News & Events
Intersil Announces Second Quarter Earnings
Reports revenue of $118.3 million, meeting consensus expectations
IRVINE, Calif. — July 24, 2001 — Intersil Corporation (NASDAQ: ISIL) today reported financial results for the quarter ended June 29, 2001. Compared to the previous quarter, sales declined 7% to $118.3 million, a 14% decrease from the same quarter of the prior year. Adjusted net income was $9.0 million or $.08 per diluted share of common stock. Net income including amortization was $1.2 million or $.01 per diluted share of common stock.
IRVINE, Calif. July 24, 2001 Intersil Corporation (NASDAQ: ISIL) today reported financial results for the quarter ended June 29, 2001. Compared to the previous quarter, sales declined 7% to $118.3 million, a 14% decrease from the same quarter of the prior year. Adjusted net income was $9.0 million or $.08 per diluted share of common stock. Net income including amortization was $1.2 million or $.01 per diluted share of common stock.
Intersil's gross margins for the second quarter increased to 50.3%, a 230 basis point gain from the previous quarter, with improvement across all product groups. The company also continued to strengthen its balance sheet, increasing its cash position by $27 million to $633 million.
"We emerge from the second quarter with a strong balance sheet and we continue to generate profit and cash from operations," said Intersil President and CEO Greg Williams. "We are encouraged by our market share gains, improvement in gross margins and strong cash flow despite difficult industry conditions. As a result, Intersil is able to invest at record levels in research and development in our focus areas of wireless networking and analog, which should position us for significant growth when industry conditions improve."
"During a quarter in which the semiconductor industry declined 20% sequentially according to World Semiconductor Trade Statistics (WSTS), Intersil outperformed the industry as a result of our strong, proprietary positions in analog and wireless," added Williams. "Customer design activities continue to grow for wireless home networking and video products and have now been expanded to include PDAs and other handheld devices. Intersil continues to gain market share in desktop PC power management and revenue from these products is expected to increase with the ramp up of Intel's new Pentium® 4 processor."
Results by Product Group
Wireless Access
Intersil's Wireless Access sales increased 9% from the second quarter of 2000 to $32.4 million, down 10% from the previous quarter. Continued soft conditions in the enterprise networking market were offset in part by strength in consumer and small business markets.
"During the quarter, we began sampling our new three-chip PRISM®: III solution that reduces our customers' bill of material costs by 25% while providing proven performance and value. We continue to see strong design activity for our 11 megabit per second (Mbps) PRISM solutions, particularly in embedded notebook and handheld applications," said Williams. "We're encouraged by new products entering production such as Compaq's MultiPort-equipped Evo notebooks, which offer built-in, 11 Mbps wireless networking capability thanks to our highly-integrated PRISM 2.5 chip set."
"PRISM 2.5 also passed Microsoft's Windows® Hardware Quality Labs (WHQL) tests during the quarter, becoming what we believe is the only WLAN solution in the industry to achieve success with both WHQL and Universal Serial Bus (USB) 1.1 certification," added Williams. "We are pleased with our leading position in building software compatibility with Microsoft® Windows, which should enable ease of use and rapid market adoption of our wireless technologies. Volume production of PRISM 2.5 should begin late in the third quarter for several notebook manufacturers and major new OEM partners targeting home, small business and enterprise markets."
Miniature Compact Flash radios using PRISM 2.5 will bring new communications capabilities to portable information appliances, and Intersil's manufacturing partners will begin volume production of these products during Q4. Companies such as YLez, a Singapore-based manufacturer, are already partnering with industry leaders to support high data rate connectivity for PRISM-based, Compact Flash radios in handheld devices such as Hewlett Packard's Jornada Pocket PC 540.
Intersil also announced its new PRISM Indigo 5 GHz wireless LAN product family during the second quarter of 2001. Intersil is in a unique position as the established, incumbent supplier of 11 Mbps radios, with the proven experience of delivering working firmware, reference designs and silicon in high-volume production. While the 802.11b 11 Mbps market still represents an attractive growth opportunity, Intersil plans to start delivering higher data rate customer samples during the fourth quarter of calendar 2001.
Adds Williams, "Our higher data rate offering (up to 36 Mbps) at 2.4 GHz is backward-compatible with the ten million 802.11b radios that have already been deployed. It is a natural extension of the 802.11b wireless LAN market, while our 5 GHz products will be ideally suited for building-to-building bridges and consumer multimedia applications. These wireless technologies offer tremendous potential growth in the coming years and Intersil is in the unique position to offer complementary solutions for both the 2.4 GHz and 5 GHz markets."
Communications Analog
Intersil's Communications Analog sales were $39.8 million during the second quarter, down 7% from the previous quarter. The Power Management portion of the analog business showed strength due to continued market share gains in desktop PCs, growing sequentially from the first quarter during a difficult PC market.
Intersil's multiphase controller architecture is becoming the solution of choice for Intel® and AMD desktop platforms. In fact, Intersil achieved record unit shipments during the second quarter and has now shipped more than 200 million units of Endura power management integrated circuits (ICs) worldwide.
"Design activity for Intersil's power management products increased during the quarter, particularly for those aimed at notebook computers and digital set top boxes," said Williams. "During the quarter, we announced that our Endura family of products will control power for over 50% of the world's Pentium® 4 microprocessors. We are making outstanding progress in full-size and lightweight notebook designs, securing reference designs with AMD for their mobile Athlon and Duron platforms. We also introduced a new IC included in Transmeta's Crusoe-based reference design during Q2."
Intersil continues to win new power management designs for its Endura product family, and recently added a leading graphics accelerator card manufacturer to its growing list of global customers.
Other Analog
Sales of Intersil's other analog products were $46.1 million during the second quarter of 2001, down only 7% from the previous quarter due to strong seasonal demand for military products. The previously announced Findlay, Ohio plant closure and the exit of the company's automotive business remain on track for completion by the middle of 2002.
Business Outlook
"We expect our focus areas of wireless access and power management to be sequentially flat in revenue in the third quarter," said Williams. "We anticipate total company revenue for the third quarter to be down between 5-9% sequentially, primarily because of seasonal and market softness in our Other Analog business. We anticipate gross margins of 50% based on continued cost improvements and expect earnings per share between $.06 to $.08 during our third quarter."
Investors and interested parties within the United States may listen to Intersil's conference call today at 1:30 p.m. Pacific/4:30 p.m. Eastern by dialing (888) 809-8966 and providing the operator with the pass code Intersil. International callers may connect to the call by dialing (712) 257-3320. A replay of Intersil's conference call will be available starting at 3:30 p.m. Pacific/6:30 p.m. Eastern by calling (888) 397-5650 in the US or (402) 998-1278 Internationally. Confirmation code for the replay, available until August 1, 2001, is 7000. A live webcast will also be available on Intersil's Internet homepage at http://www.intersil.com/investor/index.asp.
About Intersil
Irvine, California-based Intersil is a leading supplier of semiconductors, reference designs and software for wireless access and communications analog markets. Intersil applies analog, mixed-signal and radio frequency (RF) expertise to the development of products tailored for high-growth communications markets. For more information about Intersil, visit the company's Internet homepage at www.intersil.com.
| Intersil Corporation | |||||
| Financial Summary (Adjusted) | |||||
| (In millions, except per share amounts and percentages) | |||||
| Three Months Ended | Six Months Ended | ||||
| 6/29/01 | 6/30/00 | 6/29/01 | 6/30/00 | ||
| Revenue | $ 118.3 | $ 138.2 | $ 246.1 | $ 255.8 | |
| Year/Year Growth | -14% | -4% | |||
| Gross Margin | 59.5 | 62.4 | 120.9 | 112.7 | |
| (% of Sales) | 50% | 45% | 49% | 44% | |
| R&D | 28.4 | 19.8 | 55.2 | 37.9 | |
| SG&A | 24.2 | 28.8 | 49.9 | 54.4 | |
| Adjusted Operating Income | 6.9 | 13.8 | 15.7 | 20.4 | |
| % of Sales | 6% | 10% | 6% | 8% | |
| Adjusted Net Income (Loss) | 9.0 | 7.5 | 17.1 | 4.5 | |
| % of Sales | 8% | 5% | 7% | 2% | |
| Adjusted EPS | |||||
| Basic | $ 0.09 | $ 0.08 | $ 0.16 | $ 0.05 | |
| Diluted | $ 0.08 | $ 0.07 | $ 0.16 | $ 0.05 | |
| Weighted Average Shares | |||||
| Basic | 105.5 | 92.6 | 105.4 | 84.4 | |
| Diluted | 108.9 | 99.9 | 108.7 | 91.5 | |
| NOTE: This financial summary excludes amortization of intangibles, extraordinary items and one-time charges. | |||||
| Intersil Corporation | ||||||||||
| Statements of Operations | ||||||||||
| (In millions, except per share amounts) | ||||||||||
| Three Months Ended | Six Months Ended | |||||||||
| 6/29/01 | 6/30/00 | 6/29/01 | 6/30/00 | |||||||
| Revenue | ||||||||||
| Product Sales | $ | 118.3 | $ | 138.2 | $ | 246.1 | $ | 255.8 | ||
| Costs and Expenses | ||||||||||
| Cost of product sales | 58.8 | 75.8 | 144.4 | 143.1 | ||||||
| Research and development | 28.4 | 19.8 | 55.2 | 37.9 | ||||||
| Selling, general & administrative | 24.2 | 28.8 | 49.9 | 54.4 | ||||||
| Intangible amortization | 11.0 | 3.5 | 22.6 | 5.5 | ||||||
| Impairment of long-lived assets | - | - | 7.6 | - | ||||||
| Restructuring | - | - | 32.4 | - | ||||||
| Other | - _____ |
(0.1) _____ |
- _____ |
1.2 _____ |
||||||
| Operating income (loss) | (4.1) | 10.4 | (66.0) | 13.7 | ||||||
| Loss on sale of Malaysian operation | - | 24.8 | - | 24.8 | ||||||
| Interest, net | (6.6) | 2.3 | (9.8) | 14.0 | ||||||
| Impairment on investments | - _____ |
- _____ |
8.2 _____ |
- _____ |
||||||
| Income (loss) before sale of certain assests, income taxes and extraordinary item |
2.5 | (16.7) | (64.4) | (25.1) | ||||||
| Operating results of certain operations disposed of during 2001 |
||||||||||
| Net Sales | - | 53.0 | 38.4 | 106.3 | ||||||
| Costs and expenses | - _____ |
(38.5) _____ |
(41.1) _____ |
(78.3) _____ |
||||||
| - | 14.5 | (2.7) | 28.0 | |||||||
| Gain on sale of certain operations | - _____ |
- _____ |
168.4 _____ |
- _____ |
||||||
| - _____ |
14.5 _____ |
165.7 _____ |
28.0 _____ |
|||||||
| Income (loss) before income taxes and extraordinary item |
2.5 | (2.2) | 101.3 | 2.9 | ||||||
| Income taxes | 1.3 _____ |
(4.0) _____ |
49.5 _____ |
(1.7) _____ |
||||||
| Income before extraordinary item | 1.2 _____ |
1.8 _____ |
51.8 _____ |
4.6 _____ |
||||||
| Income before extraordinary item Extraordinary item - loss on extinguishment of debt, net of tax effect |
_____ |
- _____ |
(12.2) _____ |
(25.5) _____ |
||||||
| Net income (loss) | 1.2 | 1.8 | 39.6 | (20.9) | ||||||
| Preferred dividends | - _____ |
- _____ |
- _____ |
(1.5) _____ |
||||||
| Net income (loss) to common Shareholders | $ | 1.2 _____ _____ |
$ | 1.8 _____ _____ |
$ | 39.6 _____ _____ |
$ | (22.4) _____ _____ |
||
| EPS | ||||||||||
| Basic | ||||||||||
| Income before extraordinary item | $ | 0.01 | $ | 0.02 | $ | 0.49 | $ | 0.03 | ||
| Extraordinary item | - _____ |
- _____ |
(0.11) _____ |
(0.30) _____ |
||||||
| Net income (loss) | $ | 0.01 _____ _____ |
$ | 0.02 _____ _____ |
$ | 0.38 _____ _____ |
$ | (0.27) _____ _____ |
||
| Intersil Corporation Balance Sheets (In millions) |
| June 29, 2001 | March 30, 2001 | |
| Assets | ||
| Current Assets | ||
| Cash | $ 633.3 | $ 606.0 |
| Trade Receivables, net | 62.3 | 99.8 |
| Inventories | 72.5 | 72.4 |
| Prepaid expenses and other current assets | 12.5 | 9.2 |
| Deferred income taxes | 21.8 _____ |
21.8 _____ |
| Total Current Assets | 802.4 | 809.2 |
| Other Assets | ||
| Property, plant and equipment, net | 132.6 | 128.6 |
| Intangibles, net | 262.1 | 272.4 |
| Other | 33.9 _____ |
37.5 _____ |
| Total Other Assets | 428.6 _____ |
438.5 _____ |
| Total Assets | $ 1,231.0 | $ 1,247.7 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities | ||
| Trade account payables | $ 33.4 | $ 25.0 |
| Income taxes payable | 39.5 | 61.1 |
| Other accrued items | 101.0 _____ |
107.2 _____ |
| Total Current Liabilities | 173.9 | 193.3 |
| Other Liabilites | ||
| Deffered income taxes | 6.2 | 6.1 |
| Total Stockholders' Equity | 1,050.9 _____ |
1,048.3 _____ |
| Total Liabilities and Stockholders' Equity | $ 1,231.0 | $ 1,247.7 |
| Intersil Corporation Financial Highlights (In millions, except per share amounts) |
|||||||||||
| Adjustments to reconcile reported net income applicable to common shareholders to adjusted net income: |
|||||||||||
| Three Months Ended | Six Months Ended | ||||||||||
| June 29, 2001 | June 30, 2000 | June 29, 2001 | June 30, 2000 | ||||||||
| Net income (loss) | $ | 1.2 | $ | 1.8 | $ | 39.6 | $ | (20.9) | |||
| a) Amortization of aquisition-related intangibles | 11.0 | 3.5 | 22.6 | 5.5 | |||||||
| b) Impairment of long-lived assets | - | - | 7.6 | - | |||||||
| c) Restructuring | - | - | 32.4 | - | |||||||
| d) Impairment of investments | - | - | 8.2 | - | |||||||
| e) Loss on sale of Malaysian operation | - | 24.8 | - | 24.8 | |||||||
| f) Operating results of certain operations sold |
- | (14.5) | 2.7 | (28.0) | |||||||
| g) Gain on sale of certain operations | - | - | (168.4) | - | |||||||
| h) Excess inventory charge | - | - | 19.2 | - | |||||||
| i) Other | - | (0.1) | - | 1.2 | |||||||
| j) Associated tax effects | (3.1) | (8.1) | 41.1 | (3.7) | |||||||
| k) Loss on extinguished of debt (net of tax) | - | - | 12.2 | 25.5 | |||||||
| Adjusted net income | $ | 9.0 | 7.5 | $ | 17.1 | $ | 4.5 | ||||
| Diluted Adjusted earnings per share | $ | 0.08 | 0.07 | $ | 0.16 | $ | 0.05 | ||||
| Diluted Adjusted earnings common shares | 108.9 | 99.9 | 108.7 | 91.5 | |||||||
| Note: Amounts may not add due to rounding. | |||||||||||
PRISM is a registered trademark, and PRISM Indigo and Endura are trademarks of Intersil Americas Inc.
Intel, Transmeta, YLez, AMD, Compaq, Microsoft, Hewlett Packard, Pentium, Duron, Athlon, Compact Flash are trademarks of those respective companies in the United States and certain other countries.
All other trademarks mentioned are the property of their respective owners.
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