Intersil Corporation Announces Fourth Quarter 2002 Financial Results
TUESDAY , JANUARY 28, 2003 04:41 PM
MILPITAS, Calif., Jan 28, 2003 (BUSINESS WIRE) -- Intersil Corporation (Nasdaq:ISIL):
-- Achieves $179.9 million in revenue; in line with December
guidance and up 24% from the same quarter of 2001
-- Meets EPS guidance of $0.18 and generates more than $40 million
in cash from operations
Intersil Corporation (Nasdaq:ISIL), a world leader in the design and manufacture of high performance
analog and wireless networking solutions, today reported financial results for the fourth quarter
ended January 3, 2003. Net revenue was $179.9 million, a decrease of 6% from the previous quarter
but a 24% increase from the same quarter in the prior year. Excluding amortization of intangibles,
adjusted net income for the fourth quarter was $25.3 million or $0.18 per diluted share of common
stock. This compares to adjusted net income of $14.8 million or $0.11 per diluted share for the
fourth quarter of 2001. Net income on a generally accepted accounting principles (GAAP) basis for
the fourth quarter of 2002 was $0.4 million or $0.00 per diluted share. This compares to net income
of $3.5 million or $0.03 per diluted share for the same period a year ago.
For the total year, Intersil achieved adjusted net revenue of $706.2 million, an increase of 23%
over the previous year, and reported adjusted earnings per share of $0.66, an increase of 89%
from 2001.
"Our company performance remains strong," said Rich Beyer, Intersil's president and CEO. "Our total
analog revenue grew sequentially in the fourth quarter, driven by strength in our Power Management
and Elantec Product Groups, and all our product groups grew year over year. We achieved gross margins
of approximately 53% and generated over $40 million in cash flow from operations. Our cash balance
improved to over $623 million during the quarter, days sales outstanding held steady at 45 days and
we reduced our inventory position by approximately $11 million."
"Our results in 2002 demonstrate that our strategic model is working," added Beyer. "Intersil's revenue
grew 23% during a year in which the semiconductor industry grew only about 2%, and our Power Management,
Elantec and Wireless Networking Product Groups all grew more than 10%. Our focus on high performance
analog and wireless networking markets has enabled us to outpace the industry in revenue growth while
significantly improving our profitability."
Results by Product Group
Revenue for Intersil's Power Management products reached a record $52.6 million during the fourth
quarter, an increase of 12% from the prior quarter and 17% from the fourth quarter of 2001. Growth
in power management came from products used across the range of Intersil's targeted platforms
-- desktop PCs, notebook PCs, double data-rate (DDR) memory and graphics cards. Intersil
shipped its 500 millionth Endura(TM) power management IC during the quarter, and continues to
add to its leadership position with innovative high performance analog products, such as
its new VR10 Power Management solution for next-generation Intel processors and new battery charger
ICs for notebooks and portables.
Sales of Elantec(TM) products increased 2% sequentially and 11% over the fourth quarter of the
prior year to $25.5 million. Growth for the Elantec Product Group came from its optical
storage and DSL products. As the world's leading supplier of laser diode drivers for CD-Read/Write
and DVD-Recordables, Intersil is well positioned as an increasing percentage of PCs incorporate
DVD-Recordable drives. Strength also came from the sale of Elantec DSL line drivers, driven
particularly by strong demand for Central Office products in Japan.
Intersil's Standard Analog revenue decreased 11% sequentially but increased slightly from the
same quarter in the prior year to $30.2 million. This product group continues to be impacted by
soft demand, particularly in the North American distribution channel; it is expected to
resume growth as the market strengthens in the second half of 2003. Intersil's broad portfolio of
Standard Analog products offers attractive gross margins and continues to generate positive cash
flow for the company.
Automotive product sales peaked at $15.4 million during the fourth quarter as Intersil fulfilled
last-time purchases from automotive customers. The company expects minimal revenue from this product
group in the first quarter of 2003, as the exit of this business is completed. As previously
announced, Intersil is exiting the automotive business in order to focus on higher growth and more
profitable areas of its business.
In line with expectations, Intersil's Wireless Networking sales decreased 25% from the previous
quarter but grew 49% year over year to $56.2 million. As indicated in December, while Intersil
experienced customer-requested delayed shipments late in the fourth quarter, it appears that
inventory in the channel is now clearing as anticipated and the end markets for WLAN products
remain solid. The company recently announced design wins with leading OEMs D-Link, NETGEAR,
corega and USI for Intersil's next generation 802.11g-based PRISM GT(TM) chip set which
began shipping late in the fourth quarter of 2002. Intersil is also seeing strong
interest for its new dual band 802.11a, b and g WLAN solution, PRISM Duette(TM), which
will begin shipping in volume in the first quarter of 2003.
Business Outlook
Looking ahead to the first quarter, Beyer said, "We continue to be cautious in our near-term outlook
as we enter an historically soft quarter for the semiconductor industry. As we indicated in
December, we expect revenue from our continuing product groups to be slightly down from the fourth
quarter due to normal seasonality. We anticipate approximately $2-$3 million of final
automotive sales in the first quarter of 2003. This results in total expected revenue of
$160-$165 million for the company. We anticipate gross margins of approximately 53% and adjusted
earnings per share of $0.13-$0.14."
Beyer concluded, "We introduced more than 100 new analog products in 2002 and began shipping next
generation, high-data-rate WLAN products to leading customers, while improving our competitiveness
and cost structure. By successfully executing our strategy, Intersil gained market share
for the third consecutive year. We will invest in these markets again in 2003 so that we can
continue to outperform the industry."
Investors and interested parties within the United States may listen to Intersil's fourth quarter
earnings conference call today at 4:30 p.m. Eastern/1:30 p.m. Pacific by dialing (877) 709-5342
and providing the operator with the pass code Intersil. International callers may connect to
the call by dialing (630) 395-0024. A replay of Intersil's conference call will be available
beginning at 7:00 p.m. Eastern/4:00 p.m. Pacific on January 28 and for one week thereafter
by calling (800) 454-0161 in the US or (402) 220-2149 Internationally. Confirmation code for
the replay is 42069. A live webcast will also be available on Intersil's Investor Relations homepage
at intersil.com and a replay will be available until February 4, 2003.
About Intersil
Intersil Corporation is a global semiconductor leader in the design and manufacture of high performance
analog and wireless networking solutions. Intersil's product portfolios address four fast growing
markets - flat panel displays, optical storage (CD and DVD recordable), power management and wireless
networking. Intersil brings added customer value in providing complete silicon, software and
reference design solutions to new products that enhance the computing experience for people wherever
they live, work or travel. 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: intersil.com
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Intersil Corporation
Financial Summary (Adjusted)
(In millions, except per share amounts and percentages)
Three Months Twelve Months
Ended Ended
1/3/03 12/28/01 1/3/03 12/28/01
Revenue $ 179.9 $ 144.5 $ 706.2 $ 575.7
Year/Year Growth 24% 23%
Gross Margin 94.8 75.2 376.9 291.5
% of Sales 52.7% 52.0% 53.4% 50.6%
R&D 34.9 30.5 138.7 128.2
SG&A 28.7 26.8 119.5 110.7
Operating Income 31.2 17.9 118.7 52.6
% of Sales 17% 12% 17% 9%
Interest, net (3.1) (3.4) (11.9) (19.4)
Pretax Income 34.3 21.3 130.6 72.0
Net Income $ 25.3 $ 14.8 $ 92.7 $ 48.8
% of Sales 14% 10% 13% 8%
EPS
Basic $ 0.19 $ 0.11 $ 0.68 $ 0.36
Diluted $ 0.18 $ 0.11 $ 0.66 $ 0.35
Weighted Average Shares
Basic 136.6 136.1 136.5 135.3
Diluted 140.5 141.5 141.2 141.2
NOTE: This financial summary excludes amortization of intangibles
for the quarter and other one-time items for other periods. The
financial summary includes Elantec in all periods. These adjustments
are included on page 7.
Intersil Corporation
Statements of Operations
(In millions, except per share amounts)
Three Months Twelve Months
Ended Ended
1/3/03 12/28/01 1/3/03 12/28/01
Revenue
Product sales $ 179.9 $ 121.6 $ 649.7 $ 481.1
Costs and Expenses
Cost of product sales 85.1 58.4 305.2 258.6
Research and development 34.9 25.5 131.0 106.1
Selling, general & administrative 28.8 22.2 111.9 93.5
Intangible amortization 7.3 10.6 24.6 44.2
In-process research and
development - - 53.8 -
Impairment of long-lived assets - - 6.2 7.6
Restructuring - - 5.3 32.4
------- --------- ------- ---------
Operating Income (Loss) 23.8 4.9 11.7 (61.3)
Interest, net (3.1) (3.7) (11.3) (18.6)
Loss on investments - - 1.7 8.2
Operating results of certain
operations
disposed of during 2001 - - - (3.0)
Gain on sale of certain assets - - - 168.4
------- --------- ------- ---------
Income before income taxes and
extraordinary item 26.9 8.6 21.3 114.5
Income taxes 26.5 5.1 21.8 62.4
------- --------- ------- ---------
Income (loss) before
extraordinary item 0.4 3.5 (0.5) 52.1
Extraordinary item - loss on
extinguishment of debt, net of
tax effect - - - (12.2)
------- --------- ------- ---------
Net income (loss) $ 0.4 $ 3.5 $ (0.5) $ 39.9
======= ========= ======= =========
EPS
Basic
Income (loss) before
extraordinary item $ 0.00 $ 0.03 $ (0.00)$ 0.49
Extraordinary item - - - (0.11)
------- --------- ------- ---------
Net income (loss) $ 0.00 $ 0.03 $ (0.00)$ 0.38
======= ========= ======= =========
Diluted
Income (loss) before
extraordinary item $ 0.00 $ 0.03 $ (0.00)$ 0.48
Extraordinary item - - - (0.11)
------- --------- ------- ---------
Net income (loss) $ 0.00 $ 0.03 $ (0.00)$ 0.37
======= ========= ======= =========
Weighted Average Shares
Basic 136.6 106.5 125.6 105.7
======= ========= ======= =========
Diluted 140.5 109.2 125.6 108.9
======= ========= ======= =========
NOTE: The effect of dilutive securities is not included in the
twelve months ended January 3, 2003 because to do so would be
antidilutive. Otherwise, diluted shares would be 129.1 million.
Intersil Corporation
Balance Sheets
(In millions)
Jan. 3, Oct. 4,
2003 2002
Assets
Current Assets
Cash & short-term investments $ 623.6 $ 596.8
Trade receivables, net 93.9 87.6
Inventories 86.0 96.7
Prepaid expenses and other current assets 9.4 12.1
Deferred income taxes 32.1 56.5
-------- --------
Total Current Assets 845.0 849.7
Other Assets
Property, plant & equipment, net 161.3 155.5
Intangibles, net 1,304.4 1,323.4
Deferred income taxes 14.9 -
Other 40.0 37.8
-------- --------
Total Other Assets 1,520.6 1,516.7
-------- --------
Total Assets $2,365.6 $2,366.4
======== ========
Liabilities and Shareholders' Equity
Current Liabilities
Trade account payables $ 37.5 $ 34.4
Income taxes payable 24.4 20.0
Deferred revenue 12.4 11.1
Other accrued i Restructuring - - 5.3 32.4
d) In-process research and
development - - 53.8 -
e) Loss on investments - - 1.7 8.2
f) Operating results of certain
operations - - - 3.0
g) Gain of certain assets sold - - - (168.4)
h) Excess inventory charge - - - 19.2
i) Income for Elantec prior to
acquisition - 3.5 8.4 17.5
j) Margin from change in
distributor revenue recognition - - 10.1 -
k) Extinguishment of debt - - - 12.2
l) Interest impact on cash used in
acquisition - (1.4) (1.0) (6.4)
m) Reconciliation to adjusted tax
rate of 29% for 2003 17.6 (1.4) (16.0) 39.3
------- ------- --------- -------
Adjusted net income $25.3 $14.8 $92.7 $48.8
======= ======= ========= =======
Diluted adjusted earnings per
share $0.18 $0.10 $0.66 $0.35
======= ======= ========= =======
Diluted adjusted earnings common
shares 140.5 141.5 141.2 141.2
======= ======= ========= =======
Adjustments to reconcile reported revenue
to adjusted revenue:
Revenue $179.9 $121.6 $649.7 $481.1
Revenue for Elantec prior to
acquisition - $22.9 41.8 $94.6
Revenue from change in distributor
revenue recognition - $ - 14.7 $ -
------- ------- --------- -------
Adjusted Revenue $179.9 $144.5 $706.2 $575.7
======= ======= ========= =======
Note: Amounts may not add due to rounding.
CONTACT: Intersil Investor Relations
Meghan Dalton, 321/729-5738
E-Mail: mdalton@intersil.com
or
Intersil Public Relations
Brent Dietz, 321/729-5973
E-Mail: bdietz@intersil.com |
