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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 October 4, 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 November 11, 2002:
 
Title of Each Class
   
Number of Shares
Class A common stock, par value $.01 per share
   
129,044,028
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
     
       
  1
       
  2
       
  3
       
  4
       
  5
Item 2.
      
15
Item 3.
      
24
Item 4.
      
24
PART II.    OTHER INFORMATION
     
Item 1.
      
25
Item 6.
      
27
    
Chief Financial Officer
   
28
    
Chief Executive Officer
   
29
Chief Financial Officer
   
30

Table of Contents
 
PART I.    FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS
 
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
    
14 Weeks Ended October 4, 2002
     
13 Weeks Ended September 28, 2001
     
40 Weeks Ended October 4, 2002
     
39 Weeks Ended September 28, 2001
  
    
(Unaudited)
  
    
(in thousands, except per share amounts)
  
Revenue
                                    
Product sales
   
$
191,315
 
   
$
113,391
 
   
$
469,783
 
   
$
359,453
 
Costs and expenses
                                    
Cost of product sales
   
 
88,095
 
   
 
55,793
 
   
 
220,086
 
   
 
200,192
 
Research and development
   
 
37,060
 
   
 
25,391
 
   
 
96,118
 
   
 
80,591
 
Selling, general and administrative
   
 
30,930
 
   
 
21,387
 
   
 
83,038
 
   
 
71,249
 
Amortization of intangibles and unearned compensation
   
 
9,228
 
   
 
11,328
 
   
 
17,310
 
   
 
33,594
 
Impairment of long-lived assets
   
 
—  
 
   
 
—  
 
   
 
6,159
 
   
 
7,583
 
Restructuring
   
 
—  
 
   
 
—  
 
   
 
5,324
 
   
 
32,419
 
Write-off of in-process research and development
   
 
—  
 
   
 
—  
 
   
 
53,816
 
   
 
—  
 
    
  
  
  
Operating income (loss)
   
 
26,002
 
   
 
(508
)
   
 
(12,068
)
   
 
(66,175
)
Loss on investments
   
 
—  
 
   
 
—  
 
   
 
1,736
 
   
 
8,242
 
Interest expense
   
 
205
 
   
 
301
 
   
 
763
 
   
 
2,026
 
Interest income
   
 
(2,962
)
   
 
(5,439
)
   
 
(8,977
)
   
 
(16,939
)
    
  
  
  
Income (loss) before sale of certain assets, income taxes and extraordinary item
   
 
28,759
 
   
 
4,630
 
   
 
(5,590
)
   
 
(59,504
)
Operating results of certain operations disposed of
during 2001
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(3,019
)
Gain on sale of certain operations
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
168,437
 
    
  
  
  
Income (loss) before income taxes and extraordinary item
   
 
28,759
 
   
 
4,630
 
   
 
(5,590
)
   
 
105,914
 
Income taxes (benefit)
   
 
25,207
 
   
 
7,911
 
   
 
(4,677
)
   
 
57,376
 
    
  
  
  
Income (loss) before extraordinary item
   
 
3,552
 
   
 
(3,281
)
   
 
(913
)
   
 
48,538
 
Extraordinary item—loss on extinguishment of debt,
net of tax effect
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(12,185
)
    
  
  
  
Net income (loss) to common shareholders
   
$
3,552
 
   
$
(3,281
)
   
$
(913
)
   
$
36,353
 
    
  
  
  
Basic income (loss) per share
                                    
Income before extraordinary item
   
$
0.03
 
   
$
(0.03
)
   
$
(0.01
)
   
$
0.46
 
Extraordinary item
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
$
(0.12
)
    
  
  
  
Net income (loss)
   
$
0.03
 
   
$
(0.03
)
   
$
(0.01
)
   
$
0.34
 
    
  
  
  
Diluted income (loss) per share
                                    
Income before extraordinary item
   
$
0.03
 
   
$
(0.03
)
   
$
(0.01
)
   
$
0.44
 
Extraordinary item
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
(0.11
)
    
  
  
  
Net income (loss)
   
$
0.03
 
   
$
(0.03
)
   
$
(0.01
)
   
$
0.33
 
    
  
  
  
Weighted average common shares outstanding (in millions):
                                    
Basic
   
 
136.4
 
   
 
105.7
 
   
 
122.0
 
   
 
105.5
 
    
  
  
  
Diluted
   
 
140.7
 
   
 
105.7
 
   
 
122.0
 
   
 
108.9
 
    
  
  
  
 
See notes to condensed consolidated financial statements.

1

Table of Contents
 
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
    
14 Weeks Ended
October 4, 2002
     
13 Weeks Ended
September 28, 2001
     
40 Weeks Ended
October 4, 2002
     
39 Weeks Ended
September 28, 2001
  
    
(Unaudited)
  
    
(in thousands)
  
Net income (loss)
   
$
3,552
 
   
$
(3,281
)
   
$
(913
)
   
$
36,353
 
Other comprehensive income (loss):
                                    
Currency translation adjustments.
   
 
(4
)
   
 
179
 
   
 
248
 
   
 
78
 
Unrealized loss on available-for-sale securities
   
 
(4,702
)
   
 
(1,684
)
   
 
(5,069
)
   
 
(1,684
)
    
  
  
  
Comprehensive income (loss)
   
$
(1,154
)
   
$
(4,786
)
   
$
(5,734
)
   
$
34,747
 
    
  
  
  
 
See notes to condensed consolidated financial statements.

2

Table of Contents
 
INTERSIL CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
    
October 4, 2002
     
December 28, 2001
  
    
(Unaudited)
         
    
(in thousands)
  
Assets
                  
Current Assets
                  
Cash and cash equivalents
   
$
514,634
 
   
$
554,119
 
Short-term investments
   
 
82,211
 
   
 
47,334
 
Trade receivables, less allowances for collection loss ($1,233 as of October 4, 2002 and $534 as of December 28, 2001)
   
 
87,584
 
   
 
55,178
 
Inventories, net
   
 
96,739
 
   
 
67,888
 
Prepaid expenses and other current assets
   
 
12,042
 
   
 
9,122
 
Deferred income taxes
   
 
56,534
 
   
 
33,807
 
    
  
Total Current Assets
   
 
849,744
 
   
 
767,448
 
Other Assets
                  
Property, plant and equipment, less allowances for depreciation ($87,631 as of October 4, 2002 and $63,051 as of December 28, 2001)
   
 
155,511
 
   
 
140,068
 
Intangibles, less accumulated amortization ($72,887 as of October 4, 2002 and $65,820 as of December 28, 2001)
   
 
1,323,350
 
   
 
241,078
 
Investments
   
 
30,472
 
   
 
41,701
 
Other
   
 
7,297