Intersil Corp. (Milpitas, CA) reported financial results for the quarter ended July 1, 2005. On a generally accepted accounting principles (GAAP) basis, net revenue was $139.1 million for the second quarter of 2005, up 9% from the first quarter of 2005. For the second quarter of 2004, net revenue was $144.2 million. Net income for the second quarter of 2005 was $17.3 million or $0.12 diluted earnings per share as compared to net income of $12.8 million or $0.09 diluted earnings per share in the first quarter of 2005. For the second quarter of 2004, net income was $27.2 million or $0.19 diluted earnings per share.
Non-GAAP net income for the second quarter of 2005 was $21.5 million or $0.15 diluted earnings per share. This compares to non-GAAP net income of $17.5 million or $0.12 diluted earnings per share for the first quarter of 2005 and $27.9 million or $0.20 diluted earnings per share for the second quarter of 2004.
"We are extremely pleased with our 9% sequential revenue growth and record orders for the quarter. We also improved our non-GAAP net income by over 22%," stated Rich Beyer, Intersil's CEO and president. "We continue to see traction from our growth initiatives and are pleased with their collective progress. Of our 40 product families, a significant percentage showed growth from the previous quarter, and in total, three of our four end markets grew from the first quarter. We are very excited about our design win successes, orders momentum and revenue growth, as they are across numerous product lines and geographies. Our broad based portfolio should drive continued strong growth for Intersil."
By end market, Intersil's second quarter sales were as follows: high-end consumer (27% of sales), industrial (27%), communications (24%), computing (22%). "The consumer market experienced the strongest sequential growth, driven by the rapid revenue expansion in our handheld and display families, along with a rebound in optical storage," said Mr. Beyer. "The communications market was particularly strong driven by increased DSL demand. The computing market experienced single-digit percentage revenue growth, and the industrial market was basically flat with the first quarter."
The Company reported gross margins of 55.5% for the quarter, compared to 55.3% in the first quarter of 2005. The Company improved its working capital and decreased inventory by $2.0 million during the second quarter. Operating cash flow for the second quarter was over $25 million, or 18% of sales, and the Company exited the second quarter with approximately $690 million in cash and marketable securities, and no debt.
The Company repurchased approximately $35.7 million, or 1.9 million shares of its stock, under its previously announced stock repurchase program. Additionally, as a result of Intersil's continued positive cash flow and strong balance sheet position, the Company's board of directors authorized and declared the payment of a quarterly dividend of $0.04 per share of common stock. Payment of the dividend will be made on August 22, 2005 to shareholders of record as of the close of business on August 11, 2005.
"Based on the strongest orders quarter in our history as a pure high performance analog company and our continuing design win momentum, we are well positioned to once again grow sequentially in the upcoming quarter," said Mr. Beyer. "We expect our third quarter revenue to grow between 5 to 7% from the second quarter. We also expect non-GAAP earnings per share of approximately $0.17."
