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Intersil Corporation Reports Fourth Quarter and Fiscal 2006 Financial Results
— Achieves record net revenues of $740.6 million in 2006; 23% increase from 2005
— Achieves record net income of $151.9 million in 2006; 77% increase from 2005
— Generates over $200 million in free cash flow in 2006; 50% increase from 2005
Milpitas, CA, January 24, 2007 – Intersil Corporation (NASDAQ Global Select: ISIL), a world leader in the design and manufacture of high performance analog semiconductors, today reported financial results for the quarter ended December 29, 2006. Net revenues for the fourth quarter were $181.1 million, a 3% increase from $175.6 million in the fourth quarter of 2005 and a 6% decrease from $192.9
million in the third quarter of 2006.
Generally Accepted Accounting Principles (GAAP) Results
For the fourth quarter of 2006, gross margins were 57.8%. This compares to gross margins of 56.5% in the same quarter last year, and 57.5% in the third quarter of 2006. Operating margins were 20.4%, as compared to operating margins of 22.8% in the same quarter last year, and 22.2% in the third quarter of 2006. Net income was $38.8 million, or $0.28 earnings per diluted share, as compared to
net income of $28.7 million, or $0.20 earnings per diluted share in the same quarter last year. For the third quarter of 2006, the Company reported net income of $37.7 million, or $0.27 earnings per diluted share.
For the year ended December 29, 2006, net revenue was $740.6 million, a 23.4% increase from $600.3 million for 2005. Gross margins were 57.4% as compared to 55.8% for the previous year. Operating margins were 20.5% as compared to 16.7% for the previous year. Net income was $151.9 million or $1.07 earnings per diluted share as compared to $85.9 million or $0.59 earnings per diluted share for the previous year.
Non-GAAP Results
For the fourth quarter of 2006, non-GAAP gross margins were 58.2%. This compares to gross margins of 56.6% for the same quarter last year, and 58.0% for the third quarter of 2006. Operating margins were 28.0%, as compared to operating
margins of 26.1% for the same quarter last year, and 29.9% for the third quarter
of 2006. Net income was $48.2 million, or $0.34 earnings per diluted share. This
compares to net income of $39.3 million, or $0.27 earnings per diluted share for
the same quarter last year, and $46.9 million, or $0.33 earnings per diluted
share for the third quarter of 2006.
For the year ended December 29, 2006, gross margins were 57.8% as compared to
55.9% for the previous year. Net income was $179.9 million or $1.25 earnings per
diluted share. This compares to net income of $108.9 million or $0.75 earnings
per diluted share for 2005.
“There is no question 2006 was a really fine year for Intersil,” stated Rich
Beyer, Intersil’s Chief Executive Officer. “We achieved record net revenues of
$740.6 million for the year. Revenues grew 23% and non-GAAP net income grew 65%
over 2005. In addition, we achieved record gross margins of 58.2% for the fourth
quarter. This marks the ninth consecutive quarter that we grew gross margins on
a non-GAAP basis.”
By end market, Intersil’s fourth quarter revenues were as follows: high-end
consumer (29% of revenues), computing (22% of revenues), industrial (25% of
revenues), and communication (24% of revenues). “Revenues in the high-end
consumer market experienced strong sequential growth this quarter due to
increased market acceptance for our products and seasonality normally
experienced in the fourth quarter. We saw a sequential decline in the computing
market, primarily due to excessive inventory at the contract manufacturers in
Asia. The industrial and communications end markets were also down sequentially
due to normal seasonality, excessive inventory in the channel and some weakness
in certain communication related product families. Despite the softness
experienced in the fourth quarter, this was an excellent year for Intersil. We
achieved double digit sequential growth in all four end markets for fiscal year
2006,” said Rich Beyer. “Communications grew the fastest, 27%, followed by
computing, 26%, high-end consumer, 22% and industrial, 19%.”
During the quarter the Company repurchased approximately $100 million or 4.1
million shares of its stock, under a previously announced stock repurchase
program. In 2006, Intersil generated more than $200 million in free cash flow
and returned approximately $324 million to its investors in the form of stock
repurchases and cash dividends.
Business Outlook
“For the first quarter we expect a continuation of the inventory issues
currently affecting our industry,” said Rich Beyer. “We expect the industrial
and communications markets to be sequentially down again due to these issues. As
is traditionally anticipated, high-end consumer and computing revenues are
expected to be sequentially down due mainly to seasonality. As a result, we
currently anticipate Intersil revenues for the first quarter to be between $162M
and $168M. We expect GAAP earnings per diluted share of approximately $0.21 to
$0.23 and non-GAAP earnings per diluted share of approximately $0.27 to $0.29.”
Investors and interested parties within the United States may listen to
Intersil's conference call on January 24th at 1:45 p.m. Pacific/4:45 p.m.
Eastern by dialing (800) 901-5259 using the password “Intersil.” International
callers may connect to the call by dialing (617) 786-4514. A replay of
Intersil’s conference call will be available for two weeks by dialing (888)
286-8010 in the U.S. or (617) 801-6888 internationally using the access code
“93779938". A webcast replay of the conference call will be available for two
weeks on the Company’s web site at
http://www.intersil.com/investor. A copy of this press release may be found
on the Company’s web site at
http://www.intersil.com/investor.
About Intersil
Intersil Corporation is a leader in the design and manufacture of
high-performance analog semiconductors. The Company's products address some of
the industry's fastest growing markets, such as, flat panel displays, cell
phones, other handheld systems, and notebooks. Intersil’s product families
address power management functions and analog signal processing functions.
Intersil products include ICs for battery management, hot-swap and hot-plug
controllers, linear regulators, power sequencers, supervisory ICs, bridge
drivers, PWM controllers, 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 radiation-hardened 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
www.intersil.com.
NON-GAAP REPORTING
In addition to GAAP reporting, Intersil reports net income or loss, as well as
earnings per share, gross margin and operating margin on a non-GAAP basis. This
non-GAAP earnings information excludes stock-based compensation expense,
amortization of intangibles and unusual items and their related tax effects.
Intersil believes this non-GAAP earnings information provides meaningful insight
into the Company’s on-going 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.
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.
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