Exhibit 99.1
| Contact: |
| Brendan Lahiff, Sr. Investor Relations Manager |
| Intersil Corporation |
| (408) 546-3399 |
| investor@intersil.com |
Intersil Corporation Reports Third Quarter Results
Milpitas, CA, October 26, 2011 – 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 30, 2011.
GAAP Results of Operations
Net revenue for the third quarter was $186.8 million, a 14.7% decrease from $219.1 million in the third quarter of 2010, and a 10.7% decrease from $209.1 million in the second quarter of 2011. Intersil’s end market product mix is summarized below:
| End Market | Q3 2011 % of Revenue | Q3 2010 % of Revenue | Q2 2011 % of Revenue |
| Industrial | 27% | 34% | 30% |
| Computing | 27% | 21% | 27% |
| Consumer | 23% | 24% | 22% |
| Communications | 23% | 21% | 21% |
Gross margin for the third quarter was 57.0%, compared with gross margin of 58.9% in the same quarter last year, and 58.2% in the second quarter of 2011.
Operating margin was 10.8% during the third quarter of 2011. Net income for the third quarter of 2011 decreased to $7.2 million, or $0.06 per diluted share, compared with $32.1 million, or $0.26 per diluted share, in the same quarter last year, and net income of $21.8 million, or $0.17 per diluted share, in the second quarter of 2011. GAAP net income in the third quarter included an $8.4 million one-time expense for the extinguishment of long-term debt, which was refinanced during the third quarter.
Non-GAAP Results of Operations
Intersil’s non-GAAP operating income, net income and earnings per share have been revised to exclude the effects of equity-based compensation in addition to intangible amortization, acquisition charges, certain tax adjustments and one-time costs.
Non-GAAP operating income during the third quarter of 2011 was $32.7 million, or 17.5% of revenue. Non-GAAP net income for the third quarter of 2011 was $25.8 million, or $0.20 per diluted share.
“Broad-based weakness, along with continued inventory reduction, weighed heavily on our shipments during the third quarter,” said Dave Bell, President and Chief Executive Officer. “Each of our end markets experienced lower demand than we forecasted in July, but met our expectations given in early September,” said Bell.
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Exhibit 99.1
At the end of the third quarter, Intersil’s cash and short-term investments totaled approximately $420.8 million. Free cash flow was $24.8 million during the third quarter of 2011.
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 25, 2011 to shareholders of record as of the close of business on November 15, 2011.
Fourth Quarter 2011 Outlook
| · | Revenue is expected to be between $162 million and $170 million (-9% to -13% sequentially) |
| · | R&D expenses are expected to be approximately $44 million ($40.5 million excluding equity-based compensation) |
| · | SG&A expenses are expected to be approximately $34 million ($30.7 million excluding equity-based compensation) |
| · | Total equity-based compensation is expected to be approximately $7.2 million |
| · | Amortization of intangibles is expected to be approximately $7.0 million |
| · | GAAP earnings per diluted share are expected to be between $0.04 and $0.07 |
| · | Non-GAAP earnings per diluted share (excluding amortization of intangibles, one-time items and equity-based compensation) are expected to be between $0.14 and $0.17 |
“With the downturn now expected to continue through the remainder of 2011, we will carefully control our spending during the fourth quarter. However, we will continue to focus investment in our top priority programs to drive long-term growth. Significant increases in design wins are validating our strategy,” said Bell.
Intersil will discuss its third quarter 2011 financial results during its scheduled conference call following the market close on October 26th. To participate in the conference call please dial (800) 510-0178, and international participants please dial (617) 614-3450, using the password 98241841 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 presentation accompanying the conference call is also available on Intersil’s website.
A replay of the call will be available for two weeks following the conference call on Intersil’s website, or may be accessed by dialing (888) 286-8010, international dial (617) 801-6888, using the password 48626736.
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 communications, computing, high-end consumer and industrial electronics markets. 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.
About Non-GAAP Financial Results
The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the reconciliations of such measures in the tables on page eight at the end of this release. Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Management believes that these 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 Intersil’s 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.
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Exhibit 99.1
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.
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Exhibit 99.1
| Intersil Corporation | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
| Unaudited | ||||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||||
| Quarter Ended | Three Quarters Ended | |||||||||||||||||||
| Sep. 30, | Oct. 1, | Jul. 1, | Sep. 30, | Oct. 1, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2011 | 2010 | ||||||||||||||||
| Q3 2011 | Q3 2010 | Q2 2011 | YTD | YTD | ||||||||||||||||
| Net revenue | $ | 186.8 | $ | 219.1 | $ | 209.1 | $ | 594.7 | $ | 628.4 | ||||||||||
| Cost of revenue | 80.2 | 90.1 | 87.3 | 251.4 | 264.2 | |||||||||||||||
| Gross profit | 106.5 | 129.1 | 121.8 | 343.4 | 364.2 | |||||||||||||||
| Gross margin | 57.0 | % | 58.9 | % | 58.2 | % | 57.7 | % | 58.0 | % | ||||||||||
| Expenses | ||||||||||||||||||||
| Research and development | 45.7 | 47.5 | 47.8 | 143.1 | 136.4 | |||||||||||||||
| Selling, general and administrative | 34.2 | 33.4 | 36.2 | 105.5 | 100.6 | |||||||||||||||
| Amortization of purchased intangibles | 6.5 | 9.3 | 6.7 | 20.1 | 20.3 | |||||||||||||||
| Restructuring-related costs | - | - | 0.1 | 2.4 | - | |||||||||||||||
| Acquisition-related costs | - | 0.4 | - | 0.3 | 7.9 | |||||||||||||||
| Operating income | 20.1 | 38.4 | 31.0 | 71.9 | 99.0 | |||||||||||||||
| (Loss) gain on deferred comp investments | (1.1 | ) | 0.2 | - | (0.9 | ) | 0.3 | |||||||||||||
| Other-than-temporary impairment | - | - | - | - | (1.2 | ) | ||||||||||||||
| Interest income | 0.7 | 0.8 | 0.7 | 2.2 | 2.3 | |||||||||||||||
| Loss on extinguishment of debt | (8.4 | ) | - | - | (8.4 | ) | - | |||||||||||||
| Interest expense and fees | (3.8 | ) | (4.2 | ) | (4.2 | ) | (12.5 | ) | (7.6 | ) | ||||||||||
| Income before income taxes | 7.5 | 35.2 | 27.5 | 52.2 | 92.9 | |||||||||||||||
| Income tax expense | 0.3 | 3.2 | 5.7 | 9.1 | 92.6 | |||||||||||||||
| Net income | $ | 7.2 | $ | 32.1 | $ | 21.8 | $ | 43.1 | $ | 0.3 | ||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 0.06 | $ | 0.26 | $ | 0.17 | $ | 0.34 | $ | - | ||||||||||
| Diluted | $ | 0.06 | $ | 0.26 | $ | 0.17 | $ | 0.34 | $ | - | ||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 125.9 | 123.9 | 125.7 | 125.7 | 123.5 | |||||||||||||||
| Diluted | 126.0 | 124.0 | 126.0 | 126.0 | 124.5 | |||||||||||||||
| Note: Totals and percentages may not add or calculate precisely due to rounding. | ||||||||||||||||||||
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Exhibit 99.1
| Condensed Consolidated Balance Sheets | ||||||||
| Unaudited | ||||||||
| (In millions) | ||||||||
| Sep. 30, | Dec. 31, | |||||||
| 2011 | 2010 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and short-term investments | $ | 420.8 | $ | 383.0 | ||||
| Trade receivables, net | 68.5 | 88.7 | ||||||
| Inventories | 103.5 | 102.0 | ||||||
| Prepaid expenses and other current assets | 16.6 | 17.1 | ||||||
| Income taxes receivable | 4.5 | 3.6 | ||||||
| Deferred income taxes | 19.2 | 19.2 | ||||||
| Total current assets | 633.0 | 613.6 | ||||||
| Non-current assets: | ||||||||
| Property, plant and equipment, net | 94.8 | 103.5 | ||||||
| Purchased intangibles, net | 118.9 | 139.0 | ||||||
| Goodwill | 566.5 | 565.1 | ||||||
| Deferred income taxes | 89.0 | 93.9 | ||||||
| Long-term investments | 63.8 | 69.3 | ||||||
| Other | 87.0 | 88.1 | ||||||
| Total non-current assets | 1,019.9 | 1,058.9 | ||||||
| Total assets | $ | 1,652.9 | $ | 1,672.5 | ||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | 32.1 | $ | 40.7 | ||||
| Deferred net revenue | 9.3 | 13.0 | ||||||
| Other accrued items | 68.0 | 96.6 | ||||||
| Total current liabilities | 109.4 | 150.3 | ||||||
| Non-current liabilities: | ||||||||
| Long-term debt | 278.2 | 275.0 | ||||||
| Income tax payable | 167.1 | 166.8 | ||||||
| Other non-current liabilities | 30.0 | 36.2 | ||||||
| Total non-current liabilities | 475.3 | 478.0 | ||||||
| Total shareholders' equity | 1,068.2 | 1,044.2 | ||||||
| Total liabilities and shareholders' equity | $ | 1,652.9 | $ | 1,672.5 | ||||
| Note: Totals and percentages may not add or calculate precisely due to rounding. | ||||||||
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Exhibit 99.1
| Intersil Corporation | ||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||
| Unaudited | ||||||||||||
| (In millions) | ||||||||||||
| Quarter Ended | ||||||||||||
| Sep. 30, | Oct. 1, | Jul. 1, | ||||||||||
| 2011 | 2010 | 2011 | ||||||||||
| Q3 2011 | Q3 2010 | Q2 2011 | ||||||||||
| Operating activities: | ||||||||||||
| Net income | $ | 7.2 | $ | 32.1 | $ | 21.8 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation | 5.8 | 5.4 | 5.6 | |||||||||
| Amortization of purchased intangibles | 6.5 | 9.3 | 6.7 | |||||||||
| Equity-based compensation | 7.1 | 8.6 | 9.3 | |||||||||
| Provision for inventory obsolescence | 1.4 | 0.5 | 2.8 | |||||||||
| Settlement of interest rate swap | (3.0 | ) | - | - | ||||||||
| Loss on extinguishment of debt | 8.4 | - | - | |||||||||
| Other | - | 0.1 | (0.1 | ) | ||||||||
| Deferred income taxes | - | (51.7 | ) | 2.7 | ||||||||
| Net changes in operating assets and liabilities | (5.2 | ) | 40.2 | 0.4 | ||||||||
| Net cash provided by operating activities | 28.3 | 44.5 | 49.2 | |||||||||
| Investing activities: | ||||||||||||
| Purchases of investments | (4.8 | ) | - | (29.0 | ) | |||||||
| Proceeds from sales or issuer calls of long-term investments | - | 6.8 | - | |||||||||
| Cash paid for acquired businesses, net of acquired cash | - | (1.4 | ) | - | ||||||||
| Net capital expenditures | (3.5 | ) | (6.5 | ) | (3.5 | ) | ||||||
| Net cash used in investing activities | (8.2 | ) | (1.1 | ) | (32.5 | ) | ||||||
| Financing activities: | ||||||||||||
| Proceeds and tax benefit from equity-based awards | 3.0 | 2.8 | (1.3 | ) | ||||||||
| Proceeds from issuance of long-term debt | 278.2 | - | - | |||||||||
| Fees on revolver line | (3.2 | ) | - | - | ||||||||
| Repayments of long-term debt | (278.2 | ) | (0.8 | ) | - | |||||||
| Dividends paid | (15.3 | ) | (14.9 | ) | (15.7 | ) | ||||||
| Net cash used in financing activities | (15.5 | ) | (12.8 | ) | (17.0 | ) | ||||||
| Effect of exchange rates on cash and cash equivalents | (0.7 | ) | 0.4 | 0.5 | ||||||||
| Net increase in cash and cash equivalents | 3.9 | 30.9 | 0.1 | |||||||||
| Cash and equivalents as of the beginning of the period | 390.4 | 339.5 | 390.3 | |||||||||
| Cash and equivalents as of the end of the period | $ | 394.3 | $ | 370.4 | $ | 390.4 | ||||||
| Note: Totals and percentages may not add or calculate precisely due to rounding. | ||||||||||||
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Exhibit 99.1
| Intersil Corporation | ||||||||||||
Additional Financial Information | ||||||||||||
| Unaudited | ||||||||||||
| (In millions, except percentages and per share amounts) | ||||||||||||
| Quarter Ended | ||||||||||||
| Sep. 30, | Oct. 1, | Jul. 1, | ||||||||||
| 2011 | 2010 | 2011 | ||||||||||
| Q3 2011 | Q3 2010 | Q2 2011 | ||||||||||
| EBITDA: | ||||||||||||
| Operating income | $ | 20.1 | $ | 38.4 | $ | 31.0 | ||||||
| Depreciation | 5.8 | 5.4 | 5.6 | |||||||||
| Amortization of purchased intangibles | 6.5 | 9.3 | 6.7 | |||||||||
| Equity-based compensation | 7.1 | 8.6 | 9.3 | |||||||||
| EBITDA | $ | 39.5 | $ | 61.7 | $ | 52.6 | ||||||
| Equity-based compensation expense by classification: | ||||||||||||
| Cost of revenue | $ | 0.4 | $ | 0.6 | $ | 0.6 | ||||||
| Research and development | 3.7 | 4.2 | 4.6 | |||||||||
| Selling, general and administrative | 3.1 | 3.8 | 4.1 | |||||||||
| Six-month backlog | $ | 141.3 | $ | 167.2 | $ | 174.8 | ||||||
| Revenue by end market: | ||||||||||||
| Industrial | $ | 50.3 | $ | 75.4 | $ | 63.5 | ||||||
| Computing | 50.5 | 46.4 | 55.9 | |||||||||
| Consumer | 43.3 | 51.8 | 46.5 | |||||||||
| Communications | 42.7 | 45.5 | 43.2 | |||||||||
| Total revenue | $ | 186.8 | $ | 219.1 | $ | 209.1 | ||||||
| Free cash flow: | ||||||||||||
| Cash flow from operations | $ | 28.3 | $ | 44.5 | $ | 49.2 | ||||||
| Net capital expenditures | 3.5 | 6.5 | 3.5 | |||||||||
| Free cash flow: | $ | 24.8 | $ | 38.0 | $ | 45.7 | ||||||
| Note: Totals and percentages may not add or calculate precisely due to rounding. | ||||||||||||
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Exhibit 99.1
| Intersil Corporation | ||||||||||||
| Non-GAAP Results | ||||||||||||
| Unaudited | ||||||||||||
| (In millions, except percentages and per share amounts) | ||||||||||||
| Quarter Ended | ||||||||||||
| Sep. 30, | Oct. 1, | Jul. 1, | ||||||||||
| 2011 | 2010 | 2011 | ||||||||||
| Q3 2011 | Q3 2010 | Q2 2011 | ||||||||||
| Non-GAAP operating income: | ||||||||||||
| GAAP operating income | $ | 20.1 | $ | 38.4 | $ | 31.0 | ||||||
| Restructuring-related costs | - | - | 0.1 | |||||||||
| Acquisition-related costs | - | 0.4 | - | |||||||||
| Deferred compensation (benefit) expense | (1.0 | ) | 0.3 | 0.1 | ||||||||
| Equity-based compensation | 7.1 | 8.6 | 9.3 | |||||||||
| Amortization of purchased intangibles | 6.5 | 9.3 | 6.7 | |||||||||
| Non-GAAP operating income: | $ | 32.7 | $ | 57.0 | $ | 47.2 | ||||||
| Revenue | $ | 186.8 | $ | 219.1 | $ | 209.1 | ||||||
| Non-GAAP Operating Margin | ||||||||||||
| GAAP operating margin | 10.8 | % | 17.5 | % | 14.8 | % | ||||||
| Excluded items as a percent of revenue | 6.7 | % | 8.5 | % | 7.8 | % | ||||||
| Non-GAAP operating margin | 17.5 | % | 26.0 | % | 22.6 | % | ||||||
| Non-GAAP net income: | ||||||||||||
| GAAP net income | $ | 7.2 | $ | 32.1 | $ | 21.8 | ||||||
| Tax adjustments from non-cash and discrete items | (3.4 | ) | (4.9 | ) | (0.6 | ) | ||||||
| Restructuring-related costs | - | - | 0.1 | |||||||||
| Loss on extinguishment of debt | 8.4 | - | - | |||||||||
| Acquisition-related costs | - | 0.4 | - | |||||||||
| Equity-based compensation | 7.1 | 8.6 | 9.3 | |||||||||
| Amortization of purchased intangibles | 6.5 | 9.3 | 6.7 | |||||||||
| Non-GAAP net income | $ | 25.8 | $ | 45.4 | $ | 37.3 | ||||||
| Diluted shares outstanding | 126.0 | 124.0 | 126.0 | |||||||||
| Non-GAAP earnings per share | ||||||||||||
| GAAP earnings per share | $ | 0.06 | $ | 0.26 | $ | 0.17 | ||||||
| Excluded items per share impact | 0.14 | 0.11 | 0.13 | |||||||||
| Non-GAAP earnings per share | $ | 0.20 | $ | 0.37 | $ | 0.30 | ||||||
| Non-GAAP results exclude restructuring-related costs, acquisition-related expenses, loss on extinguishment of debt, equity-based compensation, amortization of purchased intangibles and related tax benefits. Prior periods have been adjusted to reflect the current period presentation, which excludes equity-based compensation. | ||||||||||||
| Note: Totals and percentages may not add or calculate precisely due to rounding. | ||||||||||||
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