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Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
x
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 28, 2002
 
OR
 
 
¨
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                                          to                                     
 
Commission File Number: 000-29617
 
 
INTERSIL CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
     
59-3590018
(State or Other Jurisdiction of
Incorporation or Organization)
  
(IRS Employer
Identification No.)
 
7585 Irvine Center Drive
Suite 100
 
Irvine, California 92618
(Address of principal executive offices, including zip code)
 
(949) 341-7000
(Registrant’s telephone number, including area code)
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   x   No    ¨
 
The number of shares outstanding of each of the issuer’s classes of common stock as of the close of business on August 8, 2002:
 
Title of Each Class
   
Number of Shares
Class A common stock, par value $.01 per share
   
128,675,325
Class B common stock, par value $.01 per share
   
7,786,719
 

Table of Contents
 
INTERSIL CORPORATION
 
INDEX
 
Table of Contents
 
         
Page
    
PART I.    FINANCIAL INFORMATION
     
Item 1.
   
Financial Statements
     
       
2
       
3
       
4
       
5
       
6
Item 2.
      
13
Item 3.
      
21
    
PART II.    OTHER INFORMATION
     
Item 1.
      
22
Item 4.
      
23
Item 6.
      
24
    
SIGNATURES
     
       
25
       
25

1

Table of Contents
PART I.    FINANCIAL INFORMATION
 
Item 1.     Financial Statements
 
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
    
13 Weeks Ended
     
26 Weeks Ended
  
    
June 28,
     
June 29,
     
June 28,
     
June 29,
  
    
2002
     
2001
     
2002
     
2001
  
    
(Unaudited)
  
    
(in thousands, except per share amounts)
  
Revenue
                                    
Product sales
   
$
144,343
 
   
$
118,295
 
   
$
278,468
 
   
$
246,061
 
Costs and expenses
                                    
Cost of product sales
   
 
68,965
 
   
 
58,775
 
   
 
131,991
 
   
 
144,401
 
Research and development
   
 
31,232
 
   
 
28,411
 
   
 
59,059
 
   
 
55,195
 
Selling, general and administrative
   
 
28,349
 
   
 
24,226
 
   
 
52,107
 
   
 
49,884
 
Intangible amortization
   
 
5,800
 
   
 
10,952
 
   
 
8,082
 
   
 
22,614
 
Impairment of long-lived assets
   
 
6,159
 
   
 
—  
 
   
 
6,159
 
   
 
7,583
 
Restructuring
   
 
5,324
 
   
 
—  
 
   
 
5,324
 
   
 
32,419
 
Write-off of in-process research and development
   
 
53,816
 
   
 
—  
 
   
 
53,816
 
   
 
—  
 
    
  
  
  
Operating loss
   
 
(55,302
)
   
 
(4,069
)
   
 
(38,070
)
   
 
(66,035
)
Loss on investments
   
 
1,736
 
   
 
—  
 
   
 
1,736
 
   
 
8,242
 
Interest expense
   
 
229
 
   
 
139
 
   
 
558
 
   
 
1,726
 
Interest income
   
 
(3,060
)
   
 
(6,730
)
   
 
(6,014
)
   
 
(11,500
)
    
  
  
  
Income (loss) before sale of certain assets, income taxes and extraordinary item
   
 
(54,207
)
   
 
2,522
 
   
 
(34,350
)
   
 
(64,503
)
    
  
  
  
Operating results of certain operations disposed of during 2001
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(2,650
)
Gain on sale of certain operations
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
168,437
 
    
  
  
  
    
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
165,787
 
    
  
  
  
Income (loss) before income taxes and extraordinary item
   
 
(54,207
)
   
 
2,522
 
   
 
(34,350
)
   
 
101,284
 
Income taxes (benefit)
   
 
(35,916
)
   
 
1,295
 
   
 
(29,884
)
   
 
49,465
 
    
  
  
  
Income (loss) before extraordinary item
   
 
(18,291
)
   
 
1,227
 
   
 
(4,466
)
   
 
51,819
 
Extraordinary item—loss on extinguishment of debt, net of tax effect
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(12,185
)
    
  
  
  
Net income (loss) to common shareholders
   
$
(18,291
)
   
$
1,227
 
   
$
(4,466
)
   
$
39,634
 
    
  
  
  
Basic income (loss) per share
                                    
Income before extraordinary item
   
$
(0.15
)
   
$
0.01
 
   
$
(0.04
)
   
$
0.49
 
Extraordinary item
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(0.11
)
    
  
  
  
Net income (loss)
   
$
(0.15
)
   
$
0.01
 
   
$
(0.04
)
   
$
0.38
 
    
  
  
  
Diluted income (loss) per share
                                    
Income before extraordinary item
   
$
(0.15
)
   
$
0.01
 
   
$
(0.04
)
   
$
0.47
 
Extraordinary item
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(0.11
)
    
  
  
  
Net income (loss)
   
$
(0.15
)
   
$
0.01
 
   
$
(0.04
)
   
$
0.36
 
    
  
  
  
Weighted average common shares outstanding (in millions):
                                    
Basic
   
 
121.6
 
   
 
105.5
 
   
 
114.3
 
   
 
105.4
 
    
  
  
  
Diluted
   
 
121.6
 
   
 
108.9
 
   
 
114.3
 
   
 
108.7
 
    
  
  
  
 
See notes to condensed consolidated financial statements.

2

Table of Contents
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
    
13 Weeks Ended
     
26 Weeks Ended
  
    
June 28,
     
June 29,
     
June 28,
     
June 29,
  
    
2002
     
2001
     
2002
     
2001
  
    
(Unaudited)
  
    
(in thousands)
  
Net income (loss)
   
$
(18,291
)
   
$
1,227
 
   
$
(4,466
)
   
$
39,634
 
Other comprehensive income (loss):
                                    
Currency translation adjustments.
   
 
491
 
   
 
(8
)
   
 
252
 
   
 
(240
)
Unrealized loss on available-for-sale securities
   
 
(4,047
)
   
 
—  
 
   
 
(366
)
   
 
—  
 
    
  
  
  
Comprehensive income (loss)
   
$
(21,847
)
   
$
1,219
 
   
$
(4,580
)
   
$
39,394
 
    
  
  
  
 
 
 
See notes to condensed consolidated financial statements.
 

3

Table of Contents
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
    
June 28,
2002
     
December 28,
2001
  
    
(Unaudited)
         
    
(in thousands)
  
Assets
                  
Current Assets
                  
Cash and cash equivalents
   
$
609,114
 
   
$
601,453
 
Trade receivables, less allowances for collection loss ($1,222 as of June 28, 2002 and $534 as of December 28, 2001)
   
 
80,519
 
   
 
55,178
 
Inventories, net
   
 
97,349
 
   
 
67,888
 
Prepaid expenses and other current assets
   
 
9,756
 
   
 
9,122
 
Deferred income taxes
   
 
81,816
 
   
 
33,807
 
    
  
Total Current Assets
   
 
878,554
 
   
 
767,448
 
Other Assets