Hi Everyone,
I have a bit of time on my hands so I thought I might share a few thoughts in the form of probably 3 messages. Like many here, I have been following the wireless sector very closely trying to learn all I can. I see great promise for this sector being a tremendous growth area over the next few years. Many positive signs came forward this past week. NOK with their great ER, they are kicking their competitors butt in the handset arena. ERICY, while hurting on the handset business, continues to dominate in the infrastructure field. I read they have signed 16 of the 21 major contracts for 3G infrastructure done so far. If they sold off their troubled handset business, they would be incredibly successful. Add in the fixed wireless potential which is just getting ready to sprout its buds. I think the recent deal between WIN & ERICY is just the tip of the iceberg, more on this later.
SW coming off a blow out quarter, CIC up $10 today, RIM running for the sky. Then there is OFDM Forum member Intersil. ISIL is a US semi-conductor company with emphasis on broadband wireless communications. They are targeting 802.11b now and 802.11a in the very near future. Their just out annual report makes for some interesting reading. ISIL announced terrific earnings last night and the stock responded with a jump of over 21%. The report is below, notice sequential PRISM wireless (802.11b) growth of 104% and y over y over 600%. Also notice that gross margins grew from 36% to 46%. I think it is highly likely that ISIL will sign a licensing agreement with WIN in the near future.
Disclosure, I do hold ISIL, NOK, ERICY, SW, CIC & WIN.
Intersil Announces Third Consecutive Record Quarter
Business Wire - Thursday October 19, 2000
IRVINE, Calif.--(BUSINESS WIRE)--Oct. 19, 2000--
Orders Increase 62%, Revenues Expand 63% Over 1999
Adjusted Earnings Per Share (EPS) at $0.24
PRISM(R) Wireless Sales Grow 104% Sequentially to $44.2 Million
Intersil Holding Corporation (Nasdaq:ISIL) today reported record financial results for the quarter ended September 29, 2000. Compared to the same period in the prior year, orders were up 62% and sales grew 63% to $218.6 million. Compared to the previous quarter, overall sales increased 14%. Adjusted net income, before amortization and one-time charges, was $24.8 million or $0.24 per diluted share of common stock.
"Intersil achieved excellent financial results during the quarter," said Greg Williams, Intersil's President and CEO. "Strong demand for our PRISM wireless access solutions coupled with record revenue from our communications analog products resulted in performance that exceeded expectations. PRISM sales accounted for more than 20% of total Intersil revenues during the quarter, driven by strong market demand for wireless to broadband access. We continued to increase orders and sales from market leaders including Cisco, 3Com and Symbol Technologies. Our gross margins improved 310 basis points over last quarter to 46.3% as a result of a richer mix of communications products.
"Intersil is establishing a leadership position in the emerging wireless access market," added Williams. "During the quarter we announced our intentions to acquire, and this week concluded our acquisition of SiCOM, a leader in broadband wireless access technology. Intersil also made a strategic investment in Silicon Wave, a leader in Bluetooth personal networking technology. We completed an investment in Sygate(R) Technologies (formerly Sybergen Networks), with plans to develop roaming Internet Protocol software to support remote personal wireless access. Our strategic initiatives are consistent with Intersil's unrelenting focus on the development of leading wireless connectivity solutions."
Results by Product Group
PRISM(R) Wireless
Intersil's PRISM Wireless sales grew 601% from the same quarter in 1999 and were up nearly 104% from the previous quarter to $44.2 million. PRISM orders soared 605% over the same quarter last year, as many of Intersil's customers' new products are entering volume production.
"Intersil's PRISM has clearly been established as the architecture of choice for leading customers in home, enterprise and mobile high-data-rate wireless access markets, and the ramp-up of our 11 megabit PRISM II product has exceeded expectations," said Williams. "We shipped our two-millionth PRISM II chip set in September, only two months after completing the first million shipments. Our new four-chip radio is being sampled today on smaller miniPCI and embedded platforms. These new miniature radios are being designed into next generation mobile appliances that will be announced in the next several months."
Intersil showcased several PRISM-powered products at September's Networld+Interop show including Alcatel's innovative Speed Touch(TM) home gateway product, SpectraLink's Voice over Internet phone and Compaq's new iPAQ hand-held Internet appliance utilizing Microsoft Windows CE.
Analog & Mixed-Signal
Intersil's Analog & Mixed-Signal sales were a record $122.0 million during the third quarter, resulting in growth of 47% compared with the same period in 1999. Orders increased 31% over the same period last year.
"We are making significant progress in changing our product mix to address communications, achieving 63% year on year growth in the communications portion of our analog portfolio," said Williams. "We continue to see strong demand and are gaining market share in power management products, particularly our Endura(TM) family of multiphase controller ICs for high performance microprocessors. During the third quarter we announced the shipment of our 100-millionth Endura product, which now manages power for more than half of the world's AMD Athlon(TM) processors. Intersil also continues to expand its portfolio of integrated circuits used in servers that include advanced power management features like 'hot swap' - the ability to replace defective boards without powering down the network."
Discrete Power
When compared to the same quarter of 1999, Intersil's Discrete Power sales grew 17% to $52.5 million, while orders increased 26%.
"Intersil's Discrete Power products continue to win many new designs with leading customers in networking, computing and communications," added Williams. "In a quarter that we usually experience some seasonal weakness, we saw no drop in overall discrete power sales from the prior quarter. Intersil continues to ramp up production of new products and we're winning new designs with our fast-switching SMPS IGBTs, our soft recovery Stealth Diodes(TM) and Dense Trench(TM) MOSFETs. These high efficiency MOSFETs - built in our state-of-the-art, eight-inch discrete power fab - are now in our customers' hands and are being designed into next generation products."
Business Outlook
"Intersil continues to make progress resulting from our unrelenting focus on wireless access and communications markets," said Williams. "We anticipate sequential growth in revenues, gross margins and earnings per share during our fourth calendar quarter. We now expect our fourth quarter revenues to grow approximately 45% over the same quarter last year. This will result in overall Intersil revenue growth for calendar year 2000 of 40%. Driven by our strong wireless access growth and our improved mix in communications analog, our preliminary outlook for 2001 is for growth of approximately 30% to more than $1 billion."
For individuals interested in hearing a more detailed analysis of the Company's performance during the quarter, a conference call will be held on October 19 at 4:30 PM Eastern. If you would like to participate, please dial 800/967-7184 and provide the operator with identification number 539114 to be connected.
Intersil Holding Corporation
Financial Summary
(In millions, except per share amounts and percentages) (Unaudited)
Three Months Ended Nine Months Ended
Combined Combined
Sep. 29, Oct. 1, Sep. 29, Oct. 1,
2000 1999 2000 1999
Revenue $ 218.6 $ 133.9 $ 580.7 $ 420.0
Year/Year Growth 63% 38%
Gross Margin (% of Sales) 46% 36% 44% 36%
Adjusted Operating Income 40.6 9.2 90.2 31.2
% of Sales 19% 7% 16% 7%
Adjusted Net Income (Loss) 24.8 (7.8) 47.4 14.3
% of Sales 11% -6% 8% 3%
Adjusted Earnings Per
Common Share
Basic $ 0.26 $ 0.53
Diluted $ 0.24 $ 0.49
Weighted Average Common
Shares Outstanding
Basic 96.9 89.3
Diluted 102.3 96.0 |
