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 April 4, 2003
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 (State or Other Jurisdiction of Incorporation or Organization) |
59-3590018 (IRS Employer Identification No.) |
675 Trade Zone Boulevard
Milpitas, California 95035
(Address of principal executive offices, including zip code)
(408) 945-1323
(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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
The number of shares outstanding of the issuer’s classes of common stock as of the close of business on May 14, 2003:
| Title of Each Class |
Number of Shares | |
| Class A common stock par value $.01 per share |
135,874,191 | |
| Class B common stock par value $.01 per share |
1,000,000 |
INTERSIL CORPORATION
| PART I. FINANCIAL INFORMATION |
Page | |||
| Item 1. |
Financial Statements |
|||
| 1 | ||||
| 2 | ||||
| Condensed Consolidated Balance Sheets as of April 4, 2003 and January 3, 2003 |
3 | |||
| 4 | ||||
| 5 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | ||
| Item 3. |
17 | |||
| Item 4. |
17 | |||
| PART II. OTHER INFORMATION |
||||
| Item 1. |
18 | |||
| Item 6. |
20 | |||
| 21 | ||||
| 21 | ||||
| 22 | ||||
| 22 | ||||
| 23 | ||||
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INTERSIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
| Three Months Ended | ||||||
| April 4, 2003 |
March 29, 2002 | |||||
| (Unaudited) | ||||||
| (in thousands, except per share amounts) | ||||||
| Revenue |
||||||
| Product sales |
$ |
164,363 |
$ |
134,125 | ||
| Costs and expenses |
||||||
| Cost of product sales |
|
77,315 |
|
63,027 | ||
| Research and development |
|
35,910 |
|
27,826 | ||
| Selling, general and administrative |
|
28,187 |
|
23,760 | ||
| Amortization of purchased intangibles and unearned stock based compensation |
|
6,385 |
|
2,281 | ||
| Severance related expenses |
|
1,628 |
|
— | ||
| Operating income |
|
14,938 |
|
17,231 | ||
| Interest expense |
|
125 |
|
328 | ||
| Interest income |
|
2,294 |
|
2,954 | ||
| Income before sale of certain assets and income taxes |
|
17,107 |
|
19,857 | ||
| Gain on sale of certain operations disposed of during 2001 |
|
1,428 |
|
— | ||
| Income before income taxes |
|
18,535 |
|
19,857 | ||
| Income taxes |
|
4,819 |
|
6,031 | ||
| Net income to common shareholders |
$ |
13,716 |
$ |
13,826 | ||
| Basic income per share |
$ |
0.10 |
$ |
0.13 | ||
| Diluted income per share |
$ |
0.10 |
$ |
0.13 | ||
| Weighted average common shares outstanding (in millions): |
||||||
| Basic |
|
136.6 |
|
106.9 | ||
| Diluted |
|
140.2 |
|
109.1 | ||
See notes to condensed consolidated financial statements.
1
INTERSIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Three Months Ended |
|||||||
| April 4, 2003 |
March 29, 2002 |
||||||
| (Unaudited) |
|||||||
| (in thousands) |
|||||||
| Net income |
$ |
13,716 |
$ |
13,826 |
| ||
| Other comprehensive income (loss): |
|||||||
| Currency translation adjustments |
|
45 |
|
(239 |
) | ||
| Unrealized gain on available-for-sale securities |
|
705 |
|
3,680 |
| ||
| Comprehensive income |
$ |
14,466 |
|
17,267 |
| ||
See notes to condensed consolidated financial statements.
2
INTERSIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
| April 4, 2003 |
January 3, 2003 |
|||||||
| (Unaudited) |
||||||||
| (in thousands) |
||||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ |
481,843 |
|
$ |
542,766 |
| ||
| Short-term investments |
|
51,207 |
|
|
80,836 |
| ||
| Trade receivables, less allowances for collection loss ($1,493 as of April 4, 2003 and $1,107 as of January 3, 2003) |
|
90,343 |
|
|
93,894 |
| ||
| Inventories |
|
99,136 |
|
|
85,967 |
| ||
| Prepaid expenses and other current assets |
|
12,804 |
|
|
9,448 |
| ||
| Deferred income taxes |
|
30,800 |
|
|
34,267 |
| ||
| Total Current Assets |
|
766,133 |
|
|
847,178 |
| ||
| Other Assets |
||||||||
| Property, plant & equipment, less allowances for depreciation |
|
171,115 |
|
|
161,375 |
| ||
| Goodwill, less accumulated amortization |
|
1,233,209 |
|
|
1,232,723 |
| ||
| Intangibles, less accumulated amortization |
|
69,275 |
|
|
71,685 |
| ||
| Investments |
|
133,366 |
|
|
32,464 |
| ||
| Deferred income taxes |
|
13,437 |
|
|
15,647 |
| ||
| Related party notes |
|
1,000 |
|
|
1,000 |
| ||
| Other |
|
8,653 |
|
|
6,382 |
| ||
| Total Other Assets |
|
1,630,055 |
|
|
1,521,276 |
| ||
| Total Assets |
$ |
2,396,188 |
|
$ |
2,368,454 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current Liabilities |
||||||||
| Trade payables |
$ |
51,779 |
|
$ |
37,539 |
| ||
| Retirement plan accruals |
|
6,192 |
|
|
10,261 |
| ||
| Accrued compensation |
|
21,301 |
|
|
21,383 |
| ||
| Accrued interest and sundry taxes |
|
1,758 |
|
|
2,336 |
| ||
| Deferred revenue |
|
12,169 |
|
|
12,407 |
| ||
| Exit costs |
|
1,430 |
|
|
3,029 |
| ||
| Restructuring costs |
|
7,931 |
|
|
12,577 |
| ||
| Other accrued items |
|
33,640 |
|
|
35,780 |
| ||
| Distributor reserves |
|
4,845 |
|
|
6,103 |
| ||
| Income taxes payable |
|
39,484 |
|
|
24,368 |
| ||
| Total Current Liabilities |
|
180,529 |
|
|
165,783 |
| ||
| Shareholders’ Equity |
||||||||
| Preferred Stock, $.01 par value, 100,000 shares authorized, no shares issued or outstanding |
|
— |
|
|
— |
| ||
| Class A common stock, $.01 par value, voting; 300,000,000 shares authorized, 131,421,800 shares outstanding at April 4, 2003 and 129,140,657 shares outstanding at January 3, 2003 |
|
1,313 |
|
|
1,290 |
| ||
| Class B common stock, $.01 par value, non-voting; 300,000,000 shares authorized, 5,286,719 shares outstanding at April 4, 2003 and 7,786,719 shares outstanding at January 3, 2003 |
|
53 |
|
|
78 |
| ||
| Additional paid-in capital |
|
2,221,450 |
|
|
2,228,925 |
| ||
| Retained earnings |
|
12,936 |
|
|
(780 |
) | ||
| Unearned compensation |
|
(17,727 |
) |
|
(20,104 |
) | ||
| Accumulated other comprehensive loss |
|
(2,366 |
) |
|
(3,116 |
) | ||
| Treasury shares, at cost |
|
— |
|
|
(3,622 |
) | ||
| Total Shareholders’ Equity |
|
2,215,659 |
|
|
2,202,671 |
| ||
| Total Liabilities and Shareholders’ Equity |
$ |
2,396,188 |
|
$ |
2,368,454 |
| ||
See notes to condensed consolidated financial statements.
3
INTERSIL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended |
||||||||
| April 4, 2003 |
March 29, 2002 |
|||||||
| (Unaudited) |
||||||||
| (in thousands) |
||||||||
| Operating Activities: |
||||||||
| Net income |
$ |
13,716 |
|
$ |
13,826 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities |
||||||||
| Depreciation and amortization |
|
14,345 |
|
|
8,922 |
| ||
| Provisions for inventory obsolescence |
|
|||||||