News & Events
Intersil Corporation Reports Third Quarter 2004 Revenue and Earnings

Milpitas, CA, October 20, 2004 – Intersil Corporation (NASDAQ: ISIL), a world leader in the design and manufacture of high performance analog semiconductors, today reported financial results for the third quarter ended October 1, 2004. Net revenue was $127.0 million, a decrease of 3% from the third quarter of 2003 and a decrease of 12% from the second quarter of 2004. On a generally accepted accounting principles (GAAP) basis, primarily as a result of the Xicor acquisition-related expenses, the company reported a net loss of $24.5 million or $0.17 per diluted share of common stock for the third quarter of 2004. For the third quarter of 2003 net income from continuing operations was $2.8 million or $0.02 per diluted share. For the second quarter of 2004 net income was $27.2 million or $0.19 per diluted share.

In addition to GAAP reporting, Intersil reports operating and net income or loss, as well as earnings per share, on a non-GAAP basis. This non-GAAP earnings information excludes amortization of intangibles and other unusual items, such as gains or losses on strategic investments or exited product groups, impairment and restructuring costs and related tax effects. Intersil believes this non-GAAP earnings information provides meaningful insight into the company’s ongoing 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’s operations and to determine incentive compensation. A reconciliation between GAAP and non-GAAP net income is included in the tables below.

Non-GAAP net income for the third quarter was $16.2 million or $0.11 per diluted share of common stock. This compares to non-GAAP net income of $22.7 million or $0.16 per diluted share for the third quarter of 2003 and $27.9 million or $0.20 per diluted share for the second quarter of 2004.

“The third quarter was difficult for Intersil, as our communications and computing businesses were both impacted by customer inventory adjustments, and we were further challenged with business disruption by two hurricanes at our Palm Bay, Florida facilities,” said Rich Beyer, Intersil’s president and CEO. “However, we were encouraged by the continued growth in our high-end consumer business, driven primarily by our power management products for handhelds and our continued leadership position in optical storage. We are also very pleased with the performance of the Xicor product families.”

By end market, Intersil’s third quarter sales were as follows: high-end consumer (23% of sales), computing (24%), industrial (29%) and communications (24%). The company reported gross margins of 55.1% for the quarter, while also decreasing inventory in its base Intersil business. Intersil generated over $34 million in cash flow from operations and exited the quarter with $735 million in cash and marketable investments.

As a result of Intersil’s continued positive cash flow and strong balance sheet position, in September, the company’s board of directors declared and authorized its quarterly dividend of $0.04 per share of common stock. This dividend reflects a 33% increase from the quarterly per share rate that the company had previously paid over the past year. Payment of the dividend will be made on November 19, 2004, to shareholders of record as of the close of business on November 10, 2004. During the quarter, the company announced that its board of directors had authorized an increase of $150 million to the stock repurchase program, and bought back approximately $39 million, or 2.3 million shares of stock.

Business Outlook
Looking ahead to the fourth quarter, Beyer said, “Based on the current business environment, we expect fourth quarter revenue to remain approximately flat with the third quarter. We anticipate improvement in our gross margins and expect earnings per share of $0.11 to 0.12. We remain confident in the long term strategy of Intersil,” concluded Beyer. “During the quarter, we completed the acquisition of Xicor and have successfully integrated its business into Intersil. As part of this, we put in place a new management structure and realigned our product line organizations. These changes will strengthen our focus on high performance analog leadership, and will position us for future success.”

Investors and interested parties within the United States may listen to Intersil's conference call on October 20 at 4:45 p.m. Eastern/1:45 p.m. Pacific by dialing (800) 619-3328 and providing the operator with the conference and the pass code “INTERSIL.” International callers may connect to the call by dialing (712) 257-2114. A replay of Intersil’s conference call will be available for one week beginning on October 20 at 9:00 p.m. Eastern/ 6:00 p.m. Pacific by calling (866) 434-5267 in the U.S. or (203) 369-1008 internationally. No confirmation code is required for the replay. A live webcast will also be available on Intersil’s Investor Relations homepage at http://www.intersil.com/investor and a replay will be available until October 27, 2004. A copy of this press release may be found on Intersil’s website at http://www.intersil.com/cda/pressroom.

About Intersil
Intersil Corporation, a NASDAQ-100 Index company, is a leader in the design and manufacture of high performance analog semiconductors. The company’s products address three of the industry’s fastest growing markets: flat panel displays, optical storage (CD and DVD recordable) and power management. Intersil products include power management devices for battery management, hot-swap and hot-plug controllers, linear regulators, supervisory ICs, 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 rad-hard 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 http://www.intersil.com/.

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.