SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 2002
INTERSIL CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 000-29617 59-3590018
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7585 Irvine Center Drive, Suite 100, Irvine, CA 92618
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(Address of principal executive offices) (Zip Code)
(949) 341-7000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 2: Acquisition or Disposition of Assets.
On May 14, 2002, following receipt of approval of the shareholders of
Intersil Corporation ("Intersil") and Elantec Semiconductor, Inc. ("Elantec"),
Intersil consummated the acquisition of Elantec pursuant to the terms of the
previously reported Agreement and Plan of Merger, dated as of March 10, 2002
(the "Merger Agreement"), among Intersil, Elantec and Echo Acquisition, Inc., a
wholly-owned subsidiary of Intersil ("Merger Sub"). Pursuant to the Merger
Agreement, Elantec merged with and into Merger Sub (the "Merger"), with Merger
Sub surviving the Merger as a wholly-owned subsidiary of Intersil renamed
"Elantec Semiconductor, Inc."
As a result of the Merger, each share of Elantec common stock was converted
into 1.24 shares of Intersil Class A common stock and $8.00 cash. The source of
funds for the cash portion of the purchase price was working capital. In
connection with the Merger, Intersil amended its certificate of incorporation to
increase the maximum size of its board of directors from seven to eight.
Intersil also amended its shareholders' agreement to allow for the increase in
the maximum number of directors, by increasing the number of independent
directors designated by Sterling Holding Company, LLC, one of Intersil's
principal shareholders, from four to five. Also in connection with the Merger,
Richard M. Beyer, Elantec's president and chief executive officer before the
Merger, and James V. Diller, chairman of Elantec's board of directors before the
Merger, were appointed to Intersil's board of directors. Mr. Beyer also became
president and chief executive officer of Intersil, while Gregory L. Williams,
Intersil's president and chief executive officer before the Merger, became
executive chairman of Intersil's board of directors.
The Merger Agreement is incorporated herein by reference to Exhibit 2.01,
and a copy of the Intersil press release announcing the effectiveness of the
Merger is incorporated by reference and included herein as Exhibit 99.05. The
foregoing descriptions of such documents are qualified in their entirety by
reference to such exhibits.
Item 7: Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Elantec's audited balance sheets as of September 30, 2001 and
September 30, 2000, and audited statements of income and cash flows for each of
the three fiscal years preceding September 30, 2001, included in Elantec's
Annual Report on Form 10-K for the fiscal year ended September 30, 2001, are
included as Exhibit 99.03 and incorporated herein by reference.
Elantec's unaudited balance sheet as of the quarterly period ended
December 31, 2001, and unaudited statements of income and cash flows for the
quarterly periods ended December 31, 2001 and December 31, 2000, included in
Elantec's Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 2001, are included as Exhibit 99.04 and incorporated herein by reference.
(b) Pro forma financial information.
Unaudited Pro Forma Combined Condensed Statement of Operations for the
Three Months Ended March 29, 2002
Unaudited Pro Forma Combined Condensed Statement of Operations for the
Fiscal Year Ended December 28, 2001
Unaudited Pro Forma Combined Condensed Balance Sheet as of December
28, 2001
(c) Exhibits.
Incorporated by reference to the Exhibit Index following the signature
page of this Current Report.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 10, 2002
INTERSIL CORPORATION
By: /s/ Stephen M. Moran
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Stephen M. Moran
Vice President, General Counsel
and Secretary
INTERSIL CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
have been prepared to give effect to the merger of Intersil and Elantec, using
the purchase method of accounting. These pro forma statements were prepared as
if the merger had been completed as of December 30, 2000 for statement of
operations purposes and as of December 28, 2001 for balance sheet purposes.
The unaudited pro forma combined condensed financial statements are presented
for informational purposes only and are not intended to represent or be
indicative of the consolidated results of operations or financial condition of
Intersil that would have been reported had the merger been completed as of the
dates presented, and should not be taken as representative of future results of
operations of Intersil.
These unaudited pro forma combined condensed financial statements should be
read in conjunction with the accompanying notes thereto.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended March 29, 2002
Historical
---------- Pro Forma Pro Forma
Intersil Elantec Adjustments Combined
-------- ------- ----------- --------
(in millions, except per share data)
Revenue
Product sales $ 134.1 $ 25.4 -- $ 159.5
Costs and expenses
Cost of product sales 63.0 11.9 -- 74.9
Research and development 27.8 5.1 -- 32.9
Selling, general and administrative 23.8 5.0 -- 28.8
Amortization of purchased intangibles and deferred -
compensation 2.3 -- 3.3 (a) 5.6
---------- ---------- ---------- ----------
Operating income 17.2 3.4 (3.3) 17.3
Interest and other income, net 2.9 0.9 -- 3.8
Interest expense (0.3) -- -- (0.3)
---------- ---------- ---------- ----------
Income before income taxes and extraordinary item 19.8 4.3 (3.3) 20.8
Income taxes 6.0 1.3 -- 7.3
---------- ---------- ---------- ----------
Income before extraordinary item $ 13.8 $ 3.0 $ (3.3) $ 13.5
========== ========== ========== ==========
Basic earnings per share before extraordinary item $ 0.13 $ 0.13 $ 0.10
Diluted earnings per share before extraordinary item $ 0.13 $ 0.12 $ 0.10
Weighted average common shares outstanding
Basic 106.9 23.1 136.5
Diluted 109.1 25.6 141.7
Fiscal Year Ended December 28, 2001
Historical
---------- Pro Forma Pro Forma
Intersil Elantec Adjustments Combined
-------- ------- ----------- --------
(in millions, except per share data)
Revenue
Product sales............................................ $ 481.1 $ 94.7 $ -- $ 575.8
Costs and expenses
Cost of product sales.................................... 258.6 46.9 -- 305.5
Research and development................................. 106.1 22.2 -- 128.3
Selling, general and administrative...................... 93.5 17.1 -- 110.6
Amortization of purchased intangibles and deferred
compensation........................................... 44.2 -- 21.5 (a) 65.7
Impairment of long-lived assets.......................... 7.6 15.3 -- 22.9
Restructuring............................................ 32.4 1.1 -- 33.5
---------- ---------- ---------- ----------
Operating loss.............................................. (61.3) (7.9) (21.5) (90.7)
Interest and other income, net........................... 20.8 7.3 -- 28.1
Interest expense......................................... (2.3) (0.2) -- (2.5)
Impairment on investment................................. (8.2) -- -- (8.2)
---------- ---------- ----------- ----------
Loss before disposal of certain operations.................. (51.0) (0.8) (21.5) (73.3)
Net sales from disposed operations....................... 38.5 -- -- 38.5
Costs and expenses of disposed operations................ (41.4) -- -- (41.4)
Gain on disposal of certain operations................... 168.4 -- -- 168.4
---------- ---------- ---------- ----------
Income (loss) before income taxes and extraordinary item.... 114.5 (0.8) (21.5) 92.2
Income taxes (benefit)................................... 62.4 (0.4) -- 62.0
---------- ---------- ---------- ----------
Income (loss) before extraordinary item..................... $ 52.1 $ (0.4) $ (21.5) $ 30.2
========== ========== ========== ==========
Basic earnings per share before extraordinary item.......... $ 0.49 $ (0.02) $ 0.22
Diluted earnings per share before extraordinary item........ $ 0.48 $ (0.02) $ 0.22
Weighted average common shares outstanding
Basic.................................................... 105.7 22.5 135.3
Diluted.................................................. 108.9 22.5 138.4
INTERSIL CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
December 28, 2001
Historical
---------------- Pro Forma Pro Forma
Intersil Elantec Adjustments Combined
-------- ------- ----------- ---------
(in millions)
Assets
Cash and cash equivalents..................... $ 601.5 $113.1 $ (221.4) (b) $ 493.2
Short-term investments........................ -- 75.1 -- 75.1
Trade receivables............................. 55.1 7.5 -- 62.6
Inventories................................... 67.9 12.7 -- 80.6
Prepaid expenses.............................. 9.1 4.7 -- 13.8
Deferred income taxes......................... 33.8 3.1 -- 36.9
-------- ------ -------- --------
Total current assets...................... 767.4 216.2 (221.4) 762.2
Property, plant and equipment................. 140.1 11.3 (4.9) (c) 146.5
Intangibles................................... 241.1 -- 1,097.2 (c) 1,338.3
Investments................................... 39.2 -- -- 39.2
Deferred income taxes......................... -- 12.6 -- 12.6
Other......................................... 12.4 1.8 -- 14.2
-------- ------ -------- --------
Total other assets........................ 432.8 25.7 1,092.3 1,550.8
-------- ------ -------- --------
Total assets..................................... $1,200.2 $241.9 $ 870.9 $2,313.0
======== ====== ======== ========
Liabilities and Shareholders' Equity
Trade payables and accrued expenses........... $ 87.9 $ 13.3 $ -- $ 101.2
Exit and restructuring costs.................. 23.9 -- -- 23.9
Deferred revenue.............................. -- 2.6 -- 2.6
Income taxes payable.......................... 24.7 -- -- 24.7
Current portion of capital lease obligations.. -- 0.8 -- 0.8
-------- ------ -------- --------
Total current liabilities................. 136.5 16.7 -- 153.2
Long-term capital lease obligations........... -- 0.3 -- 0.3
Other long-term liabilities................... -- 1.7 -- 1.7
Deferred income taxes......................... 6.5 -- 4.7 (d) 11.2
Shareholders' Equity
Common stock.................................. 1.1 0.2 0.1 (e) 1.4
Additional paid-in capital.................... 1,065.3 207.7 969.5 (e) 2,242.5
Retained earnings (deficit)................... 4.2 23.8 (77.6) (e)(f) (49.6)
Unearned compensation......................... (1.1) (3.5) (30.8) (e)(g) (35.4)
Accumulated other comprehensive income (loss). (0.4) 0.1 (0.1) (e) (0.4)
Treasury shares, at cost...................... (11.9) (5.1) 5.1 (e) (11.9)
-------- ------ -------- --------
Total shareholders' equity................ 1,057.2 223.2 866.2 2,146.6
-------- ------ -------- --------
Total liabilities and shareholders' equity....... $1,200.2 $241.9 $ 870.9 $2,313.0
======== ====== ======== ========
INTERSIL CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
(i) Basis of Pro Forma Presentation
On March 10, 2002, Intersil and Elantec entered into a definitive agreement
whereby each outstanding share of Elantec common stock would be converted into
1.24 shares of Intersil Class A common stock and $8.00 cash, without interest.
Each outstanding option to purchase shares of Elantec common stock would use an
exchange ratio equal to 1.24 plus the quotient of $8.00 divided by the closing
sales price of Intersil Class A common stock as reported on the Nasdaq National
Market on the trading day immediately preceding the date of the merger. Under
the terms of the merger agreement, Intersil issued 29,587,380 shares of its
Class A common stock and reserved 8,967,450 shares of its Class A common stock
in exchange for Elantec's outstanding stock options. The stock options were
exchanged using an exchange ratio of 1.52 based on the average closing sales
price of Intersil Class A common stock on May 13, 2002 and May 14, 2002 of
$28.41.
The unaudited pro forma combined condensed statements of operations combine
the historical unaudited and audited consolidated statements of operations for
Intersil for the quarter ended March 29, 2002 and the year ended December 28,
2001, respectively, with Elantec's historical unaudited consolidated statements
of operations for the quarter ended March 31, 2002 and the year ended December
31, 2001, giving effect to the merger as if it had occurred on December 30,
2000, the first day of Intersil's fiscal year. Elantec's historical unaudited
consolidated statement of operations for the year ended December 31, 2001 was
derived by adding the unaudited consolidated statement of operations for the
quarter ended December 31, 2001 to the audited consolidated statement of
operations for its fiscal year ended September 30, 2001 and deducting the
unaudited consolidated statement of operations for the quarter ended December
31, 2000.
The unaudited pro forma combined condensed balance sheet combines Intersil's
historical audited consolidated balance sheet as of December 28, 2001 with
Elantec's historical unaudited consolidated balance sheet as of December 31,
2001, giving effect to the merger as if it had occurred as of December 28, 2001.
(ii) Purchase Price
The estimated value of Intersil's Class A common stock is $32.42 per share
based on the average closing price of Intersil's common stock for the five-day
period including March 11, 2002 (the first trading day following the
announcement of the signing of the merger agreement) and the two trading days
preceding and succeeding such date.
The purchase price of the Elantec merger is as follows (in
millions):
Value of Intersil common stock issued $ 959.2
Cash paid to Elantec shareholders.......... 190.9
Fair value of stock options issued......... 218.3
Merger costs and transaction fees.......... 30.5
Unearned stock-based compensation.......... (34.3)
--------
Total purchase price.................... $1,364.6
========
INTERSIL CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS--(Continued)
The purchase price allocation is as follows (in millions):
Net tangible assets acquired................ $ 218.3
Completed technology........................ 12.4
Acquired in-process research and development 53.8
Goodwill.................................... 1,084.8
Deferred tax liability...................... (4.7)
--------
Total purchase price..................... $1,364.6
========
An independent valuation specialist performed an allocation of the total
purchase price of Elantec to certain of its individual assets and liabilities.
In addition to the value assigned to in-process research and development
projects and tangible assets, specific intangible assets were identified and
valued. The related amortization of the identifiable intangible assets is
reflected as a pro forma adjustment to the unaudited pro forma combined
condensed statement of operations. The identifiable intangible assets consist of
acquired completed technology. For purposes of these pro forma combined
condensed financial statements, estimated values as of December 31, 2001 have
been used.
The $53.8 million amount allocated to acquired in-process research and
development represents the purchased in-process technology for projects that, as
of the date of the acquisition had not yet reached technological feasibility and
had no alternative future use. The value of these projects was determined by
estimating the resulting net cash flows from the sale of products resulting from
the completion of the projects, reduced by the portion of the revenue
attributable to developed technology and the percentage of completion of the
project. The resulting cash flows were then discounted back to their present
value at appropriate discount rates.
The amounts allocated to acquired in-process research and development will
be charged to the statement of operations in the period the acquisition is
consummated. The related amortization of identifiable intangible assets is
reflected as a pro forma adjustment to the unaudited pro forma combined
condensed statement of operations.
The preliminary residual purchase price of $1,084.8 million has been
recorded as goodwill. Goodwill represents the excess of the purchase price over
the fair value of the net tangible and intangible assets acquired. In
accordance with Statement of Financial Accounting Standards No. 142, "Goodwill
and Other Intangible Assets," or FAS 142, goodwill will be carried at cost and
tested for impairment annually and whenever events indicate that impairment may
have occurred. Goodwill is not amortized under FAS 142. As this plan of merger
was initiated after July 1, 2001, the Company has adopted FAS 142 for the
accounting treatment of goodwill in these unaudited pro forma combined
condensed financial statements.
(iii) Pro Forma Adjustments
There were no transactions between Intersil and Elantec during the periods
presented.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS--(Continued)
The unaudited pro forma combined condensed provision for income taxes may
not represent the amounts that would have resulted had Intersil and Elantec
filed consolidated income tax returns during the periods presented.
The following pro forma adjustments have been made to the unaudited pro
forma combined condensed financial statements:
(a) To record first quarter amortization of intangible assets ($10.3 million)
and unearned stock-based compensation ($3.0 million); to record
calender year amortization of intangible assets ($1.4 million) and
unearned stock-based compensation ($20.1 million) related to the
merger as if it had occurred on December 30, 2000. Intangible assets
are amortized over nine years. Stock-based compensation is amortized
over the remaining vesting periods.
(b) To record the estimated cash consideration to be paid to Elantec
shareholders under the merger agreement ($190.9 million) and
merger-related transaction costs ($30.5 million).
(c) To record the write-down to fair market value of property, plant and
equipment and to record the estimated fair value of intangible assets
resulting from the merger, including (in millions):
Goodwill.................... $1,084.8
Completed technology........ 12.4
--------
Total....................... $1,097.2
========
(d) To record a deferred tax liability related to identifiable intangible
assets.
(e) To record the increase in shareholders' equity of Intersil as a result of
the issuance of common shares ($0.3 million common stock and $958.9
million additional paid-in-capital) in exchange for the all of the
issued and outstanding common shares of Elantec, the fair value
associated with the Intersil stock options exchanged for Elantec stock
options ($218.3 million) and to eliminate the historical retained
earnings, unearned stock-based compensation, common stock, additional
paid-in capital, accumulated other comprehensive income, and treasury
shares of Elantec as a result of the purchase transaction.
(f) To reflect the estimated charge for acquired in-process research and
development of $53.8 million.
(g) To record unearned stock-based compensation related to the unvested
Elantec stock options assumed in the merger.
EXHIBIT INDEX
Exhibit
Number Description
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2.01 Agreement and Plan of Merger dated March 10, 2002, by and among
Intersil Corporation, Echo Acquisition, Inc. and Elantec
Semiconductor, Inc. 2000 (incorporated by reference to Exhibit 2.1 to
the Current Report on Form 8-K previously filed by Intersil on March
12, 2002).
23.01 Consent of Deloitte & Touche LLP, Independent Auditors.
99.01 Amendment No. 4, dated as of April 2, 2002, to the Securities Purchase
and Holders Agreement by and among Intersil, Sterling Holding Company,
LLC, Manatee Investment Corporation, Citicorp Mezzanine Partners, L.P.
and the management investors named therein.
99.02 Certificate of Amendment to Intersil's Amended and Restated
Certificate of Incorporation (incorporated by reference to Exhibit
4.02 to the Registration Statement on Form S-8 previously filed by
Intersil on May 14, 2002).
99.03 Elantec Semiconductor, Inc.'s audited balance sheets as of September
30, 2001 and September 30, 2000, and audited statements of income and
cash flows for each of the three fiscal years preceding September 30,
2001 (incorporated by reference to Elantec's Annual Report on Form
10-K for the fiscal year ended September 30, 2001).
99.04 Elantec Semiconductor, Inc.'s unaudited balance sheet as of the
quarterly period ended December 31, 2001, and unaudited statements of
income and cash flows for the quarterly periods ended December 31,
2001 and December 31, 2000, (incorporated by reference to Elantec's
Quarterly Report on Form 10-Q for the fiscal quarter ended December
31, 2001).
99.05 Press Release issued by Intersil on May 14, 2002.