Intersil Corporation Reports Fourth Quarter and Year End Results

For the fourth quarter, GAAP operating expenses decreased to $60.8 million. GAAP gross margin increased to 59.6% and GAAP operating income was $17.4 million or 13.3% of sales. GAAP net income for the quarter increased to $17.3 million or $0.13 per diluted share.  For the full year, GAAP gross margin of 58.1% improved 310 bps from 55% in 2013. GAAP operating expenses declined to $252.0 million. GAAP net income increased to $54.8 million resulting in GAAP diluted earnings per share of $0.41, up from $0.02 in 2013.

Non-GAAP gross margin improved again for the seventh consecutive quarter to 59.8% due to favorable mix. The company controlled spending and reduced total operating expenses to $50.5 million. Q4 non-GAAP operating income was $28 million resulting in operating margin of 21.3%. Including Q4, the company met or exceeded its 20 percent non-GAAP operating income goal in each of the last six quarters.  Fully diluted Q4 earnings per share on a non-GAAP basis were $0.18, which included a three cent benefit from the reinstatement of the US R&D tax credit. For the full year, non-GAAP gross margin improved to 58.3% from 55.3% in 2013 reflecting improving mix within each of the major product categories. Non-GAAP operating expenses declined to $208.4 million.

Non-GAAP diluted earnings per share for the full year increased from $0.59 to $0.73, a 24% improvement. For a complete reconciliation of GAAP and non-GAAP results, please see the "Non-GAAP Results" table included at the end of this release.

Cash and short-term investments totaled $211 million at the end of the fourth 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 February 27, 2015, to shareholders of record as of the close of business on February 17, 2015.

First Quarter 2015 Outlook

The following forward looking guidance is for the first quarter ending April 3, 2015, based on current business trends and conditions:


Reconciling items



$131-$136 million

$131-$136 million

Gross margin

Down 50 to 100 bps

Down 50 to 100 bps

Operating expenses

$63-$64 million

$4-$5 million equity-based compensation

$5.6 million amortization of purchased intangibles

$53-$54 million

Earnings per share

$0.07 to $0.08

$0.14 to $0.16

Table 2. Intersil Q1 2015 Outlook

Non-GAAP Long-term Target Model Introduced

Entering a new phase in the company's development and anticipating a return to growth, the management team introduced a new target operating model outlined below. The new long-term, non-GAAP target was provided to help investors evaluate management's progress towards improving the business over time.

Gross Margin

≥ 60%

R&D Expense

20-21% of Revenue

SG&A Expense

14-15% of Revenue

Operating Margin


Table 3. Intersil Non-GAAP Long-term Target Operating Model Introduced Today

"With a number of revenue transitions behind us and the R&D investments in new products poised to begin generating revenue, we're starting 2015 with a strong foundation," said Necip Sayiner, president and CEO of Intersil. "Our newly introduced target model raises the bar for profitability and underscores the confidence we have as a team in Intersil's potential."

Earnings Call Webcast
Intersil will be hosting a webcast to discuss the quarterly results and outlook today at 1:45 p.m. Pacific Time. To access the webcast, please visit the investor relations page of the company's website at Participants can also dial (800) 798-2864 or +1 (617) 614-6206 and enter the pass code 85043075. 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 (888) 286-8010, international dial +1 (617) 801-6888, using the pass code 15087044.

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

Intersil Corporation press releases and other related comments may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, in connection with the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based upon Intersil's management's current expectations, estimates, beliefs, assumptions and projections about Intersil's business and industry. 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, are intended to 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 that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various risk factors.

Important factors that may affect our business, future operating results and financial condition include: any faltering in global economic conditions, the highly cyclical nature of the semiconductor industry, intense competition in the semiconductor industry, unsuccessful product development or failure to obtain market acceptance of our products, downturns in the computing market, failure to make or deliver products in a timely manner, unavailability of raw materials, services, supplies or manufacturing capacity, delays in production or in implementing new production techniques, product defects or unreliability of products, adverse results in litigation matters, and other risk factors described in Intersil's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Intersil filings with the U.S. Securities and Exchange Commission (which you may obtain for free at the SEC's web site at ). These forward-looking statements are made only as of the date of this communication and Intersil undertakes no obligation to update or revise these forward-looking statements. Intersil does not adopt and is not responsible for any forward-looking statements and projections made by others in this press release.

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