News & Events
Intersil Corporation Announces Fourth Quarter 2002 Financial Results
-- Achieves $179.9 million in revenue; in line with December guidance and up 24% from the same quarter of 2001~-- Meets EPS guidance of $0.18 and generates more than $40 million in cash from operations
MILPITAS, CA, January 28, 2003 Intersil Corporation (NASDAQ: ISIL), a world leader in the design and manufacture of high performance analog and wireless networking solutions, today reported financial results for the fourth quarter ended January 3, 2003. Net revenue was $179.9 million, a decrease of 6% from the previous quarter but a 24% increase from the same quarter in the prior year. Excluding amortization of intangibles, adjusted net income for the fourth quarter was $25.3 million or $0.18 per diluted share of common stock. This compares to adjusted net income of $14.8 million or $0.11 per diluted share for the fourth quarter of 2001. Net income on a generally accepted accounting principles (GAAP) basis for the fourth quarter of 2002 was $0.4 million or $0.00 per diluted share. This compares to net income of $3.5 million or $0.03 per diluted share for the same period a year ago.
For the total year, Intersil achieved adjusted net revenue of $706.2 million, an increase of 23% over the previous year, and reported adjusted earnings per share of $0.66, an increase of 89% from 2001.
Our company performance remains strong, said Rich Beyer, Intersils president and CEO. Our total analog revenue grew sequentially in the fourth quarter, driven by strength in our Power Management and Elantec Product Groups, and all our product groups grew year over year. We achieved gross margins of approximately 53% and generated over $40 million in cash flow from operations. Our cash balance improved to over $623 million during the quarter, days sales outstanding held steady at 45 days and we reduced our inventory position by approximately $11 million.
Our results in 2002 demonstrate that our strategic model is working, added Beyer. Intersils revenue grew 23% during a year in which the semiconductor industry grew only about 2%, and our Power Management, Elantec and Wireless Networking Product Groups all grew more than 10%. Our focus on high performance analog and wireless networking markets has enabled us to outpace the industry in revenue growth while significantly improving our profitability.
Results by Product Group
Revenue for Intersils Power Management products reached a record $52.6 million during the fourth quarter, an increase of 12% from the prior quarter and 17% from the fourth quarter of 2001. Growth in power management came from products used across the range of Intersils targeted platforms -- desktop PCs, notebook PCs, double data-rate (DDR) memory and graphics cards. Intersil shipped its 500 millionth Enduraä power management IC during the quarter, and continues to add to its leadership position with innovative high performance analog products, such as its new VR10 Power Management solution for next-generation Intel processors and new battery charger ICs for notebooks and portables.
Sales of Elantec products increased 2% sequentially and 11% over the fourth quarter of the prior year to $25.5 million. Growth for the Elantec Product Group came from its optical storage and DSL products. As the worlds leading supplier of laser diode drivers for CD-Read/Write and DVD-Recordables, Intersil is well positioned as an increasing percentage of PCs incorporate DVD-Recordable drives. Strength also came from the sale of Elantec DSL line drivers, driven particularly by strong demand for Central Office products in Japan.
Intersils Standard Analog revenue decreased 11% sequentially but increased slightly from the same quarter in the prior year to $30.2 million. This product group continues to be impacted by soft demand, particularly in the North American distribution channel; it is expected to resume growth as the market strengthens in the second half of 2003. Intersils broad portfolio of Standard Analog products offers attractive gross margins and continues to generate positive cash flow for the company.
Automotive product sales peaked at $15.4 million during the fourth quarter as Intersil fulfilled last-time purchases from automotive customers. The company expects minimal revenue from this product group in the first quarter of 2003, as the exit of this business is completed. As previously announced, Intersil is exiting the automotive business in order to focus on higher growth and more profitable areas of its business.
In line with expectations, Intersils Wireless Networking sales decreased 25% from the previous quarter but grew 49% year over year to $56.2 million. As indicated in December, while Intersil experienced customer-requested delayed shipments late in the fourth quarter, it appears that inventory in the channel is now clearing as anticipated and the end markets for WLAN products remain solid. The company recently announced design wins with leading OEMs D-Link, NETGEAR, corega and USI for Intersils next generation 802.11g-based PRISM GT chip set which began shipping late in the fourth quarter of 2002. Intersil is also seeing strong interest for its new dual band 802.11a, b and g WLAN solution, PRISM Duette, which will begin shipping in volume in the first quarter of 2003.
Business Outlook
Looking ahead to the first quarter, Beyer said, We continue to be cautious in our near-term outlook as we enter an historically soft quarter for the semiconductor industry. As we indicated in December, we expect revenue from our continuing product groups to be slightly down from the fourth quarter due to normal seasonality. We anticipate approximately $2-$3 million of final automotive sales in the first quarter of 2003. This results in total expected revenue of $160-$165 million for the company. We anticipate gross margins of approximately 53% and adjusted earnings per share of $0.13-$0.14.
Beyer concluded, We introduced more than 100 new analog products in 2002 and began shipping next generation, high-data-rate WLAN products to leading customers, while improving our competitiveness and cost structure. By successfully executing our strategy, Intersil gained market share for the third consecutive year. We will invest in these markets again in 2003 so that we can continue to outperform the industry."
Investors and interested parties within the United States may listen to Intersil's fourth quarter earnings conference call today at 4:30 p.m. Eastern/1:30 p.m. Pacific by dialing (877) 709-5342 and providing the operator with the pass code Intersil. International callers may connect to the call by dialing (630) 395-0024. A replay of Intersils conference call will be available beginning at 7:00 p.m. Eastern/4:00 p.m. Pacific on January 28 and for one week thereafter by calling (800) 454-0161 in the US or (402) 220-2149 Internationally. Confirmation code for the replay is 42069. A live webcast will also be available on Intersils Investor Relations homepage at http://www.intersil.com/investor and a replay will be available until February 4, 2003.
About IntersilIntersil Corporation is a global semiconductor leader in the design and manufacture of high performance analog and wireless networking solutions. Intersil's product portfolios address four fast growing markets - flat panel displays, optical storage (CD and DVD recordable), power management and wireless networking. Intersil brings added customer value in providing complete silicon, software and reference design solutions to new products that enhance the computing experience for people wherever they live, work or travel. 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
This press release contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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,” 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 expectations, 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. Important risk factors that may cause such material differences for Intersil include, but are not limited to: the slowdown in the technology sector generally and the semiconductor industry specifically; the rate at which our present and future customers and end-users adopt Intersil’s high performance analog, wireless access, optical storage, and flat panel display technologies and products; the rate at which consumers purchase small handheld Internet appliances, portable computing devices, notebook computers, optical storage (CD and DVD recordable), video and communications technologies and products; the timing, rescheduling or cancellation of significant customer orders; the ability of our customers to manage inventory; the loss of a key customer; the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; silicon wafer pricing and the availability and quality of our foundry capacity and raw materials; availability, pricing, and quality of third party foundry and assembly and test capacity and raw materials; fluctuations in the manufacturing yields of our third party foundries and assembly and test facilities, and other problems or delays in the fabrication, assembly, testing or delivery of our products; the risks of producing products with new suppliers and at new fabrication and assembly and test facilities; problems or delays that we may face in shifting our products to smaller geometry process technologies; the effectiveness of Intersil’s expense and product cost control and reduction efforts; the risks inherent in acquisitions, including the acquisition of Elantec Semiconductor, Inc. (including integration issues; costs and unanticipated expenditures; changing relationships with customers, suppliers, and strategic partners; potential contractual, employment, and intellectual property issues; and the risks that the anticipated benefits of the acquisition are not realized); intellectual property disputes, customer indemnification claims, and other litigation risks; Intersil’s ability to develop, market, and transition to volume production new products and technologies in a timely manner; the quality of Intersil’s products and any repair or replacement costs; the risks and uncertainties associated with Intersil’s global operations, particularly in light of the war on terrorism; the effects of natural disasters, international conflicts and other events beyond our control; the level of orders received and the ability to fill those orders in a given fiscal quarter; and other factors. 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 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. PRISM is a registered trademark and PRISM GT, PRISM Duette, Elantec and Endura are trademarks of Intersil Americas Inc. and its subsidiaries.
D-Link, NETGEAR and corega 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.
