Intersil Reports Increasing Revenue and Margins
Intersil Corp. reported revenue for the first quarter ended March 31, 2006 net revenue was $178.9 million, up 40% from the same quarter last year, and up 2% sequentially. Gross margins were 57.0% as compared to gross margins of 55.0% in the same quarter last year, and 56.5% in the fourth quarter. Operating margins were 20.3% as compared to operating margins of 10.0% in the first quarter of 2005, and 22.8% in the fourth quarter. Net income was $32.4 million including stock based compensation expense or $0.22 earnings per diluted share as compared to net income of $12.8 million or $0.09 earnings per diluted share in the same quarter last year. For the fourth quarter, net income was $28.7 million or $0.20 earnings per diluted share.
Gross margins were 57.3%. This compares to gross margins of 55.3% for the same quarter last year, and 56.6% for the fourth quarter. Operating margins were 27.4%. This compares to operating margins of 15.3% for the first quarter of 2005, and 26.1% for the fourth quarter. Net income was $41.3 million or $0.28 earnings per diluted share. This compares to net income of $17.5 million or $0.12 earnings per diluted share for the same quarter last year, and $39.3 million or $0.27 earnings per diluted share for the fourth quarter.
"With our first quarter results, 2006 is off to a great start," stated Rich Beyer, Intersil's Chief Executive Officer. "Our business continues to perform exceptionally well, as we posted quarterly highs in revenue, net income and earnings per share. We were pleased that we were able to grow revenue 40% from the same quarter last year, and 2% sequentially in a quarter that is typically down due to seasonality. For the sixth consecutive quarter we improved non-GAAP gross margins, and our operating margins are now within our target model of 27% to 30%. We also generated over $55 million in cash from operations, or 31% of sales, for the quarter. This performance further demonstrates our continued progress in expanding our revenue stream across a broad portfolio of products. This broad portfolio is enabling us to smooth out normal seasonality and to deliver consistent revenue and earnings growth."
By end market, Intersil's first quarter sales were as follows: computing (28% of sales), industrial (25% of sales), high-end consumer (25%) and communications (22%). "Our sales into the communications, industrial and computing markets all experienced strong sequential growth," said Lou DiNardo, Intersil's President and Chief Operating Officer. "The revenue growth into the communications and industrial markets was driven by an increase in seasonal demand and the ramping of numerous 2005 design wins. Sales into the computing market experienced healthy sequential growth in a quarter that is typically down, as we continued to ramp new product design wins for our notebook products. Our revenue into the high-end consumer market was down sequentially, as expected, due to seasonality."
"Our first quarter was another excellent quarter for Intersil. Given our continued design win successes and strong orders momentum, we are positioned well for additional growth in the second quarter," said Mr. Beyer. "We expect our second quarter revenue to grow between 3% to 5% from the first quarter. We expect GAAP earnings per share of approximately $0.23 to $0.24 and non-GAAP earnings per share of approximately $0.29 to $0.30."