Intersil Corporation (Intersil) has reported net revenues of $769.7 million for the year-end 2008, up 2%, compared with the net revenues of $757 million in the previous year-end. It has also reported a net loss of $1 billion, or $8.33 loss per diluted share, for the year-end 2008, compared with the net income of $140.5 million, or $1.05 per diluted share, in the previous year-end.
Net revenue for the fourth quarter was $131.1 million, a 38% decline from $212.6 million in the fourth quarter of 2007 and a 40% decline from $218.7 million in the third quarter of 2008. For the fiscal year ended January 2, 2009, net revenue was $769.7 million, a 2% increase compared with $757.0 million reported for fiscal year 2007.
Generally Accepted Accounting Principles (GAAP) Results
The company reported a net loss of $1,182.7 million or $9.68 per share for the fourth quarter of 2008, compared with net income of $40.3 million, or $0.31 per diluted share in the same quarter last year. For the third quarter of 2008, the company reported net income of $47.3 million, or $0.38 per diluted share. Net loss was $1,030.3 million or $8.33 per share for fiscal year 2008 as compared with net income of $140.5 million or $1.05 per diluted share in the previous fiscal year.
The following unusual items affected the financial results in the fourth quarter:
The company recorded an estimated $1,146.1 million charge for impairment of goodwill. The non-cash impairment expense was caused primarily by a sustained market capitalization below the company net book value.
The company recorded $30.2 million in additional expenses in cost of sales due to reductions in the value of inventory and fixed assets and a loss on a contractual obligation caused primarily by a broad reduction in current demand for the Company’s products.
The company recorded a $25.4 million impairment of its long-term investments to reflect the continuing decline in the fair market value of its auction rate securities.
The company recorded $3.2 million in restructuring charges related to severance and other charges to streamline operations and reduce certain operating expenses.
Non-GAAP net income for the fourth quarter declined by 75% to $13.0 million and non-GAAP diluted earnings per share declined 72% to $0.11 compared to the same quarter last year. This decline is primarily due to a significant decrease in sales, reflecting the global decline in economic conditions in the fourth quarter of 2008.
Intersil’s fourth quarter revenues by end market were as follows: high-end consumer, 25.2% of revenues; computing, 22.4% of revenues; industrial, 26.9% of revenues; and communications, 25.5% of revenues.
“This has been a very challenging quarter for the entire semiconductor industry, but Intersil responded quickly to the downturn,” said Dave Bell, Intersil’s president and chief executive officer. “Cost savings realized by our recent restructuring enabled us to offset increased investments in R&D from the recent Kenet and Zilker Labs acquisitions. In addition, we have taken significant steps to reduce our inventory, as well as inventory in the supply chain. We are pleased that despite the steep revenue decline, we generated over $50 million in free cash flow during the quarter.”
“We continue to have one of the strongest balance sheets in the industry with $313 million in cash and short-term investments and no debt. I am pleased that we were once again able to take advantage of the weak economy to close another very strategic acquisition with the purchase of Zilker Labs, a leader in digital power management,” continued Bell.
During the quarter, the company repurchased $15 million or 1.3 million shares of its stock, under a previously announced stock repurchase program.
“Bookings deteriorated throughout the fourth quarter and market conditions continue to be weak across most of our product families,” said Bell. “Our customers are placing orders with short lead-times and visibility remains very limited. We expect revenue in the first quarter to be in the range of $105 to $115 million. We will continue to carefully control our operating expenses and improve working capital. However, we expect a GAAP loss per share between $0.02 and $0.06. Despite the loss, we expect continued positive free cash flow.”