Press Releases
Intersil Corporation Reports Third Quarter 2012 Results

• Operating income aided by income from Intellectual Property (IP) agreement totaling $13.4 million
• Board of Directors authorizes $0.12 per share quarterly dividend

Milpitas, CA, October 24, 2012 – Intersil Corporation (NASDAQ Global Select: ISIL), 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 September 28, 2012.

GAAP Results of Operations

Net revenue for the third quarter of 2012 was $151.4 million, a 18.9% decrease from $186.8 million in the third quarter of 2011, and a 7.1% decrease from $163.0 million in the second quarter of 2012. Changes in Intersil’s third quarter end market product mix are summarized below.

*Notes: Revenue in millions of dollars, Percentages may not calculate precisely due to rounding

Gross margin for the third quarter of 2012 was 54.1%, compared with gross margin of 57.0% in the same quarter last year, and slightly lower than the second quarter of 2012 at 54.5%. 

Operating income was $19.2 million or 12.7% of revenue during the third quarter of 2012. Net income for the third quarter of 2012 was $2.0 million, or $0.02 per diluted share, compared with net income of $7.2 million, or $0.06 per diluted share, in the same quarter last year, and net loss of $14.5 million, or $0.11 per share, in the second quarter of 2012. Net income during the third quarter of 2012 was positively impacted by the completion of a non-recurring, $13.4 million agreement resolving a patent and trade secret dispute with another semiconductor company.

Non-GAAP Results of Operations

Non-GAAP results exclude restructuring-related costs, acquisition-related expenses, losses and impairments on investments, unusual items, equity-based compensation, amortization of purchased intangibles and related tax effects.

Non-GAAP operating income during the third quarter of 2012 was $18.9 million, or 12.5% of revenue. Non-GAAP net income for the third quarter of 2012 was $13.1 million, or $0.10 per diluted share.

“We anticipated weakness in the semiconductor market and substantially reduced our operating expenses as we entered the third quarter,” said Dave Bell, President and Chief Executive Officer. “This restructuring helped our profitability in the third quarter; however, the surprisingly sharp decline in the personal computing market led to lower overall revenue.”

At the end of the third quarter, Intersil’s cash and short-term investments totaled $321.9 million. Free cash flow was $21.7 million during the third quarter and the Company repurchased approximately 690,500 shares of its common stock.

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 23, 2012 to shareholders of record as of the close of business on November 13, 2012.

Fourth Quarter 2012 Outlook

• Revenue is expected to be approximately $138 million, +/- $3 million
• Gross margin is expected to be flat to slightly down
• R&D expenses are expected to be approximately $38 million ($36 million excluding equity-based compensation)
• SG&A expenses are expected to be approximately $30 million ($27 million excluding equity-based compensation)
• Total equity-based compensation is expected to be approximately $5.3 million
• Amortization of intangibles is expected to be approximately $6.7 million
• GAAP loss per share is expected to be approximately $(0.09) at revenue midpoint
• Non-GAAP earnings per diluted share are expected to be approximately $0.06 at revenue midpoint

“We expect continued softness in the fourth quarter; consequently, we are forecasting sub-seasonal revenue,” said Bell. “However, we continue to believe several of our Top Ten Growth Drivers will materially contribute to revenue in early 2013, with some drivers beginning to ramp by the end of this year.”

Intersil will discuss its third quarter 2012 financial results during its scheduled conference call following market close on October 24, 2012. To participate in the conference call, please dial (866) 700-6293, and international participants please dial (617) 213-8835, using the password 49837519 at approximately 1:40 p.m. Pacific Time. You may also listen to the call via webcast on Intersil’s investor relations website: ir.intersil.com.  A copy of the prepared remarks and presentation accompanying the conference call is also available on Intersil’s investor relations website.

A replay of the earnings conference call will be available on Intersil’s website, or may be accessed for two weeks by dialing (888) 286-8010, international dial (617) 801-6888, using the password 47121933.

About Intersil
Intersil 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 industrial and infrastructure, personal computing and high-end consumer markets. For more information about Intersil or to find out how to become a member of our winning team, visit our website and career page at www.intersil.com.

About Non-GAAP Financial Results
The presentation of non-GAAP financial information is intended to be considered together with the financial information prepared and presented in accordance with GAAP. For more information on non-GAAP financial measures, please see the reconciliations of such measures in the tables on page eight of this release.  Management uses non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that non-GAAP financial measures provide meaningful supplemental information regarding Intersil’s performance and liquidity by excluding certain expenses and expenditures that may not be indicative of recurring core business operating results. During the quarter ended July 1, 2011, we revised current quarter and historical presentation of non-GAAP financial information to exclude equity-based compensation in addition to previously excluded intangible amortization, acquisition charges, certain tax adjustments and one-time costs.  Management feels this change aligns our non-GAAP presentation with that of our closest peers and increases comparability of our results with published earnings estimates widely available on the Internet.

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’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.