,261 324,830

Total current liabilities 773,521 1,495,157

Deferred income tax liabilities 262,673 259,857

Pension and other post-retirement benefit 43,074 48,002 obligations

Finance lease and other financing obligations, 27,605 27,931 less current portion

Long-term debt, net 3,961,397 3,213,747

Other long-term liabilities 86,279 94,022

Total liabilities 5,154,549 5,138,716

Total shareholders' equity 2,790,643 2,705,486

Total liabilities and shareholders' equity $ 7,945,192 $ 7,844,202

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

For the three months ended March 31,

2021

2020

Cash flows from operating activities:

Net income

$

53,733

$

8,431

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

31,197

34,679

Amortization of debt issuance costs

1,711

1,631

Share-based compensation

5,099

6,084

Loss on debt financing

30,066

-

Amortization of intangible assets

32,064

33,092

Deferred income taxes

130

(4,100)

Loss on litigation judgment

-

29,200

Unrealized loss on derivative instruments and other

8,797

11,040

Changes in operating assets and liabilities, net of effects of acquisitions

(58,286)

(21,513)

Net cash provided by operating activities

104,511

98,544

Cash flows from investing activities:

Acquisitions, net of cash received

(20,406)

-

Additions to property, plant and equipment and capitalized software

(27,172)

(29,547)

Investments in debt and equity securities

(1,799)

(5,217)

Other

340

1,928

Net cash used in investing activities

(49,037)

(32,836)

Cash flows from financing activities:

Proceeds from exercise of stock options and issuance of ordinary shares

10,556

709

Payments of employee restricted stock tax withholdings

(221)

(15)

Proceeds from borrowings on debt

750,000

-

Payments on debt

(752,753)

(2,375)

Payments to repurchase ordinary shares

-

(35,175)

Payments of debt financing costs

(31,110)

-

Net cash used in financing activities

(23,528)

(36,856)

Net change in cash and cash equivalents

31,946

28,852

Cash and cash equivalents, beginning of period

1,861,980

774,119

Cash and cash equivalents, end of period

$

1,893,926

$

802,971

Revenue by Business, Geography, and End Market (Unaudited)

SENSATA TECHNOLOGIES HOLDING PLC

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

For the three months ended March 31,

2021 2020

Cash flows from operating activities:

Net income $ 53,733 $ 8,431

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation 31,197 34,679

Amortization of debt issuance costs 1,711 1,631

Share-based compensation 5,099 6,084

Loss on debt financing 30,066 -

Amortization of intangible assets 32,064 33,092

Deferred income taxes 130 (4,100)

Loss on litigation judgment - 29,200

Unrealized loss on derivative instruments and 8,797 11,040 other

Changes in operating assets and liabilities, net (58,286) (21,513) of effects of acquisitions

Net cash provided by operating activities 104,511 98,544



Cash flows from investing activities:

Acquisitions, net of cash received (20,406) -

Additions to property, plant and equipment and (27,172) (29,547) capitalized software

Investments in debt and equity securities (1,799) (5,217)

Other 340 1,928

Net cash used in investing activities (49,037) (32,836)



Cash flows from financing activities:

Proceeds from exercise of stock options and 10,556 709 issuance of ordinary shares

Payments of employee restricted stock tax (221) (15) withholdings

Proceeds from borrowings on debt 750,000 -

Payments on debt (752,753) (2,375)

Payments to repurchase ordinary shares - (35,175)

Payments of debt financing costs (31,110) -

Net cash used in financing activities (23,528) (36,856)

Net change in cash and cash equivalents 31,946 28,852

Cash and cash equivalents, beginning of period 1,861,980 774,119

Cash and cash equivalents, end of period $ 1,893,926 $ 802,971

Revenue by Business, Geography, and End Market (Unaudited)

For the three(percent of total revenue) months ended March 31,

2021 2020

Performance Sensing 75.8 % 73.4 %

Sensing Solutions 24.2 % 26.6 %

Total 100.0 % 100.0 %

(percent of total revenue)

For the three months ended March 31,

2021

2020

Americas

36.5

%

43.9

%

Europe

28.3

%

29.4

%

Asia/Rest of World

35.2

%

26.7

%

Total

100.0

%

100.0

%

For the three(percent of total revenue) months ended March 31,

2021 2020

Americas 36.5 % 43.9 %

Europe 28.3 % 29.4 %

Asia/Rest of World 35.2 % 26.7 %

Total 100.0 % 100.0 %

(percent of total revenue)

For the three months ended March 31,

2021

2020

Automotive*

58.2

%

57.6

%

Heavy vehicle and off-road

18.9

%

16.9

%

Industrial

9.6

%

10.4

%

Appliance and heating, ventilation and air-conditioning

6.4

%

5.9

%

Aerospace

3.5

%

5.4

%

All other

3.4

%

3.8

%

Total

100.0

%

100.0

%

For the three(percent of total revenue) months ended March 31,

2021 2020

Automotive* 58.2 % 57.6 %

Heavy vehicle and off-road 18.9 % 16.9 %

Industrial 9.6 % 10.4 %

Appliance and heating, ventilation and air-conditioning 6.4 % 5.9 %

Aerospace 3.5 % 5.4 %

All other 3.4 % 3.8 %

Total 100.0 % 100.0 %

*Includes amounts reflected in the Sensing Solutions segment as follows: $11.5 million and $8.2 million of revenue in the three months ended March 31, 2021 and 2020, respectively.

Market Outgrowth (Unaudited)

Includes amounts reflected in the Sensing Solutions segment as follows:* $11.5 million and $8.2 million of revenue in the three months ended March 31, 2021 and 2020, respectively.

Market Outgrowth (Unaudited)

For the three months ended March 31, 2021

Reported Organic End Growth Growth Market Growth

Automotive 22.6 % 19.3 % 10.2 % *

Heavy vehicle and off-road 35.7 % 32.8 % 22.1 %

*Excludes Toyota, adjusted for Sensata's geographic mix.

GAAP to Non-GAAP Reconciliations

The following unaudited tables provide a reconciliation of the difference between each of the non-GAAP financial measures referenced herein and the most directly comparable U.S. GAAP financial measure. Amounts presented in these tables may not appear to recalculate due to the effect of rounding.

Operating income and margin, income tax, net income, and EPS

* Excludes Toyota, adjusted for Sensata's geographic mix.

GAAP to Non-GAAP Reconciliations

The following unaudited tables provide a reconciliation of the difference between each of the non-GAAP financial measures referenced herein and the most directly comparable U.S. GAAP financial measure. Amounts presented in these tables may not appear to recalculate due to the effect of rounding.

Operating income and margin, income tax, net income, and EPS

($ in thousands,except per share For the three months ended March 31, 2021amounts)

Operating Operating Income Net Diluted Income Margin Tax Income EPS

Reported (GAAP) $ 157,454 16.7 % $ 20,281 $ 53,733 $ 0.34

Non-GAAP adjustments:

Restructuring 4,525 0.5 % (201) 7,291 0.05 related and other

Financing andother transaction 4,571 0.5 % (3,103) 32,805 0.21 costs^ (1)

Step-updepreciation and 29,696 3.2 % - 29,696 0.19 amortization

Deferred loss onderivative 1,840 0.2 % (748) 2,245 0.01 instruments

Amortization ofdebt issuance - - % - 1,711 0.01 costs

Deferred taxesand other tax - - % 10,122 10,122 0.06 related^ (2)

Total adjustments 40,632 4.3 % 6,070 83,870 0.53

Adjusted $ 198,086 21.0 % $ 14,211 $ 137,603 0.86 (non-GAAP)

(1)Includes a $30.1 million loss recognized related to the early redemption of our 6.25% Senior Notes due 2026 at 103.125%. The loss includes the payment of $23.4 million for the early redemption premium, with the remaining loss representing write-off of debt discounts and deferred financing costs. The loss is presented in other, net in our condensed consolidated statement of operations.

(2)Includes $10.1 million of current tax expense related to the repatriation of profit from certain Asian subsidiaries to their parent company in the Netherlands. The decision to repatriate these profits was the result of our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

Includes a $30.1 million loss recognized related to the early redemption of our 6.25% Senior Notes due 2026 at 103.125%. The loss includes the^ payment of $23.4 million for the early redemption premium, with the(1) remaining loss representing write-off of debt discounts and deferred financing costs. The loss is presented in other, net in our condensed consolidated statement of operations.

Includes $10.1 million of current tax expense related to the repatriation of profit from certain Asian subsidiaries to their parent company in the^ Netherlands. The decision to repatriate these profits was the result of(2) our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

($ in thousands, except per share amounts)

For the three months ended March 31, 2020

Operating Income

Operating Margin

Income Tax

Net Income

Diluted EPS

Reported (GAAP)

$

58,599

7.6

%

$

(1,516)

$

8,431

$

0.05

Non-GAAP adjustments:

Restructuring related and other (1)

43,757

5.7

%

(9,269)

38,188

0.24

Financing and other transaction costs

1,734

0.2

%

-

1,734

0.01

Step-up depreciation and amortization

32,271

4.2

%

-

32,271

0.20

Deferred loss on derivative instruments

309

0.0

%

-

5,884

0.04

Amortization of debt issuance costs

-

-

%

-

1,631

0.01

Deferred taxes and other tax related

-

-

%

(4,931)

(4,931)

(0.03)

Total adjustments

78,071

10.1

%

(14,200)

74,777

0.47

Adjusted (non-GAAP)

$

136,670

17.7

%

$

12,684

$

83,208

$

0.53

($ in thousands, except For the three months ended March 31, 2020per share amounts)

Operating Operating Income Net Diluted Income Margin Tax Income EPS

Reported (GAAP) $ 58,599 7.6 % $ (1,516) $ 8,431 $ 0.05

Non-GAAP adjustments:

Restructuring related 43,757 5.7 % (9,269) 38,188 0.24 and other ^(1)

Financing and other 1,734 0.2 % - 1,734 0.01 transaction costs

Step-up depreciation and 32,271 4.2 % - 32,271 0.20 amortization

Deferred loss on 309 0.0 % - 5,884 0.04 derivative instruments

Amortization of debt - - % - 1,631 0.01 issuance costs

Deferred taxes and other - - % (4,931) (4,931) (0.03) tax related

Total adjustments 78,071 10.1 % (14,200) 74,777 0.47

Adjusted (non-GAAP) $ 136,670 17.7 % $ 12,684 $ 83,208 $ 0.53

(1)Includes a $29.2 million loss recorded through cost of revenue in the first quarter of 2020 related to a judgment against us in an intellectual property litigation with Wasica Finance GmbH. We settled this litigation in the third quarter 2020; refer to our 2020 Annual Report on Form 10-K for additional information.

Non-GAAP adjustments by location in statements of operations

Includes a $29.2 million loss recorded through cost of revenue in the first quarter of 2020 related to a judgment against us in an intellectual^ property litigation with Wasica Finance GmbH. We settled this litigation(1) in the third quarter 2020; refer to our 2020 Annual Report on Form 10-K for additional information.

Non-GAAP adjustments by location in statements of operations

(in thousands) For the three months ended March 31,

2021 2020



Cost of revenue ^(1) $ 2,415 $ 35,994

Selling, general and administrative 4,388 6,182

Amortization of intangible assets 29,247 31,397

Restructuring and other charges, net 4,582 4,498

Operating income adjustments 40,632 78,071

Interest expense, net 1,711 1,631

Other, net ^(2) 35,457 9,275

Provision for/(benefit from) income taxes ^(3) 6,070 (14,200)

Net income adjustments $ 83,870 $ 74,777

(1)The first quarter of 2020 includes a $29.2 million loss recorded through cost of revenue related to a judgment against us in an intellectual property litigation with Wasica Finance GmbH. We settled this litigation in the third quarter 2020; refer to our 2020 Annual Report on Form 10-K for additional information.

(2)The first quarter of 2021 includes a $30.1 million loss recognized related to the early redemption of our 6.25% Senior Notes due 2026 at 103.125%. The loss includes the payment of $23.4 million for the early redemption premium, with the remaining loss representing write-off of debt discounts and deferred financing costs. The loss is presented in other, net in our condensed consolidated statement of operations.

(3)The first quarter of 2021 includes $10.1 million of current tax expense related to the repatriation of profit from certain Asian subsidiaries to their parent company in the Netherlands. The decision to repatriate these profits was the result of our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

Free cash flow

The first quarter of 2020 includes a $29.2 million loss recorded through cost of revenue related to a judgment against us in an intellectual^ property litigation with Wasica Finance GmbH. We settled this litigation(1) in the third quarter 2020; refer to our 2020 Annual Report on Form 10-K for additional information.

The first quarter of 2021 includes a $30.1 million loss recognized related to the early redemption of our 6.25% Senior Notes due 2026 at 103.125%.^ The loss includes the payment of $23.4 million for the early redemption(2) premium, with the remaining loss representing write-off of debt discounts and deferred financing costs. The loss is presented in other, net in our condensed consolidated statement of operations.

The first quarter of 2021 includes $10.1 million of current tax expense related to the repatriation of profit from certain Asian subsidiaries to^ their parent company in the Netherlands. The decision to repatriate these(3) profits was the result of our goal to reduce our balance sheet exposure and corresponding earnings volatility related to changes in foreign currency exchange rates as well as to fund our deployment of capital.

Free cash flow

($ in thousands) Three Months Ended % March 31, Change

2021 2020

Net cash provided by operating activities $ 104,511 $ 98,544 6.1 %

Additions to property, plant and equipment and (27,172) (29,547) 8.0 %capitalized software

Free cash flow $ 77,339 $ 68,997 12.1 %

Adjusted EBITDA

(In LTM Q1 21 Q4 20 Q3 20 Q2 20 Q1 20thousands)

Net income/ $ 209,588 $ 53,733 $ 121,667 $ 76,729 $ (42,541) $ 8,431 (loss)

Interest 176,397 44,043 47,417 44,129 40,808 39,403 expense, net

Provision for/(benefit 23,152 20,281 (13,751) 15,181 1,441 (1,516) from) incometaxes

Depreciation 122,198 31,197 31,464 28,928 30,609 34,679 expense

Amortizationof intangible 128,521 32,064 31,152 32,562 32,743 33,092 assets

EBITDA 659,856 181,318 217,949 197,529 63,060 114,089

Non-GAAP adjustments:

Restructuringrelated and 57,926 7,366 12,902 (5,050) 42,708 42,557 other

Financing andother 40,537 35,908 (832) 1,842 3,619 1,734 transactioncosts

Deferred(gain)/loss (9,852) 2,993 (1,992) (5,926) (4,927) 5,884 on derivativeinstruments

Adjusted $ 748,467 $ 227,585 $ 228,027 $ 188,395 $ 104,460 $ 164,264 EBITDA

Net debt and leverage ratio

As of:

($ in thousands) 3/31/21 12/31/20 12/31/19

Current portion of long-termdebt, finance lease and other $ 9,678 $ 757,205 $ 6,918 financing obligations ^(1)

Finance lease and otherfinancing obligations, less 27,605 27,931 28,810 current portion

Long-term debt, net 3,961,397 3,213,747 3,219,885

Total debt, finance lease, and 3,998,680 3,998,883 3,255,613 other financing obligations

Less: Discount (8,416) (9,605) (11,758)

Less: Deferred financing costs (30,495) (28,114) (24,452)

Total Gross indebtedness 4,037,591 4,036,602 3,291,823

Less: Cash and cash equivalents 1,893,926 1,861,980 774,119

Net Debt $ 2,143,665 $ 2,174,622 $ 2,517,704



Adjusted EBITDA (LTM) $ 748,467 $ 685,146 $ 900,137

Net leverage ratio 2.9 3.2 2.8

(1)On February 3, 2021, we announced that we intended to redeem in full the $750.0 million aggregate principal amount outstanding on our 6.25% Senior Notes due 2026. Because we had not issued our 2020 Annual Report on Form 10-K, we determined that these notes should be classified as current on our consolidated balance sheet as of December 31, 2020.

Guidance

On February 3, 2021, we announced that we intended to redeem in full the $750.0 million aggregate principal amount outstanding on our 6.25% Senior^ Notes due 2026. Because we had not issued our 2020 Annual Report on Form(1) 10-K, we determined that these notes should be classified as current on our consolidated balance sheet as of December 31, 2020.

Guidance

For the three months ending June 30, 2021

($ inmillions,except per Operating Income Net Income EPSshareamounts)

Low High Low High Low High

GAAP $ 160.3 $ 168.8 $ 92.2 $ 99.7 $ 0.59 $ 0.62

Restructuringrelated and 5.5 6.0 5.3 5.8 0.03 0.04 other

Financing andother 0.2 0.2 0.2 0.2 - - transactioncosts^(a)

Step-updepreciationand 29.0 30.0 29.0 30.0 0.18 0.19 amortization^(a)

Deferred(gain)/losson derivative - - - - - - instruments^(b)

Amortizationof debt - - 1.8 1.8 0.01 0.01 issuancecosts

Deferredtaxes and - - 5.5 6.5 0.03 0.04 other taxrelated

Non-GAAP $ 195.0 $ 205.0 $ 134.0 $ 144.0 $ 0.84 $ 0.90

Weighted-average diluted shares 159 159 outstanding (in millions)

For the full year ending December 31, 2021

($ in millions, except per share amounts)

Operating Income

Net Income

EPS

Low

High

Low

High

Low

High

GAAP

$

617.5

$

661.5

$

303.0

$

341.0

$

1.90

$

2.14

Restructuring related and other

16.0

18.0

18.5

20.5

0.12

0.13

Financing and other transaction costs(a)

5.2

5.2

33.5

33.5

0.21

0.21

Step-up depreciation and amortization(a)

114.5

118.5

114.5

118.5

0.72

0.75

Deferred (gain)/loss on derivative instruments(b)

1.8

1.8

2.2

2.2

0.01

0.01

Amortization of debt issuance costs

-

-

7.3

7.3

0.05

0.05

Deferred taxes and other tax related

-

-

30.0

34.0

0.19

0.21

Non-GAAP

$

755.0

$

805.0

$

509.0

$

557.0

$

3.20

$

3.50

Weighted-average diluted shares outstanding (in millions)

159

159

For the full year ending December 31, 2021

($ inmillions,except per Operating Income Net Income EPSshareamounts)

Low High Low High Low High

GAAP $ 617.5 $ 661.5 $ 303.0 $ 341.0 $ 1.90 $ 2.14

Restructuringrelated and 16.0 18.0 18.5 20.5 0.12 0.13 other

Financing andother 5.2 5.2 33.5 33.5 0.21 0.21 transactioncosts^(a)

Step-updepreciationand 114.5 118.5 114.5 118.5 0.72 0.75 amortization^(a)

Deferred(gain)/losson derivative 1.8 1.8 2.2 2.2 0.01 0.01 instruments^(b)

Amortizationof debt - - 7.3 7.3 0.05 0.05 issuancecosts

Deferredtaxes and - - 30.0 34.0 0.19 0.21 other taxrelated

Non-GAAP $ 755.0 $ 805.0 $ 509.0 $ 557.0 $ 3.20 $ 3.50

Weighted-average diluted shares 159 159 outstanding (in millions)

(a)

Amounts do not contemplate the effects of future acquisitions or financing transactions that occur beyond our most recent fiscal period end, including the acquisition of Xirgo Technologies and the additional issuance of 4.0% Senior Notes that occurred after the period end. Due to recent closing of the acquisition of Xirgo, the initial accounting is incomplete and we are not able to reasonably estimate the potential step-up depreciation and amortization implications thereof.

(b)

We are unable to predict movements in commodity prices and, therefore, the impact of mark-to-market adjustments on our commodity forward contracts to our projected 2021 operating results. In prior periods such adjustments have been significant in relation to our reported GAAP results.

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CONTACT: Investors: Jacob Sayer (508) 236-1666 jsayer@sensata.com

CONTACT: Media: Alexia Taxiarchos (508) 236-1761 ataxiarchos@sensata.com