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Product category: Communications ICs (Wired)
News Release from: Intersil
Edited by the Electronicstalk Editorial Team on 25 October 2002

Intersil figures are
better than expected

Intersil Corp has recorded improved financial results for the third quarter ended 4th October 2002

Net revenue for the quarter was $191.3 million, an increase of 9% from the adjusted net revenue of the previous quarter and up 43% from a year ago. Excluding the amortisation of intangibles and the tax effect of acquisition related expenses, adjusted net income for the third quarter was $26.6 million or $0.19 per share.

This compares to $23.0 million or $0.16 per share for the second quarter of 2002 and $12.2 million or $0.09 per diluted share for the same quarter of 2001.

Both revenue and adjusted earnings per share (EPS) results exceeded guidance provided in Intersil's financial update on 4th September 2002.

Net profit for the third quarter of 2002 was $3.6 million or $0.03 per diluted share, compared to a net loss of $18.3 million or $0.15 per diluted share for the prior quarter and a net loss of $3.3 million or $0.03 per diluted share for the same period a year ago.

Intersil's third quarter gross margins reached 54.0%, an increase of 20 basis points from the previous quarter and an increase of 300 basis points from a year ago.

Gross margin improvement came primarily from increasing sales volumes and cost reduction programs, resulting in the sixth consecutive quarter of gross margin expansion.

"With the integration of Elantec virtually complete, Intersil continued its solid execution in the third quarter and continues to be among the fastest growing companies in the semiconductor industry", said Rich Beyer, Intersil's President and CEO.

"Our focus on high growth markets is enabling Intersil to outpace the overall industry and to deliver better than expected financial results.

We experienced particularly strong demand for wireless networking and power management products, with revenues up 26% and 7% from the previous quarter, respectively.

Intersil improved adjusted earnings per share 19% sequentially and 111% on an annual basis, marking our fifth consecutive quarter of EPS improvement".

"The company's balance sheet remains strong with approximately $600 million in cash and no debt", adds Beyer.

"Our days sales outstanding (DSO) remains slightly below 45 days and the company generated $21 million in cash flow from ongoing operating activities during the quarter".

Revenue for Intersil's power management products reached a record $46.9 million during the third quarter, an increase of 7% from the prior quarter and 16% from the third quarter of 2001.

Intersil continues to gain market share in power management for desktop PCs and high-end file servers, while ramping product sales to support notebook PCs, double datarate (DDR) memory and high-end graphics cards.

Among a series of design wins in the quarter, Intersil announced that Gigabyte, a leading PC motherboard manufacturer based in Taiwan, has selected Intersil's Endura products to power both the microprocessor and double datarate (DDR) memory for its award-winning Intel Pentium 4 platforms that incorporate DDR memory.

Sales of Elantec products decreased 15% sequentially and increased 21% year-over-year during the third quarter to $25.0 million.

The company's optical storage and flat panel display business was impacted during the third quarter as OEM customers adjusted inventories as a result of slowing PC sales.

During the third quarter, Philips announced an alliance with Intersil to create a reference design based on a Philips chipset and an Elantec laser driver that will support the industry's fastest DVD recording.

Intersil also reaffirmed its position as the world's leading supplier of laser drivers by introducing the industry's first laser diode driver to support the emerging Blu-Ray standard, which enables five times the capacity of today's DVD recording technology.

Intersil's standard analogue revenue increased 1% sequentially and 7% from the prior year to $33.9 million during the third quarter as the company continues to see expanding acceptance of its analogue multiplexer and interface products.

Intersil's broad portfolio of standard analogue products serves a wide array of computing, communications, test and instrumentation, medical and other applications.

Intersil's wireless networking sales increased 26% from the previous quarter and 152% year-over-year to a record $74.6 million, due to continued demand for the company's industry-leading Prism wireless local area networking (WLAN) solutions.

Microsoft Corporation announced the launch of a Wi-Fi-based (802.11b) broadband networking product line during the quarter that uses the Intersil Prism WLAN solution and includes basestations, client cards and network and USB adapters.

Intersil continued to expand its market leadership in wireless networking with the introduction of its 802.11a Prism Indigo solution, which began production shipments during the quarter.

Prism Indigo offers the industry's best performance and lowest cost bill of materials.

Intersil is now sampling its new Prism Duette, the industry's most highly integrated dual-band 802.11a, b, g WLAN solution, and will be demonstrating its capabilities for select customers, media and analysts at Comdex Fall 2002.

Automotive product sales were $10.8 million in the third quarter as Intersil ramped production to support last-time purchases from automotive customers.

Intersil successfully completed the expected consolidation/closure of its Findlay, Ohio analogue fab and completed the sale of the facility at the end of the quarter.

Looking ahead, Beyer said, "As we are all aware, the semiconductor industry has not yet returned to robust growth and as a result we are more cautious in our near-term outlook.

We now expect total year revenue to slightly exceed our previous guidance of $720 million, representing approximately 25% growth over 2001.

We currently expect sequential revenue growth of 1-3% for the fourth quarter, and approximately 35% over the comparable quarter in the prior year.

We anticipate adjusted earnings per share to grow about 5% sequentially to $0.20 as we continue to achieve sales growth while controlling expenses".

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