Freescale Semiconductor CFO says deleveraging company a priority

By Lisa Kerner

Charlotte, N.C., Sept. 4 - Freescale Semiconductor, Inc.'s primary use of cash, other than possibly for some small tuck-in mergers and acquisitions, is for delevering the company, said chief financial officer Alan Campbell.

Campbell made his comments on Wednesday during a question-and-answer presentation at the Citi 2013 Global Technology Conference at the Hilton New York Hotel.

According to Campbell, 90% of Freescale's debt maturities are due in 2018 or beyond, thanks to recent efforts to extend and reduce maturities. The company is currently paying $460 million a year in interest on its debt but is not additionally refinancing more due to the market, said Campbell.

Freescale's net debt position has decreased by $3 billion to $5.7 billion, said Campbell. While debt reduction continues to get a lot of focus, it "doesn't keep us up at night," he said.

Campbell is comfortable with Freescale's cash of $700 million, which "may bobble up and down," and has "no issues at all from a liquidity standpoint."

The Austin, Texas-based semiconductor manufacturer recently used $100 million of cash to reduce its 2014 maturities, according to Campbell.

In addition to a "very strong cash position," the company has an undrawn revolver.

Freescale is also focused on gross margin improvement, having made strides in the last couple of quarters. The company is improving margins through utilization of facilities, operational efficiencies, procurement and new product introductions, according to Campbell.

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