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Intersil Corporation Reports First Quarter Results

MILPITAS, Calif., April 26, 2016 /PRNewswire/ -- Intersil Corporation ISIL, -6.72% a leading provider of innovative power management and precision analog solutions, today announced financial results for the first quarter ended April 1, 2016. First quarter revenue of $129.3 million was up 2.1% sequentially. Gross margin also increased sequentially, operating expenses remained in line with expectations, and the company sustained strong operating income levels.

Company Highlights

  • Consumer and Computing (C&C) revenue was better than seasonal, increasing year-over-year by over 8%.
  • Infrastructure and Industrial (I&I) demand improved broadly, resulting in 4% sequential growth.
  • Gross margin increased sequentially by 120 and 130 basis points, respectively, to 58.8% on a GAAP basis and 59.1% on a non-GAAP basis.
  • The company again reported solid profitability, with non-GAAP operating margin of 20% or greater for the 11 [th] consecutive quarter.
  • Cash and cash equivalents increased to $254 million at quarter-end.

Quarterly Results Revenue for the first quarter was better than seasonal due to ramps of new business in C&C, record revenue in automotive, and recovery in infrastructure and industrial markets. I&I revenue increased 4% sequentially, with automotive, power and analog growing in the quarter. Automotive revenue reached another record as strong end-market demand and new business propelled the business forward. First quarter C&C revenue decreased only 1% sequentially and was up over 8% year over year. The company's new products shipping into high profile mobile platforms were behind the better than seasonal result. The breakdown by end market follows:


Q1 2016


Q4 2015


Q1 2015

End Market Revenue

$M


%


$M


%


$M


%

Infrastructure & Industrial

82.2


64%


79.1


62%


90.7


68%

Consumer & Computing

47.1


36%


47.5


38%


43.5


32%

Total Revenue

$129.3




$126.6




$134.2



Table 1. Intersil End Market Mix

GAAP gross margin for the quarter increased to 58.8%. First quarter GAAP operating expenses increased to $60.8 million as a result of increasing R&D investment. R&D expense was $33.7 million and SG&A expense was $23.6 million. First quarter GAAP operating income was $15.2 million or 11.8% of revenue. GAAP net income was $11.8 million, and fully diluted GAAP earnings per share were $0.09.

The following non-GAAP results exclude amortization of purchased intangibles, equity-based compensation expense, certain legal judgments and governmental penalties, acquisition-related charges, and gain on recovery of auction rate securities, as well as the related tax effects. First quarter non-GAAP gross margin increased by 130 basis points to 59.1%. Non-GAAP R&D investment increased to $30.6 million while non-GAAP SG&A decreased to $20.0 million, resulting in total non-GAAP operating expense of $50.6 million for the quarter. Q1 non-GAAP operating income increased to $25.8 million, resulting in non-GAAP operating margin of 20.0%. Fully diluted Q1 earnings per share on a non-GAAP basis were $0.15.

For a complete reconciliation of GAAP and non-GAAP results, please see the "Non-GAAP Results" tables included at the end of this release.

Cash and cash equivalents increased again to $254 million at the end of the first quarter. Intersil's board of directors authorized payment of a quarterly dividend of $0.12 per share of common stock. The payment of this dividend will be made on or about May 27, 2016 to shareholders of record as of the close of business on May 17, 2016.

"Q1 was a solid quarter, with new product ramps and a stabilizing demand environment," said Necip Sayiner, president and CEO of Intersil. "We're encouraged by the strong design activity and momentum building across all of our investment businesses."

Second Quarter 2016 Outlook

The following forward-looking guidance is for the second quarter ending July 1, 2016, based on current business trends and conditions:


GAAP

Non-GAAP

Revenue

$130 to $136 million

Gross margin

Up 50 to 75 bps

Operating expenses

$64M to $65M

$52M to $53M

Earnings per share

$0.08 to $0.10

$0.15 to $0.17

Table 2. Intersil Q2 2016 Outlook

Earnings Call Webcast Intersil will be hosting a webcast to discuss the quarterly results and outlook today at 1:30 p.m. Pacific Time. To access the webcast, please visit the investor relations page of the company's website at ir.intersil.com. Participants can also dial (888) 656-8682 or +1 (503) 343-6028 and enter the passcode 87919628. A replay of the webcast will be available for two weeks following the conference call on the company website, or may be accessed by dialing (855) 859-2056, international dial +1 (404) 537-3406, using the passcode 98625303.

About Intersil Intersil Corporation is a leading provider of innovative power management and precision analog solutions. The company's products form the building blocks of increasingly intelligent, mobile and power hungry electronics, enabling advances in power management to improve efficiency and extend battery life. With a deep portfolio of intellectual property and a rich history of design and process innovation, Intersil is the trusted partner to leading companies in some of the world's largest markets, including industrial and infrastructure, mobile computing, automotive and aerospace. For more information about Intersil, visit our website at www.intersil.com.

FORWARD-LOOKING STATEMENTS Some of the statements included in this press release constitute forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, as defined in connection with the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current expectations, estimates, beliefs, assumptions, and projections of our senior management about future events with respect to our business and our industry in general. Statements that include words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "potential," "continue," "goals," "targets" and variations of these words (or negatives of these words) or similar expressions of a future or forward-looking nature identify forward-looking statements. In addition, any statements that refer to projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions...


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