Intersil Reports Strong Third Quarter Results

November 04, 2013 by Jeff Shepard

Intersil Corporation's financial results for the third quarter ended October 4, 2013, include the following quarterly highlights: Revenue of $152.6 million increased 5% sequentially, and 1% year over year. Non-GAAP gross margin improved 30 bps sequentially and 140 bps year over year. Non-GAAP operating margin improved to 20%. And $0.06 per share GAAP loss was driven primarily by one-time events, while non-GAAP EPS increased by 43% sequentially and 100% year over year to $0.20.

Revenue for the third quarter was $152.6 million, a slight increase compared to the same period last year. Intersil's industrial and infrastructure revenue grew sequentially, which was better than expected due to healthy demand in automotive and aerospace. Consumer revenue increased 25% sequentially reflecting seasonal strength particularly for products sold into handsets, tablets and gaming consoles. Computing revenue remained stable, also reflecting seasonal strength.

On a GAAP basis, gross margin of 55.4% improved from 54.1% in the same period last year. GAAP operating expenses were $79.5 million resulting in income from operations of $5.1 million or 3.3% of revenue for the quarter. An unusually high tax provision resulted in a GAAP net loss for the quarter of $0.06 per diluted share.

Non-GAAP gross margin rose to 55.7% from 54.3% in the same period last year. Non-GAAP operating expenses decreased to $54.4 million, or 35.7% of revenue. This resulted in a non-GAAP operating margin of 20%, a meaningful improvement both on a sequential and year over year basis. Non-GAAP net income nearly doubled compared to the same period last year to $25.8 million or $0.20 per diluted share.

Cash flow from operations was $19.6 million and contributed to an increase in cash and short-term investments to $166.8 million at the end of the 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 November 29, 2013 to shareholders of record as of the close of business on November 19, 2013.

"The third quarter results demonstrate our ability to run the business at an attractive profitability level while augmenting the design horsepower we need to rebuild for the future," said Necip Sayiner, president and CEO of Intersil. "I'm pleased with the early progress we've made and the focus and drive of the Intersil team as we work together to execute the strategy we've outlined."