MILPITAS, CA--(MARKET WIRE)--Apr 16, 2008 -- Intersil Corporation (NasdaqGS:
ISIL -
News)
-- Achieves net revenues of $203.7 million; a 21% increase from 2007
-- Achieves GAAP sequential earnings per share growth of 19%
Intersil Corporation (NasdaqGS:ISIL - News), a world leader in the
design and
manufacture of high performance analog semiconductors, today
reported
financial results for the quarter ended March 28, 2008.
Net revenues for
the first quarter were $203.7 million, a 21% increase from
$167.7 million
in the first quarter of 2007 and a 4% decrease from $212.6
million in the
fourth quarter of 2007.
Generally Accepted Accounting Principles (GAAP) Results
For the first quarter of 2008, gross margins were 53.8%.
This compares to
gross margins of 57.4% in the same quarter last year, and
57.2% in the
fourth quarter of 2007. Gross margins in the first quarter
include
one-time charges of $5.9 million or 2.9% of net revenue.
Operating margins
from continuing operations were 19.8%, as compared to operating
margins of
19.7% in the same quarter last year, and 22.6% in the fourth
quarter of
2007. Net income from continuing operations was $47.7 million,
or $0.38
earnings per diluted share from continuing operations, as
compared to net
income of $33.1 million, or $0.24 earnings per diluted share
in the same
quarter last year. For the fourth quarter of 2007, the Company
reported
net income from continuing operations of $42.4 million,
or $0.32 earnings
per diluted share.
During the first quarter, the Company had several one-time
events. The
Company incurred one-time charges totaling $9.5 million
as it initiated a
plan to restructure certain operations and consolidate its
internal
manufacturing facilities. The Company recorded a one-time
tax benefit of
$39.4 million, of which $20.0 million was related to continuing
operations.
This resulted in a net tax benefit of $9.8 million for the
first quarter.
Non-GAAP Results
For the first quarter of 2008, non-GAAP gross margins were
57.2%. This
compares to gross margins of 58.0% for the same quarter
last year, and
57.6% for the fourth quarter of 2007. Operating margins
were 28.1%, as
compared to operating margins of 27.1% for the same quarter
last year, and
28.9% for the fourth quarter of 2007. Earnings per diluted
share were
$0.37. This compares to $0.29 per diluted share for the
same quarter last
year, and $0.39 per diluted share for the fourth quarter
of 2007.
"Despite the challenging macro-economic environment, we
achieved our
expectations for revenue and earnings," stated Dave Bell,
Intersil's
President and Chief Executive Officer. "Our business continues
to perform
well as our earnings grew faster than our revenues. We are
pleased with
our constant progress in expanding our revenue stream across
a broad
portfolio of products."
By end market, Intersil's first quarter revenues were as
follows: high-end
consumer (26.9% of revenues), computing (28.0% of revenues),
industrial
(21.6% of revenues), and communications (23.5% of revenues).
"As expected,
we saw sequential revenues decline in the high end consumer
and computing
markets, in line with normal seasonality. Revenues from
the industrial
market were down moderately with decline in some military
products.
Revenues in the communications market experienced sequential
growth due to
typical seasonality and traction within our general purpose
product
portfolio," said Mr. Bell.
During the quarter, the Company repurchased approximately
$80 million or
3.4 million shares of its stock, under a previously announced
stock
repurchase program. The Company's Board of Directors has
also authorized
the payment of a quarterly dividend of $0.12 per share of
common stock.
The payment of this dividend will be made on May 16, 2008
to shareholders
of record as of the close of business on May 6, 2008.
Business Outlook
"For the second quarter, we expect Intersil to return to
growth as our
design win momentum continues to gain traction," said Mr.
Bell. "We expect
the second quarter to show sequential growth of approximately
5% to 8% from
the first quarter. As we indicated, we will have an extra
week in the
second quarter, which should account for approximately 5%
sequential
growth. Although our overall business remains strong, we
remain cautious
given the economic uncertainties of the global markets.
As a result, we
expect the business, excluding the extra week, to be flat
to up 3%
sequentially. We expect GAAP earnings per diluted share
of approximately
$0.29 to $0.31 and non-GAAP earnings per diluted share of
approximately
$0.38 to $0.39."
Investors and interested parties within the United States
may listen to
Intersil's conference call on April 16th at 1:45 p.m. Pacific/4:45
p.m.
Eastern by dialing (866) 831-6272 using the password "Intersil."
International callers may connect to the call by dialing
(617) 213-8859. A
replay of Intersil's conference call will be available for
two weeks by
dialing (888) 286-8010 in the U.S. or (617) 801-6888 internationally
using
the access code "21770757." A webcast replay of the conference
call will be
available for two weeks on the Company's web site at
http://www.intersil.com/investor.
A copy of this press release may be
found on the Company's web site at http://www.intersil.com/investor.
About Intersil
Intersil Corporation is a world leader in the design and
manufacture of
high-performance analog semiconductors. The Company's products
address some
of the industry's fastest growing markets, such as, flat
panel displays,
cell phones, other handheld systems, and notebooks. Intersil's
product
families address power management functions and analog signal
processing
functions. Intersil products include ICs for battery management,
hot-swap
and hot-plug controllers, linear regulators, power sequencers,
supervisory
ICs, bridge drivers, PWM controllers, switching DC/DC regulators
and power
MOSFET drivers; optical storage laser diode drivers; DSL
line drivers;
video and high-performance operational amplifiers; data
converters;
interface ICs; analog switches and multiplexers; crosspoint
switches;
voice-over-IP devices; and ICs for military, space and radiation-hardened
applications. 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.
NON-GAAP REPORTING
In addition to GAAP reporting, Intersil reports net income
or loss, as well
as earnings per share, gross margin and operating margin
on a non-GAAP
basis. This non-GAAP earnings information excludes stock-based
compensation
expense, amortization of intangibles and unusual items and
their related
tax effects. Intersil believes this non-GAAP earnings information
provides
meaningful insight into the Company's on-going performance
and has
therefore chosen to provide this information to investors
for a more
consistent basis of comparison and to emphasize the results
of on-going
operations. Intersil also uses this information internally
to evaluate and
manage the Company. A reconciliation between GAAP and non-GAAP
net income
is included in the tables below.
FORWARD-LOOKING STATEMENTS
Intersil 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 Corporation's
("Intersil") 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 ("SEC") (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 shares and per share amounts)
Three Months Ended
--------------------------------
Mar 28, Mar 30, Dec 28,
2008 2007 2007
------- -------- -------
(Q1 (Q1 (Q4
2008) 2007) 2007)
Net revenues $ 203.7 $ 167.7 $ 212.6
Restructuring cost of revenues 5.9 - -
Product cost of revenues 88.2 71.5 91.0
------- -------- -------
Gross profit 109.6 96.2 121.6
Expenses
Research and development 35.1 30.8 35.5
Selling, general and administrative 27.5 30.0 35.0
Amortization of purchased intangibles 3.0 2.4 3.5
Restructuring 3.6 - -
In-process research and development
charge (credit) - - (0.3)
------- -------- -------
Operating income from continuing
operations 40.4 33.0 48.0
(Loss)Gain on deferred comp
investments, net (1.0) 0.2 (0.1)
Loss on investments (6.4) - -
Interest income, net 4.8 7.9 6.7
------- -------- -------
Income from continuing operations before
income taxes 37.9 41.1 54.6
Income tax (benefit) expense from
continuing operations (9.8) 8.0 12.1
------- -------- -------
Income from continuing operations 47.7 33.1 42.4
Discontinued operations
Income (loss) from discontinued
operations, before taxes - - (0.1)
Income tax (benefit) expense from
discontinued operations (19.4) - 2.1
------- -------- -------
Income (loss) from discontinued
operations 19.4 - (2.1)
------- -------- -------
Net income $ 67.1 $ 33.1 $ 40.3
======= ======== =======
Earnings per share
Basic
Continuing operations $ 0.38 $ 0.24 $ 0.33
Discontinued operations $ 0.15 - (0.02)
------- -------- -------
Net income per share $ 0.53 $ 0.24 $ 0.31
======= ======== =======
Diluted
Continuing operations $ 0.38 $ 0.24 $ 0.32
Discontinued operations 0.15 - (0.02)
------- -------- -------
Net income per share $ 0.53 $ 0.24 $ 0.31
======= ======== =======
Weighted average shares
Basic 125.9 135.1 129.4
======= ======== =======
Diluted 126.9 136.7 130.8
======= ======== =======
Stock compensation expense by
Classification: Three Months Ended
--------------------------------
Mar 28, Mar 30, Dec 28,
2008 2007 2007
------- -------- -------
Cost of sales $ 1.0 $ 1.0 $ 0.9
Research and development 3.5 3.4 4.0
Selling, general and administrative 0.9 5.4 5.5
Note: Totals and percentages may not add or calculate precisely due to
rounding.
Intersil Corporation
Financial Summary (Non-GAAP)
Unaudited
(In US$ millions, except shares, per share amounts and percentages)
Three Months Ended
--------------------------------
Mar 28, Mar 30, Dec 28,
2008 2007 2007
------- ------- -------
(Q1 (Q1 (Q4
2008) 2007) 2007)
Net revenues $ 203.7 $ 167.7 $ 212.6
Gross profit 116.5 97.2 122.5
% of Revenues 57.2% 58.0% 57.6%
Research and development 31.7 27.4 31.5
Selling, general and administrative 27.6 24.4 29.6
Operating income $ 57.2 $ 45.4 $ 61.4
% of Revenues 28.1% 27.1% 28.9%
Interest and other non-operating income 4.8 7.9 6.7
Pretax income 62.1 53.3 68.2
Net income $ 47.4 $ 40.2 $ 51.9
% of Sales 23.3% 24.0% 24.4%
Earnings Per Share
Basic $ 0.38 $ 0.30 $ 0.40
Diluted $ 0.37 $ 0.29 $ 0.39
Weighted Average Shares
Basic 125.9 135.1 129.4
Diluted 128.1 137.8 132.5
Other Financial Metrics:
Free cash flow:
Cash flow from operations $ 59.2 $ 44.2 $ 58.9
Proceeds from sales of PP&E - 4.4 0.6
Capital expenditures (14.1) (4.2) (6.7)
------- ------- -------
Free cash flow $ 45.1 $ 44.4 $ 52.7
======= ======= =======
Depreciation $ 5.0 $ 5.1 $ 5.3
======= ======= =======
NOTE: This financial summary excludes amortization of intangibles, stock
based compensation including the adoption of FAS123R at the beginning of
fiscal 2006, and unusual items. For operating income only it excludes gains
or losses related to deferred compensation investments. These adjustments
are included in the Financial Bridge table.
Note: Totals and percentages may not add or calculate precisely due to
rounding.
Intersil Corporation
Financial Bridge: GAAP to Non-GAAP
Unaudited
(In US$ millions, except share and per share amounts)
Three Months Ended
--------------------------------
Mar 28, Mar 30, Dec 28,
2008 2007 2007
------- ------- -------
(Q1 (Q1 (Q4
2008) 2007) 2007)
Gross profit on GAAP basis: $ 109.6 $ 96.2 $ 121.6
Stock compensation expense 1.0 1.0 0.9
Restructuring cost of revenues 5.9 - -
------- ------- -------
Gross profit on Non-GAAP basis: $ 116.5 $ 97.2 $ 122.5
======= ======= =======
Operating income on GAAP basis: $ 40.4 $ 33.0 $ 48.0
Acquisition related expenses -
intangibles amortization 3.0 2.4 3.5
(Loss) gain on deferred comp
investments, net (1.0) 0.2 (0.1)
Stock compensation expense 5.3 9.8 10.4
Restructuring cost of revenues 5.9 - -
Restructuring 3.6 - -
In-process research & development
charge (credit) - - (0.3)
------- ------- -------
Operating income on Non-GAAP basis: $ 57.2 $ 45.4 $ 61.4
======= ======= =======
Net income on GAAP basis: $ 67.1 $ 33.1 $ 40.3
Acquisition related expenses -
intangibles amortization 3.0 2.4 3.5
Loss on investments (6.4) - -
Stock compensation expense 5.3 9.8 10.4
Restructuring cost of revenues 5.9 - -
Restructuring 3.6 - -
In-process research & development
charge (credit) - - (0.3)
Net (gain) loss from discontinued
operations (19.4) - 2.1
Associated tax effects (11.7) (5.1) (4.1)
------- ------- -------
Net income on Non-GAAP basis: $ 47.4 $ 40.2 $ 51.9
======= ======= =======
Diluted Non-GAAP earnings per share $ 0.37 $ 0.29 $ 0.39
======= ======= =======
Diluted weighted average common shares
outstanding 126.9 136.7 130.8
Diluted weighted average shares
difference attributable to FAS123R 1.2 1.1 1.7
------- ------- -------
Diluted Non-GAAP weighted average common
shares outstanding 128.1 137.8 132.5
======= ======= =======
To supplement our consolidated financial statements presented in accordance
with GAAP, we have shown above a non-GAAP (pro forma) presentation of the
Company's key financial measures, which is adjusted to reflect the GAAP
results excluding stock based compensation expense, amortization of
intangibles, discontinued operations and unusual items. These non-GAAP
presentations are provided to enhance the reader's overall understanding of
the comparability of the Company's financial performance between periods
and in general.
Note: Totals and percentages may not add or calculate precisely due to
rounding.
Intersil Corporation
Consolidated Balance Sheets
Unaudited
(In US$ millions)
Mar 28, Dec 28,
2008 2007
---------- ----------
Assets
Current Assets
Cash, cash equivalents and short-term investments $ 316.4 $ 483.8
Trade receivables, net 113.1 117.4
Inventories, net 91.2 97.7
Prepaid expenses and other current assets 9.0 10.0
Deferred income taxes 32.7 39.5
---------- ----------
Total Current Assets 562.4 748.5
Other Assets
Property, plant and equipment, net 116.8 109.6
Purchased intangibles, net 27.0 29.9
Goodwill 1,445.7 1,445.8
Deferred income taxes 44.2 37.5
Long-term investments 132.0 19.1
Other 14.0 14.6
---------- ----------
Total Other Assets 1,779.7 1,656.5
---------- ----------
Total Assets $ 2,342.1 $ 2,405.0
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Trade accounts payable $ 35.1 $ 40.2
Income taxes payable 18.2 19.2
Deferred net revenue 10.7 10.3
Other accrued items 59.9 55.7
---------- ----------
Total Liabilities 123.8 125.4
Non-current Liabilities
Income taxes payable - 40.7
Total Shareholders' Equity 2,218.3 2,238.9
---------- ----------
Total Liabilities and Shareholders' Equity $ 2,342.1 $ 2,405.0
========== ==========
Note: Totals and percentages may not add or calculate precisely due to
rounding.