Intersil Corporation Reports Third Quarter Results

Marketwired

MILPITAS, CA--(Marketwire - 10/20/10) - Intersil Corporation (NASDAQ:ISIL - News)

 

-- Third quarter revenue increased 30% year-over-year
-- Record gross margin of 58.9%
-- Achieves GAAP EPS of $0.26 per share; Non-GAAP EPS of $0.28 per share
-- Industrial end market grows to 34% of revenues

Intersil Corporation (NASDAQ:ISIL - News), a world leader in the design and manufacture of high performance analog and mixed signal semiconductors, today reported financial results for its third quarter ended October 1, 2010.Results of OperationsNet revenues for the third quarter were $219.1 million, a 30% increase from $168.3 million in the third quarter of 2009, and essentially flat compared to the $219.9 million in the second quarter of 2010. Intersil's third quarter revenues ranked by end market were as follows: industrial, 34.4%; high-end consumer, 23.6%; computing, 21.2%; and communications, 20.8%.Gross margin for the third quarter increased to a record 58.9%, compared with gross margin of 54.6% in the same quarter last year, and 58.3% in the second quarter of 2010.Operating margin increased to 17.5% during the third quarter. Net income increased to $32.1 million, or $0.26 per diluted share, compared with net income of $12.3 million, or $0.10 per diluted share, in the same quarter last year, and net loss of $59.4 million, or a loss of $0.48 per diluted share, in the second quarter of 2010. Excluding the effects of intangible amortization and one-time acquisition charges, operating income was $48.2 million, or 22.0% of revenue, and excluding discrete tax benefits, net income was $34.5 million, or $0.28 per diluted share."Intersil's third quarter revenues were similar to the prior quarter despite significantly reduced shipments of our PC power management products," said Dave Bell, Intersil's President and Chief Executive Officer. "We continued to make excellent progress in transforming our business towards higher margin industrial markets. The entire company also did an excellent job of managing operating expenses and manufacturing costs, allowing us to achieve record gross margin and meet our earnings guidance."At the end of the third quarter, Intersil's cash and short-term investments totaled over $370 million, and free cash flow was $38 million for the third quarter.Intersil's Board of Directors has authorized the payment of a quarterly dividend of $0.12 per share of common stock. The payment of this dividend will be made on November 19, 2010 to shareholders of record as of the close of business on November 9, 2010.Fourth Quarter 2010 Outlook
 

-- Revenues are expected to be in the range of $202 million to $214
million (-8% to -2% sequentially)
-- Research and development expenses are expected to be approximately $47
million
-- Selling, general and administrative expenses are expected to be
approximately $35 million
-- Stock-based compensation expenses are expected to be approximately
$9.2 million
-- Amortization of intangibles is expected to be approximately $7.3
million
-- GAAP earnings per diluted share are expected to be in the range of
$0.17 to $0.20
-- Non-GAAP earnings per diluted share (excluding amortization of
intangibles) are expected to be in the range of $0.21 to $0.24

"We expect the recent inventory correction to end and shipments to become better aligned with consumption during the fourth quarter. Design win activity remains strong across all end markets, and we are gaining share in industrial, our largest end market. Additionally, our business continues to benefit from our manufacturing capacity and low lead times," said Bell.
Intersil will discuss its third quarter financial results during its scheduled conference call following the market close on October 20th. Those wishing to participate in the conference call please dial (866) 383-7998, and international participants please dial +1 (617) 597-5329, using the password 74813001 at approximately 1:40 p.m. Pacific Time. Those wishing to listen to the call may also do so via webcast on Intersil's Web site: http://www.intersil.com/investor.A replay of the call will be available for two weeks following the conference call on Intersil's Web site, or may be accessed by dialing (888) 286-8010, international dial +1 (617) 801-6888, using the password 35160584.About IntersilIntersil Corporation is a leader in the design and manufacture of high-performance analog, mixed signal and power management semiconductors. The Company's products address some of the fastest growing markets within the communications, computing, consumer and industrial industries. For more information about Intersil or to find out how to become a member of our winning team, visit the Company's web site and career page at www.intersil.com.FORWARD-LOOKING STATEMENTSIntersil Corporation press releases and other related comments may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, in connection with the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon Intersil's management's current expectations, estimates, beliefs, assumptions and projections about Intersil's business and industry. Words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "potential," "continue," "goals," "targets" and variations of these words (or negatives of these words) or similar expressions, are intended to identify forward-looking statements. In addition, any statements that refer to projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various risk factors. Intersil does not adopt and is not responsible for any forward-looking statements and projections made by others in this press release. Intersil's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Intersil filings with the U.S. Securities and Exchange Commission (which you may obtain for free at the SEC's web site at http://www.sec.gov) discuss some of the important risk factors that may affect our business, results of operations and financial condition. These forward-looking statements are made only as of the date of this communication and Intersil undertakes no obligation to update or revise these forward-looking statements.
 
Intersil Corporation
Consolidated Statements of Operations
Unaudited
(In US$ millions, except per share amounts)

Quarters Ended Three Quarters Ended
---------------------------------- ----------------------
October 1, October 2, July 2, October 1, October 2,
2010 2009 2010 2010 2009
---------- ---------- ---------- ---------- ----------
(Q3 2010) (Q3 2009) (Q2 2010) (YTD 2010) (YTD 2009)

Net revenues $ 219.1 $ 168.3 $ 219.9 $ 628.4 $ 433.7

Cost of
revenues 90.1 76.5 91.7 264.2 197.0
---------- ---------- ---------- ---------- ----------

Gross profit 129.1 91.8 128.2 364.2 236.8

Expenses
Research and
development 47.5 38.4 47.2 136.4 108.2
Selling,
general and
administrative 33.4 31.9 35.6 100.6 87.5
Amortization
of purchased
intangibles 9.3 3.0 8.1 20.3 9.9
Acquisition
related
costs 0.4 0.6 6.5 7.9 0.4
Restructuring
and other
related
activities - 0.4 - - 2.3
---------- ---------- ---------- ---------- ----------
Operating
income 38.4 17.5 30.8 99.0 28.4
Gain (loss)
on deferred
compensation
investments 0.2 1.0 (0.3) 0.3 1.8
Loss on
investments,
net - (14.3) (0.1) (1.2) (14.3)
Interest
income 0.8 1.2 0.8 2.3 4.3
Interest
expense and
fees (4.2) (0.2) (3.2) (7.6) (0.4)
---------- ---------- ---------- ---------- ----------
Income before
income taxes 35.2 5.2 28.1 92.9 19.8
Income tax
expense
(benefit) 3.2 (7.0) 87.5 92.6 (1.1)
---------- ---------- ---------- ---------- ----------
Net income
(loss) $ 32.1 $ 12.3 $ (59.4) $ 0.3 $ 20.9
========== ========== ========== ========== ==========

Earnings (loss)
per share:
---------- ---------- ---------- ---------- ----------
Basic $ 0.26 $ 0.10 $ (0.48) $ 0.00 $ 0.17
========== ========== ========== ========== ==========
Diluted $ 0.26 $ 0.10 $ (0.48) $ 0.00 $ 0.17
========== ========== ========== ========== ==========

Weighted average
shares:
Basic 123.9 122.3 123.7 123.5 122.1
========== ========== ========== ========== ==========
Diluted 124.0 122.3 123.7 124.5 122.2
========== ========== ========== ========== ==========



Other financial metrics:

Stock-based Quarters Ended Three Quarters Ended
compensation ---------------------------------- ----------------------
expense by October 1, October 2, July 2, October 1, October 2,
classification: 2010 2009 2010 2010 2009
---------- ---------- ---------- ---------- ----------
Cost of
revenues $ 0.6 $ 0.6 $ 0.5 $ 1.6 1.9
Research and
development 4.2 2.9 4.1 11.2 9.3
Selling,
general and
administrative 3.8 3.4 2.8 10.5 9.7

Note: Totals and percentages may not add or calculate precisely due to
rounding.



Intersil Corporation
Additional Information
Unaudited
(In US$ millions)


Quarters Ended
----------------------------------
October 1, October 2, July 2,
2010 2009 2010
---------- ---------- ----------
(Q3 2010) (Q3 2009) (Q2 2010)

Cash flow information:
Cash from operations $ 44.5 $ 34.8 $ 27.3
Net capital expenditures 6.5 2.2 4.3
---------- ---------- ----------
Free cash flow $ 38.0 $ 32.6 $ 23.0
========== ========== ==========


EBITDA:
Operating income $ 38.4 $ 17.5 $ 30.8
Depreciation 5.4 5.1 5.3
Intangible amortization 9.3 3.0 8.1
Stock-based compensation 8.6 6.9 7.3
---------- ---------- ----------
EBITDA $ 61.7 $ 32.5 $ 51.5
========== ========== ==========


Effect of acquisition related costs
Operating income $ 38.4 $ 17.5 $ 30.8
Acquisition costs 0.4 0.6 6.5
Intangible amortization 9.3 3.0 8.1
---------- ---------- ----------
Operating income excluding
acquisition related costs $ 48.2 $ 21.1 $ 45.4
========== ========== ==========

Revenues $ 219.1 $ 168.3 $ 219.9
Operating margin excluding
acquisition related costs 22.0% 12.6% 20.7%


Effect of tax reserves and acquisition
costs
Net income (loss) $ 32.1 $ 12.3 $ (59.4)
Non-cash and discrete tax adjustments (7.3) - 81.0
Acquisition related costs 9.7 3.6 14.6
---------- ---------- ----------
Net income excluding tax adjustments
and acquisition costs $ 34.5 $ 15.9 $ 36.2
========== ========== ==========


Diluted shares outstanding 124.0 122.3 123.7
========== ========== ==========


Adjusted earnings per share $ 0.28 $ 0.13 $ 0.29
========== ========== ==========


Six-month backlog $ 167.2 $ 143.1 $ 227.1


Effect of certain noncash and discrete
items:
Amortization of intangibles (net of
tax) $ 7.2 $ 2.6 $ 6.2
Restructuring and other related
activities (net of tax) - 0.3 -
Loss on investments (net of tax) - 4.6 0.1
Stock-based compensation (net of tax) 6.6 5.9 5.6
Non-cash and discrete tax adjustments (7.3) - 81.0


Note: Totals and percentages may not add or calculate precisely due to
rounding.



Intersil Corporation
Consolidated Balance Sheets
Unaudited
(In US$ millions)

October 1, January 1,
2010 2010
----------- -----------
Assets
Current assets:
Cash, cash equivalents and short-term
investments $ 370.4 $ 361.2
Trade receivables, net 101.1 73.6
Inventories, net 101.4 81.2
Prepaid expenses and other current assets 14.9 9.4
Deferred income taxes 27.4 27.4
----------- -----------
Total current assets 615.3 552.8
Other assets:
Property, plant and equipment, net 102.3 102.3
Purchased intangibles, net 146.4 26.6
Goodwill 561.4 314.7
Deferred income taxes 96.4 91.0
Long-term investments 66.1 63.9
Other 93.1 14.5
----------- -----------
Total other assets 1,065.6 613.0
----------- -----------
Total assets $ 1,680.9 $ 1,165.8
=========== ===========

Liabilities and shareholders' equity
Current liabilities:
Trade accounts payable $ 45.3 $ 31.5
Income taxes payable 181.2 30.7
Deferred net revenue 15.0 9.7
Other accrued items 79.4 62.8
----------- -----------
Total current liabilities 321.0 134.7
Non-current liabilities
Long-term debt 296.3 -
Deferred tax charge 40.2 -
----------- -----------
Total non-current liabilities 336.5 -
----------- -----------
Total shareholders' equity 1,023.4 1,031.1
----------- -----------
Total liabilities and shareholders' equity $ 1,680.9 $ 1,165.8
=========== ===========


Note: Totals and percentages may not add or calculate precisely due to
rounding.
Contact:





View Comments (0)