1
Exhibit 99.2
INTERSIL ANNOUNCES RECORD FOURTH QUARTER EARNINGS
- -Adjusted earnings per share (EPS) improve to $0.26
- -PRISM(R) Wireless sales grow 20% sequentially
- -Overall gross margins improve 190 basis points to 48.2%
IRVINE, Calif. - January 23, 2001 - Intersil Holding Corporation (NASDAQ:ISIL)
today reported financial results for the quarter ended December 29, 2000.
Compared to the same period in the prior year, orders were up 16% and sales
grew 37% to $216.8 million. Adjusted net income, before amortization and
one-time charges, rose to a record $27.9 million or 26 cents per diluted share
of common stock.
"The fourth quarter completed our first year as an independent company, during
which we made outstanding progress," said Greg Williams, Intersil's President
and CEO. "We grew revenue 38% to approximately $800 million in calendar year
2000 and improved gross margins by over 830 basis points from the end of
calendar year 1999. During the fourth quarter, we were particularly pleased with
the growth in our PRISM(R) Wireless business, which accounted for more than 24%
of total Intersil revenues. We also completed the acquisition of broadband
wireless access leader SiCOM, adding competencies to enable wireless
point-to-point transmissions at speeds up to 155Mbps."
Intersil's gross margins improved 190 basis points over the previous quarter to
48.2%, resulting from a richer mix of communications products. Intersil also
achieved significant improvement in its balance sheet during the quarter,
maintaining a cash position of more than $350 million while reducing long-term
debt by approximately $50 million.
RESULTS BY PRODUCT GROUP
PRISM(R) WIRELESS
Intersil's PRISM Wireless sales grew 466% from the same quarter in 1999 and
were up 20% from the previous quarter to a record $52.8 million. PRISM orders
rose 209% over the same quarter last year.
Intersil continues to add to its lead as the world's number one chip supplier
for 11 megabit per second (Mbps), 802.11b-compliant wireless LAN systems.
Intersil is the leading supplier of wireless LAN semiconductors for the
enterprise market and continues to win multiple designs for the small office and
home markets, which should drive a new wave of company growth in the second half
of calendar 2001. During the quarter, Intersil's PRISM chip set was designed
into Sony's innovative new 'airboard' wireless consumer appliance that was
featured in the January 8 issue of USA Today and D-Link's Air DWL-Series of
networking products for the home and business. Adding to the company's many
PRISM design wins for the enterprise market was Compaq's new portable
'MultiPort' module, the world's first single-sided WLAN adapter card with USB
interface that fits into a Plug-and-Play
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ANALOG & MIXED-SIGNAL
port on the back of Compaq's new notebook PCs. In the fourth quarter, Intersil
unveiled its plan to expand the company's industry-leading PRISM(R) wireless LAN
product family to include a 5GHz, 54Mbps solutions during calendar year 2001.
Intersil's Analog & Mixed-Signal sales were $112.0 million during the fourth
quarter, resulting in growth of 19% compared with the same period in 1999.
Orders for Analog & Mixed-Signal increased 3% over the prior year.
"Despite slowing market conditions, the communications portion of our analog
business grew 54% over the same quarter in the prior year due to market share
gains," said Williams. "Gross margins within Analog & Mixed-Signal improved 230
basis points during the fourth quarter, as we continue to shift our mix of
products toward communications. We continue to win new designs for our
Endura(TM) power management ICs that will move us into servers and home
gateways, as well as for our innovative communication ICs that provide voice
interface in small office and emerging home gateways."
DISCRETE POWER
Intersil's Discrete Power sales were $52.0 million during the fourth quarter,
down slightly from the same quarter in the prior year. Gross margins improved
310 basis points during the quarter to 33%, due to a more favorable mix of
products.
RECENT DEVELOPMENTS
Intersil announced yesterday that it has reached a definitive agreement to sell
its discrete power business to Fairchild Semiconductor International for $338
million in cash.
"With the sale of discrete power, Intersil's transition to a communications
semiconductor company is now complete," said Williams. "We anticipate a one-time
gain during the quarter ending March 30, and will use proceeds for complementary
communications acquisitions, alliances and product development efforts."
Excluding discrete power, Intersil's revenue for the fourth quarter was $164.8
million and $586.8 million for calendar year 2000, an annual growth rate of
approximately 50%. Gross margins for the fourth quarter were 52% without
discrete power. Reflecting the completion of the transition to a communications
IC company, Intersil will begin reporting revenue under the new WIRELESS ACCESS
(PRISM Wireless, Broadband Wireless Access and CommLink(TM) digital radio ICs)
and COMMUNCATIONS ANALOG (Power Management ICs, Subscriber Line Interface
Circuits and Standard Communications Analog) product groups.
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BUSINESS OUTLOOK
"Intersil had a tremendous first year as an independent company," said Williams.
"We exceeded expectations in revenue growth and gross margin expansion in 2000.
More importantly, we successfully positioned Intersil as a significant
communications semiconductor company. We believe that our focus on wireless
access and communications analog will set the stage for continued revenue and
profit growth over the next several years. Our preliminary revenue outlook is
for approximately 20% growth in 2001, with our higher margin wireless access
business expanding to nearly 40% of total Intersil revenue."
Intersil projects that total revenue in the first quarter will grow more than
25% over 2000, down sequentially from the fourth quarter. Intersil anticipates
an improvement in overall revenue growth rates in the second half of 2001 as
several of its new enterprise and home wireless design wins enter production.
"The current softness in demand in global markets is expected to continue
through the first quarter of 2001," said Williams. "We expect economic
conditions to improve in the latter half of 2001 that will help benefit our
overall business."
Added Williams, "We're very optimistic about our future as the world's leading
supplier of wireless LAN technology and a leading U.S. supplier of
communications analog products. Intersil has been successfully positioned to
extend our market leadership in wireless networking as demand for broadband
access grows. We have the resources for complementary strategic initiatives as a
communications company. As the economy recovers, we are poised to grow in some
of the industry's fastest growing and most exciting communications markets."
Investors and interested parties within the United States may listen to
Intersil's conference call today at 1:30 p.m. Pacific/4:30 p.m. Eastern by
dialing (800) 374-0815 and providing the operator with the pass code 'Intersil.'
International callers may connect to the call by dialing (706) 679-5219. A
replay of Intersil's conference call will be available starting at 3:00 p.m.
Pacific/6:00 p.m. Eastern by calling (800) 642-1687 in the US or (706) 645-9291
Internationally. Confirmation code for the replay, available until January 31,
2001, is 494359. A live webcast will also be available on Intersil's Internet
homepage at http://www.intersil.com/investor/index.asp.
ABOUT INTERSIL
Irvine, California-based Intersil is a leading supplier of
semiconductors, reference designs and software for wireless access and
communications analog markets. Intersil applies analog, mixed-signal and radio
frequency (RF) expertise to the development of products tailored for high-growth
communications markets. For more information about Intersil, visit the company's
Internet homepage at www.intersil.com.
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INTERSIL HOLDING CORPORATION
FINANCIAL SUMMARY (ADJUSTED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND PERCENTAGES)
Three Months Ended Twelve Months Ended
Combined
12/29/00 12/31/99 12/29/00 12/31/99
Revenue $216.8 $158.2 $797.6 $578.2
Year/Year Growth 37% 38%
Gross Margin (% of Sales) 48% 39% 44.9% 36.6%
Adjusted Operating Income 42.6 17.1 132.8 48.2
% of Sales 20% 11% 17% 8%
Adjusted Net Income (Loss) 27.9 (0.5) 75.3 17.0
% of Sales 13% 0% 9% 3%
Adjusted EPS
Basic $0.27 $0.81
Diluted $0.26 $0.77
Weighted Average Shares
Basic 105.2 92.8
Diluted 108.0 98.3
NOTE: This financial summary excludes amortization of intangibles,
extraordinary items, and one-time charges.
INTERSIL HOLDING CORPORATION
STATEMENTS OF OPERATIONS - SUPPLEMENTAL
FOR TWELVE MONTHS ENDED 12/29/00 - COMPARATIVE PURPOSES ONLY
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Twelve Months Ended
Combined
12/29/00 12/31/99 12/29/00 12/31/99
REVENUE
Product Sales $216.8 $158.2 $797.6 $578.2
COSTS AND EXPENSES
Cost of product sales 112.3 96.6 439.7 366.4
Research and development 27.2 17.6 96.5 71.8
Selling, general & administrative 34.8 27.0 128.6 91.8
Intangible amortization 10.0 2.5 23.3 5.5
5
Three Months Ended Twelve Months Ended
Combined
12/29/00 12/31/99 12/29/00 12/31/99
In-process R&D charge 25.4 (0.6) 25.4 20.2
Other -- -- 1.2 6.2
------ ----- ------ -----
OPERATING INCOME 7.1 15.1 82.9 16.3
Loss on sale of Malaysian operation -- -- 24.8 --
Interest, net (3.1) 15.6 11.3 23.3
------ ----- ------ -----
Income (loss) before income taxes,
extraordinary item and cumulative
effect of change in accounting
principle 10.2 (0.5) 46.8 (7.0)
Income taxes (benefit) 16.7 1.2 29.0 (3.3)
------ ----- ------ -----
Income (loss) before extraordinary
item and cumulative effect of
change in accounting principle (6.5) (1.7) 17.8 (3.7)
Extraordinary item - loss on
extinguishment of debt, net
of tax effect (5.6) -- (31.4) --
------ ----- ------ -----
Loss before cumulative effect
of change in accounting principle (12.1) (1.7) (13.6) (3.7)
Cumulative effect of adoption of
SFAS 133, net of tax effect -- -- (0.2) --
------ ----- ------ -----
NET LOSS (12.1) (1.7) (13.8) (3.7)
Preferred dividends -- (2.5) (1.6) (3.8)
------ ----- ------ -----
NET LOSS TO COMMON SHAREHOLDERS $(12.1) $(4.2) $(15.4) $(7.5)
====== ===== ====== =====
EPS
Basic & diluted
Income (loss) before extraordinary
item $(0.06) $ 0.16
Extraordinary item (0.06) (0.33)
------ ------
Net Loss $(0.12) $(0.17)
------ ------
WEIGHTED AVERAGE SHARES
Basic and diluted 105.2 92.8
------ ------
INTERSIL HOLDING CORPORATION
STATEMENTS OF OPERATIONS
FOR STUB YEAR ENDED 12/29/00
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Six Months Ended
Combined
12/29/00 12/31/99 12/29/00 12/31/99
REVENUE
Product sales $216.8 $158.2 $435.5 $292.1
COSTS AND EXPENSES
Cost of product sales 112.3 96.6 229.7 182.2
Research and development 27.2 17.6 53.0 34.4
Selling, general &
administrative 34.8 27.0 69.6 49.2
Intangible amortization 10.0 2.5 16.5 4.3
In-process R&D charge 25.4 (0.6) 25.4 20.2
Other -- -- -- 1.2
-------- -------- -------- --------
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Three Months Ended Six Months Ended
Combined
12/29/00 12/31/99 12/29/00 12/31/99
OPERATING INCOME 7.1 15.1 41.3 0.6
Interest, net (3.1) 15.6 (2.6) 24.2
-------- -------- -------- --------
Income (loss) before income
taxes, extraordinary item
and cumulative effect of
change in accounting
principle 10.2 (0.5) 43.9 (23.6)
Income taxes 16.7 1.2 30.8 1.3
-------- -------- -------- --------
Income (loss) before
extraordinary item and
cumulative effect of change
in accounting principle (6.5) (1.7) 13.1 (24.9)
Extraordinary item -- loss
on extinguishment of debt,
net of tax effect (5.6) -- (5.9) --
-------- -------- -------- --------
Income (loss) before cumulative
effect of change in accounting
principle (12.1) (1.7) 7.2 (24.9)
Cumulative effect of adoption of
SFAS 133, net of tax effect -- -- (0.2) --
-------- -------- -------- --------
NET INCOME (LOSS) (12.1) (1.7) 7.0 (24.9)
Preferred dividends -- (2.5) -- (3.9)
-------- -------- -------- --------
NET INCOME (LOSS) TO COMMON
SHAREHOLDERS $(12.1) $ (4.2) $ 7.0 $(28.8)
======== ======== ======== ========
EPS
Basic
Income (loss) before extraordinary
item $(0.06) $ 0.13
Extraordinary item (0.06) (0.06)
------ ------
Net income (loss) $(0.12) $ 0.07
------ ------
Diluted
Income before extraordinary item $(0.06) $ 0.12
Extraordinary item (0.06) (0.05)
------ ------
Net income $(0.12) $ 0.07
------ ------
WEIGHTED AVERAGE SHARES
Basic 105.2 101.0
------ ------
Diluted 105.2 105.2
------ ------
INTERSIL HOLDING CORPORATION
FINANCIAL HIGHLIGHTS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
Adjustments to reconcile reported net loss applicable
to common shareholders to adjusted net income:
[CAPTION]
Three Months Ended Twelve Months Ended
Dec. 29, 2000 Dec. 29, 2000
Net loss applicable to common
shareholders $ (12.1) $ (13.8)
a) Amortization of acquisition
-related intangibles 10.0 23.3
b) In-process R&D charge 25.4 25.4
c) Loss on sale of Malaysian
operation - 24.8
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Three Months Ended Twelve Months Ended
Dec. 29, 2000 Dec. 29, 2000
d) Associated tax effects and
benefit of net operating loss
carryforwards (1.0) (16.0)
e) Loss on extinguishment of
debt (net of tax) 5.6 31.4
f) Cumulative effect of adoption
of SFAS 133 (net of tax) - 0.2
------- ---------
Adjusted net income $ 27.9 $ 75.3
------- ---------
Diluted adjusted earnings per
share $ 0.26 $ 0.77
------- ---------
Diluted adjusted earnings
common shares 108.0 98.3
------- ---------
INTERSIL HOLDING CORPORATION
BALANCE SHEETS
(IN MILLIONS)
Dec. 29, Sep. 30,
ASSETS 2000 2000
Current Assets
Cash $ 352.6 $ 371.6
Trade receivables, net 124.0 128.1
Inventories 126.2 124.1
Prepaid expenses and other
current assets 10.6 11.4
Deferred income taxes 14.1 25.8
--------- --------
Total Current Assets 627.5 661.0
Other Assets
Property, plant & equipment,
net 235.6 228.8
Intangibles, net 307.2 182.1
Other 45.9 42.4
--------- --------
Total Other Assets 588.7 453.3
--------- --------
TOTAL ASSETS $1,216.2 $1,114.3
========= ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current Liabilities
Trade account payables $ 43.2 $ 42.8
Other accrued items 70.5 80.0
Long-term debt - current
portion 0.5 0.4
--------- ----------
Total Current Liabilities 114.2 123.2
Other Liabilities
Deferred income taxes 22.0 22.0
Long-term debt 65.0 112.8
Total Shareholders' Equity 1,015.0 856.3
--------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,216.2 $ 1,114.3
========= ==========
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Intersil Holding Corporation
Product Group Revenue Supplemental
(In millions)
Calendar Year 1999 Calendar Year 2000
Q1 Q2 Q3 Q4 CY'99 Q1 Q2 Q3 Q4 CY'00
Wireless Access........ $ 9.1 $ 13.7 $ 11.9 $ 14.9 $ 49.6 $ 22.1 $ 29.8 $ 51.4 $ 59.8 $163.1
Communications Analog.. 27.8 32.0 33.0 33.1 125.9 44.3 54.3 56.6 51.8 207.0
Other Analog........... 56.1 59.0 44.1 55.4 214.6 51.3 54.1 58.2 53.1 216.7
Discrete Power......... 42.4 46.0 44.9 54.8 188.1 53.2 53.0 52.5 52.1 210.8
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Intersil......... $135.4 $150.7 $133.9 $158.2 $578.2 $170.9 $191.2 $218.7 $216.8 $797.6
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This press release contains information relating to certain projections and
business trends that are forward looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Such forward looking statements are
based upon management's current expectations, estimates, beliefs, assumptions,
and projections about our business and industry. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will"
and variations of these words or similar expressions are intended to identify
forward looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances, including any underlying assumptions, are forward looking
statements. These forward looking statements about certain business and market
trends 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.
Important risk factors that may cause such material differences for Intersil
Holding Corporation ("Intersil") include, but are not limited to, the rate at
which our present and future customers and end-users adopt Intersil's
technologies and products in the home and enterprise WLAN, the broadband
wireless access, and the communications analog markets; the timing,
rescheduling or cancellation of significant customer orders; the loss of a key
customer; the qualification, certification, availability, and pricing of
competing products and technologies and the resulting effects on sales and
pricing of our products; silicon wafer pricing and the availability of foundry
and assembly capacity and raw materials; intellectual property disputes; risks
inherent in the acquisition and divestiture of businesses and technologies,
including, but not limited to, integration issues, costs and unforeseen
expenditures, impacts on customers, suppliers, and strategic partners,
employment issues, intellectual property issues, accounting charges, and risks
that the acquisition or divestiture will not achieve the expected benefits;
general market conditions; as well as other risk factors detailed from time to
time in Intersil's filings with the U.S. Securities & Exchange Commission
("SEC") which you may obtain for free at the SEC's website at www.sec.gov. These
forward looking statements are made only as of the date of this press release
and Intersil undertakes no obligation to update or revise these forward looking
statements.
PRISM is a registered trademark, and Endura is a trademark of Intersil
Corporation.
Sony, D-Link and Compaq are trademarks of those respective companies in the
United States and certain other countries.
All other trademarks mentioned are the property of their respective owners.
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