Intersil Corporation Reports First Quarter Results

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the accompanying press release.

As presented in the "Non-GAAP Results" tables in the accompanying press release, each of the non-GAAP financial measures excludes one or more of the following items:

Acquisition related.  Acquisition-related charges are not factored into management's evaluation of potential acquisitions or Intersil's performance after completion of acquisitions, because they are not related to the Company's core operating performance. Adjustments of these items provide investors with a basis to compare Intersil's performance to other companies without the variability caused by purchase accounting. Acquisition-related expenses primarily include:

  • Amortization of acquisition related intangibles, which include acquired intangibles such as purchased technology, patents, customer relationships, trademarks, backlog and non-compete agreements.

Restructuring and related costs. Restructuring charges primarily relate to changes in Intersil's infrastructure in efforts to reduce costs and rebalance its workforce. Restructuring charges (gains) are excluded from non-GAAP financial measures because they are not considered core operating activities. Although Intersil has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. As such, management believes that it is appropriate to exclude restructuring charges (gains) from Intersil's non-GAAP financial measures as it enhances the ability of investors to compare the Company's period-over-period operating results from continuing operations. Restructuring-related charges (gains) primarily include:

  • Severance and retention costs directly related to a restructuring action.
  • Facility closure costs consist of ongoing costs associated with the exit of our leased and owned facilities.
  • Other write-offs such as intangibles related to a restructuring action.

Other adjustments. These items are excluded from non-GAAP financial measures because they are not related to the core operating activities and on-going future operating performance of Intersil. Excluding this data allows investors to better compare Intersil's period-over-period performance without such expense, which Intersil believes may be useful to the investor community. Other adjustments primarily include:

  • Equity-based compensation expense.
  • Legal or governmental judgments, awards, fines or penalties.
  • Income from IP agreement.
  • Write-offs (recoveries) related to Auction Rate Securities.
  • Tax effects of non-GAAP adjustments.
  • Diluted weighted average shares non-GAAP adjustment, for purposes of calculating non-GAAP diluted earnings per share, the GAAP diluted weighted average shares outstanding is adjusted to exclude the benefits of equity-based compensation expense attributable to future services not yet recognized in the financial statements that are treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.

Comparability. The above criteria has been consistently applied when calculating the non-GAAP financial measures for all periods presented in this press release and accompanying tables. During the second quarter of fiscal 2013 we revised our non-GAAP financial information to reduce the types of items excluded from our non-GAAP presentation in an effort to increase comparability of our results with published earnings estimates widely available on the Internet.  In the past we excluded other items such as the compensation expense(benefit) associated with our non-qualified deferred compensation plan, CEO severance costs, loss on interest-rate swaps, and related tax effects of these items, from our non-GAAP financial information. As a result, a non-GAAP financial measure presented in the accompanying press release tables may be different from that presented in a prior press release.

 

Intersil Corporation

Condensed Consolidated Statements of Operations

Unaudited

(In thousands, except percentages and per share amounts)








Quarter Ended


Apr. 3,


Jan. 2,


Apr. 4,


2015


2015


2014


Q1 2015


Q4 2014


Q1 2014







Revenue

$ 134,153


$ 131,126


$ 140,056

Cost of revenue

53,827


52,933


61,151

Gross profit

80,326


78,193


78,905

    Gross margin %

59.9%


59.6%


56.3%

Expenses:






    Research and development 

32,017


30,367


31,799

    Selling, general and administrative 

25,453


24,840


22,767

    Amortization of purchased intangibles

5,561


5,559


5,561

    Provision for export compliance settlement

-


-


4,000

    Provision for TAOS litigation

81,100


-


-

Total expenses

144,131


60,766


64,127

Operating (loss) income

(63,805)


17,427


14,778

    Interest expense and other

(257)


(316)


(488)

    Gain on investments, net

773


827


364

(Loss) income before income taxes

(63,289)


17,938


14,654

    Income tax expense

5,535


664


4,649

Net (loss) income

$  (68,824)


$   17,274


$   10,005







(Loss) earnings per share: 






    Basic

$      (0.53)


$       0.13


$       0.08

    Diluted

$      (0.53)


$       0.13


$       0.08







Weighted average shares outstanding:






    Basic

130,513


130,138


127,819

    Diluted

130,513


132,276


129,389








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