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Out Perform
2007 ANNUAL REPORT
Intersil Corporation |
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Fellow
Shareholders,
Fiscal 2007 marked another year of exceptional
performance and progress for Intersil. We continued
to grow faster than our peers and prospered in a
demanding business environment. Our accomplishments
in 2007 demonstrated that our business model and
product strategy provide an excellent foundation for
continued success. With this in mind, I am sure that
each and every shareholder will be pleased to
hear that, while the leadership at Intersil has
changed, our business strategy has not. As CEO of
Intersil, my primary focus will be to continue
improving the execution of our already proven
strategy.
Over the past five years Intersil has achieved its
goal of becoming a premier high-performance analog
company with a strategy that balances our business
across four diverse market segments—consumer,
computing, industrial and communications—and product
families that feature both highly-differentiated
application specific products and general purpose
proprietary products.
Despite a challenging business environment in the
high-performance analog space, Intersil grew
revenues faster than our peers. We achieved $757
million in net revenues, growing 2% over the
previous year in a soft analog market. We are
clearly executing well and providing significant
returns to our shareholders.
Our high-end consumer market had a strong year with
revenue in this segment increasing 8%
year-over-year. Our success was driven by increasing
dollar content in handheld consumer products. In
addition, as consumers demand more mobility, we have
seen an increasing number of new and innovative
handheld applications. Revenue from our products
sold into the LCD display market also increased
significantly and is expected to continue growing for
the next several years.
Intersil is recognized as the leader in
high-performance notebook and desktop power and
server power management. Annual revenue in our
computing market increased 12% over the previous
year. Our dollar content as well as market share
increased significantly this year for notebook power
management products.
In the early part of 2007, an inventory correction
drove weakness in our industrial and communication
infrastructure markets. However, we maintained a
disciplined investment strategy, devoting a
disproportionate amount of our research and
development dollars to products aimed at these
markets. Our design wins increased significantly with
this investment strategy, and we believe that we are
well positioned to see better than industry growth
when these markets recover.
Significant operational milestones were achieved in
2007. We expanded our product portfolio with the
acquisition of Planet ATE, a fabless semiconductor
supplier to the automated test equipment (ATE)
market. The ATE business achieved record net
revenues in 2007 and we see tremendous opportunity
to broaden our customer base and increase the dollar
content with existing customers. We also opened a
new design center in Hyderabad, India that will help
us accelerate our new product development and
support the expansion of our footprint in the Asia-Pacific
region.
Outstanding Profitability
We continue to focus on improving profitability. In
2007, we maintained stable gross and operating
margins, approximately 57% and 20%, respectively.
Our cash generation model remains intact as we
generated over $214 million in free cash flow for the
year. We have been committed to providing excellent
returns to our shareholders. To this end, we
returned more than $480 million in cash to our
shareholders through share repurchases and quarterly
dividends during 2007.
In summary, Intersil achieved steady, well-managed
growth in 2007 in the midst of a challenging market
environment. It is clear that our business model is
successful, and as we look to 2008, we will remain
focused on developing industry-leading products and
growing revenues faster than the analog sector. We
are optimistic about our long-term growth
opportunities and expect solid growth across
numerous product families during the next year.
In February 2008, I took the reigns from Rich Beyer,
whose leadership over the last five years provided
the foundation for Intersil’s recent success. During
Rich’s tenure, Intersil has clearly transformed
itself into one of the best high-performance analog
companies in the world and you can expect my focus
to be on continuing that level of performance in the
coming years.
Finally, I want to thank all of Intersil’s talented
and dedicated employees around the world, who are
committed to our success and who bring unique value
and outstanding service to our customers.
On behalf of the management team at Intersil, we
thank you for your continued support.
Sincerely,

David Bell
President and Chief Executive Officer |
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Intersil Corporation 10K report for the fiscal year ended
December 28, 2007 |
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Exhibit 21
SUBSIDIARIES OF REGISTRANT |
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INTERSIL CORPORATION
SUBSIDIARIES OF REGISTRANT
AT FEBRUARY 15, 2008 |
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| Subsidiary Name |
State or Other Jurisdiction
of Incorporation
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| U.S. | |
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| Intersil Communications, Inc.
| Delaware |
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| Elantec Semiconductor, Inc.
| Delaware |
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| Intersil Americas Inc. | Delaware |
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| Intersil Investment Company
| Delaware |
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| Xicor LLC
| Delaware |
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| Poweready, Inc.
| Delaware |
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| Analog Integration Partners, LLC
| Delaware |
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| Xicor, Inc. Integration Holding Company
| Delaware |
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| Planet ATE, Inc. | California |
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| Asia | |
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| Elantec Semiconductor Malaysia Sdn. Bhd.
| Malaysia |
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| Intersil China Limited | Hong Kong, PRC |
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| Intersil K. K. | Japan |
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| Intersil YH | Korea |
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| Intersil Advanced Technology (Labuan) Ltd.
| Federation of Labuan, Malaysia |
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| Intersil Services Company Sdn. Bhd.
| Malaysia |
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| Intersil Pte. Ltd. | Singapore |
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| Intersil Ltd. | Taiwan |
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| Intersil Analog Services Pvt. Ltd.
| India |
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| Europe | |
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| Intersil S.A. | Belgium |
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| Intersil Sarl | France |
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| Intersil GmbH | Germany |
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| Intersil Srl | Italy |
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| Intersil Holding GmbH | Switzerland |
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| Intersil Europe Sarl | Switzerland |
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| Intersil Wireless B.V. | The Netherlands |
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| Intersil Limited | United Kingdom |
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| Xicor, GmbH | Germany |
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| Intersil Luxembourg Participations Sarl
| Luxembourg |
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| Elantec Semiconductor U.K. Limited
| United Kingdom |
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| Intersil Swiss Holding Sarl
| Switzerland/Delaware |
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Exhibit 23.1
Consent of Independent Registered
Public Accounting Firm
The Board of Directors
Intersil Corporation:
We consent to the incorporation by reference in the
registration statements on Form S-4 (Nos. 333-35052 and
333-46984) and Form S-8 (Nos. 333-117890, 333-88208,
333-31094, 333-50718, 333-50722 and 333-65804) of Intersil
Corporation and subsidiaries of our reports dated February
22, 2008, with respect to the consolidated balance sheets of
Intersil Corporation and subsidiaries as of December 28,
2007, and December 29, 2006, and the related consolidated
statements of operations, shareholders’ equity,
comprehensive income and cash flows for each of the years in
the two year period ended December 28, 2007, and the related
financial statement schedule for each of the years in the
two year period ended December 28, 2007, and the
effectiveness of internal control over financial reporting
as of December 28, 2007, which reports appear in the
December 28, 2007, annual report on Form 10-K of Intersil
Corporation and subsidiaries.
Our report with respect to the consolidated financial
statements of Intersil Corporation and subsidiaries refers
to Intersil Corporation and subsidiaries’ adoption of the
provisions of Financial Accounting Standards Board
Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes”, effective December 30, 2006, and also the provisions
of Statement of Financial Accounting Standard (SFAS) No.
123R, “Share-Based Payment,” effective December 31, 2005,
applying the modified prospective method.
KPMG LLP
February 22, 2008
Orlando, Florida
Certified Public Accountants |
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Exhibit 23.2
Consent of Independent Registered
Public Accounting Firm
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 333-117890) pertaining
to the Xicor, Inc. 1998 Employee Stock Purchase Plan, Xicor,
Inc. 1990 Incentive and Non-incentive Stock Option Plan,
Xicor, Inc. 1998 Nonstatutory Stock Option Plan, Xicor, Inc.
2002 Stock Option Plan, Xicor, Inc. 2000 Director Option
Plan, Xicor, Inc. 1995 Director Option Plan, (Form S-8 No.
333-88208) pertaining to the Elantec Semiconductor, Inc.
1983 Stock Option Plan, Elantec Semiconductor, Inc. 1994
Equity Incentive Plan, Elantec Semiconductor, Inc. 1995
Employee Stock Purchase Plan, Elantec Semiconductor, Inc.
1995 Equity Incentive Plan and Elantec Semiconductor, Inc.
2001 Equity Incentive Plan, (Form S-8 No. 333-31094)
pertaining to the Intersil Corporation 1999 Equity
Compensation Plan and Intersil Corporation Employee Stock
Purchase Plan, (Form S-8 No. 333-50718) pertaining to the
SiCOM, Inc. 1985 Incentive Stock Option Plan, SiCOM, Inc.
1996 Equity Incentive Plan and Option Issued to Robert W.
Putnam, (Form S-8 No. 333-50722) pertaining to the Employee
Stock Option Plan of No Wires Needed B.V., (Form S-8 No.
333-65804) pertaining to the Intersil Corporation 1999
Equity Compensation Plan, (Form S-4 No. 333-35052) and (Form
S-4 No. 333-46984) and in the related Prospectuses of
Intersil Corporation of our report dated February 28, 2006,
with respect to the consolidated financial statements and
schedule of Intersil Corporation, included in this Annual
Report (Form 10-K) for the year ended December 28, 2007.
/s/ Ernst & Young LLP
Certified Public Accountants
Fort Lauderdale, Florida
February 21, 2008 |
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Exhibit 31.1
CERTIFICATIONS
I, David B. Bell, certify that:
- I have reviewed this annual report on Form 10-K of
Intersil Corporation;
- Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this annual report;
- Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash
flows of the registrant as of, and for, the periods
presented in this annual report;
- The registrant’s other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this annual report is being prepared;
b) designed such internal control over financial reporting,
or caused such internal control over financial reporting to
be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the registrant’s
disclosure controls and procedures and presented in this
annual report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s
internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal
control over financial reporting; and
- The registrant’s other certifying officers and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the registrant’s
auditors and the audit committee of registrant’s board of
directors (or persons performing the equivalent function):
a) All significant deficiencies and material weaknesses in
the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect
the registrant’s ability to record, process, summarize and
report financial information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant’s internal controls over financial reporting.
/s/ David B. Bell
David B. Bell
President & Chief Executive
Officer |
Date: February 22, 2008 |
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Exhibit 31.2
I, David A. Zinsner, certify that:
- I have reviewed this annual report on Form 10-K of
Intersil Corporation;
- Based on my knowledge, this annual report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this annual report;
- Based on my knowledge, the financial statements, and
other financial information included in this annual
report, fairly present in all material respects the
financial condition, results of operations and cash
flows of the registrant as of, and for, the periods
presented in this annual report;
- The registrant’s other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over
financial reporting (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this annual report is being prepared;
b) designed such internal control over financial
reporting, or caused such internal control over
financial reporting to be designed under our
supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the
preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles;
c) evaluated the effectiveness of the registrant’s
disclosure controls and procedures and presented in this
annual report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of
the period covered by this report based on such
evaluation; and
d) disclosed in this report any change in the
registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal
quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting;
and
- The registrant’s other certifying officers and I
have disclosed, based on our most recent evaluation of
internal controls over financial reporting, to the
registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing
the equivalent function):
a) All significant deficiencies and material weaknesses
in the design or operation of internal controls over
financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant’s internal controls over
financial reporting.
/s/ David B. Bell
David B. Bell
President & Chief Executive
Officer |
Date: February 22, 2008 |
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Exhibit 32
CERTIFICATION
Each of the undersigned hereby certifies, for the
purposes of section 1350 of chapter 63 of title 18 of the
United States Code, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, in his capacity as an
officer of Intersil Corporation (“Intersil”), that the
Annual Report of Intersil on Form 10-K for the period ended
December 28, 2007, fully complies with the requirements of
Section 13(a) of the Securities Exchange Act of 1934 and
that the information contained in such report fairly
presents, in all material respects, the financial condition
and results of operation of Intersil. This written statement
is being furnished to the Securities and Exchange Commission
as an exhibit to such Form 10-K.
| Date: February 22, 2008 | By: | /s/ David B. Bell
David B. Bell
President & Chief Executive
Officer
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| Date: February 22, 2008 | By: | /s/ David A. Zinsner
David A. Zinsner
Chief Financial Officer |
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BOARD OF DIRECTORS
Gary E. Gist, Chairman, Board of Directors
President & Chief Executive Officer,
Palomar Companies LLC
David B. Bell, Director
President & Chief Executive Officer,
Intersil Corporation
Robert W. Conn, Ph.D., Director
Managing Director,
Enterprise Partners Venture Capital
James V. Diller, Director
Previous Chairman of the Board,
Elantec Semiconductor, Inc.
Mercedes Johnson, Director
Sr. Vice President & Chief Financial Officer,
Avago Technologies
Gregory Lang, Director
President & Chief Executive Officer,
Integrated Device Technology, Inc.
Jan Peeters, Director
Chairman and Chief Executive Officer,
Olameter Inc.
Robert N. Pokelwaldt, Director
Retired Chairman and Chief Executive Officer,
YORK International Corporation
James A. Urry, Director
Partner, Court Square Capital
INTERSIL EXECUTIVE OFFICERS
AND KEY CONTACTS
David B. Bell
President & Chief Executive Officer
David A. Zinsner
Vice President & Chief Financial Officer
Michael Althar
Vice President/General Manager,
Specialty Products Group
Terry Brophy
Vice President, Information Systems
Susan Hardman
Vice President/General Manager,
Analog and Mixed Signal Products Group
Vern Kelley
Vice President, Human Resources
Jonathan Kennedy
Corporate Controller
Carlos Laber
Vice President, Worldwide Technology
Davin Lee
Vice President/General Manager,
Automotive, Industrial & Communications
Power Products Group
John Lisi
Corporate Treasurer
Peter Oaklander
Senior Vice President, Worldwide Sales
Sagar Pushpala
Vice President, Worldwide Operations
Andrew Rhind
Vice President/General Manager,
Consumer Power Products Group
Paul Sferrazza
Vice President/General Manager,
Computing Power Products Group
Thomas C. Tokos
Vice President, General Counsel
& Corporate Secretary |
INTERSIL FELLOWS
Mike Church
Sandy Fairgrieve
Barry Harvey
Bob Isham
Jason Lin
Larry Pearce
Joe Pierret
INVESTOR RELATIONS
Please contact the Investor Relations department for
any investment related questions or to receive
additional copies of this report, our annual report
on form 10-K, or other financial information free of
charge.
Call us at 1-888-468-3774 or write to us at:
Investor Relations
Intersil Corporation
1001 Murphy Ranch Road
Milpitas, CA 95035
Or send an email to:
investor@intersil.com
INDEPENDENT AUDITORS
KPMG, LLP
SHAREHOLDER INFORMATION
Our transfer agent can assist you in affecting a
change in address or replacing lost stock certificates,
as well as a variety of other services:
American Stock Transfer & Trust Co.
59 Maiden Lane, Plaza Level
New York, NY 10038
Phone: 1-800-937-5449
Email:
info@amstock.com
DESIGN CENTERS
Irvine, CA
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More information is available on the Internet at
www.intersil.com
Intersil trades on the NASDAQ Global Select under
the ticker symbol ISIL.
Printed in USA/08
© 2008 Intersil Americas Inc.
All rights reserved
Intersil and the Intersil logo are trademarks of
Intersil Americas, Inc. Other trademarks mentioned
are the property of their respective owner. |
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