Intersil Corporation Reports Fourth Quarter and Full Year Results

(PRNewswire) —   Intersil Corporation (NASDAQ: ISIL), a leading provider of innovative power management and precision analog solutions, today announced financial results for the fourth quarter and the year ended January 1, 2016. Fourth quarter revenue of $126.6 million was down 1.4% sequentially, resulting in revenue of $521.6 million for 2015. Gross margin increased again in 2015, and consistently solid operating results and spending controls throughout the year allowed the company to sustain strong profits and cash generation.

Company Highlights

  • 2015 gross margin increased year-over-year by 90 and 100 basis points respectively to 59.0% on a GAAP basis and 59.3% on a non-GAAP basis.
  • The company again reported solid profitability, with non-GAAP operating margin of 20% or greater for the 10th consecutive quarter.
  • Cash and cash equivalents increased to $247 million at year-end, and the company continued to return a majority of free cash flow to shareholders through one of the sector's highest yielding dividends.

Quarterly Results
Revenue for the fourth quarter declined as anticipated driven by lower demand in industrial and infrastructure end markets. Industrial and Infrastructure (I&I) revenue declined 6% sequentially, with all of the major product categories except automotive declining in the quarter. Automotive product demand remained strong and automotive revenue was a record for the quarter and for the year. Fourth quarter Computing and Consumer (C&C) revenue increased 7.5% sequentially and 3% year-over-year. The company's new display and power management ICs shipped into ramping mobile platforms, which drove the growth for the quarter. The breakdown by end market follows:



Q4 2015


Q3 2015


Q4 2014

End Market Revenue

$M


%


$M


%


$M


%

Industrial & Infrastructure

79.1


62%


84.2


66%


85.0


65%

Consumer & Computing

47.5


38%


44.2


34%


46.1


35%

Total Revenue

$126.6




$128.4




$131.1



Table 1. Intersil End Market Mix

GAAP gross margin for the quarter was 57.6% and 59.0% for the full year. Fourth quarter GAAP operating expenses declined to $57 million. R&D expense was $30.0 million and SG&A expense was $22.8 million. Fourth quarter GAAP operating income was $15.9 million or 12.5% of revenue. GAAP net income was $21.3 million, and fully diluted GAAP earnings per share were $0.16.

For the full year, GAAP operating expenses totaled $322 million, increasing year-over-year as a result of an adverse jury verdict that the company is contesting. This resulted in a GAAP operating loss of $14.2 million. GAAP net income was $7.2 million due to an income tax benefit arising from the release of tax reserves from prior years. Fully diluted 2015 GAAP earnings per share were $0.05.

The following non-GAAP results exclude amortization of purchased intangibles, equity-based compensation expense, certain legal judgments and governmental penalties, gain on recovery of auction rate securities and related tax effects. Fourth quarter non-GAAP gross margin declined as expected to 57.8% as a result of manufacturing variances and mix. Non-GAAP operating expenses declined to $47.9 million as the company continued to closely manage spending. R&D expense was $27.6 million and SG&A expense was $20.3 million . Q4 non-GAAP operating income was $25.3 million , resulting in non-GAAP operating margin of 20%.  Fully diluted Q4 earnings per share on a non-GAAP basis were $0.20 .

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