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Intersil Corp. Reports Operating Results (10-Q)

August 07, 2009 | About:
10qk

Intersil Corp. (ISIL) filed Quarterly Report for the period ended 2009-07-03.

Intersil Corporation is a leader in the design and manufacture of high-performance analog semiconductors. The Company\'s products address some of the industry\'s fastest growing markets such as flat panel displays cell phones other handheld systems and notebooks. Intersil\'s product families address power management functions and analog signal processing functions. Intersil products include ICs for battery management hot-swap and hot-plug controllers linear regulators power sequencers supervisory ICs bridge drivers PWM controllers switching DC/DC regulators and power MOSFET drivers; optical storage laser diode drivers; DSL line drivers; video and high-performance operational amplifiers; data converters; interface ICs; analog switches and multiplexers; crosspoint switches; voice-over-IP devices; and ICs for military space and radiation-hardened applications. Intersil Corp. has a market cap of $1.71 billion; its shares were traded at around $14 with a P/E ratio of 23.6 and P/S ratio of 2.3. The dividend yield of Intersil Corp. stocks is 3.3%. Intersil Corp. had an annual average earning growth of 15.5% over the past 5 years.

Highlight of Business Operations:

ended July 3, 2009 from $38.6 million during the quarter ended July 4, 2008. R&D expenses decreased $4.0 million or 5.4% to $69.8 million during the two quarters ended July 3, 2009 from $73.8 million during the two quarters ended July 4, 2008. The decreases were primarily due to cost saving initiatives and reduced incentive accruals offset by increased labor costs from acquisitions and strong hiring of new design engineers during 2008. We are committed to our investment in research and development and expect R&D expenditures to remain close to 2008 levels.

SG&A costs include primarily salary and incentive expenses of employees engaged in marketing and selling, as well as salaries and expenses required to perform our human resource, finance, legal and executive functions. SG&A costs decreased by $6.5 million or 17.9% to $29.8 million during the quarter ended July 3, 2009 from $36.3 million during the quarter ended July 4, 2008. SG&A costs decreased by $8.2 million or 12.9% to $55.6 million during the two quarters ended July 3, 2009 from $63.8 million during the two quarters ended July 4, 2008. The decreases for both periods related primarily to cost saving initiatives and reduced incentive accruals.

Amortization of purchased intangible assets increased $0.3 million to $3.4 million in the quarter ended July 3, 2009 from $3.1 million in the quarter ended July 4, 2008. For the two quarters ended July 3, 2009, amortization of purchased intangibles increased $0.9 million to $6.9 million from $6.0 million for the two quarters ended July 4, 2008. The increases for both periods resulted primarily from the three acquisitions in the last two quarters of fiscal 2008. We expect amortization of current definite-lived intangible asset balances to decrease in the third and fourth quarters as certain balances become fully amortized. This decrease will reduce amortization expense by approximately $1.1 million per quarter beginning in the first quarter of 2010.

We recorded charges of $0.4 million in the quarter ended July 3, 2009 compared to $1.2 million in the quarter ended July 4, 2008 for employee severance, facility consolidation and other costs, as a result of these actions. We have recorded charges of $1.9 million for the two quarters ended July 3, 2009 compared to $4.9 million in the two quarters ended July 4, 2008. Other accrued expense on the accompanying consolidated balance sheets includes approximately $0.5 million remaining liability related to the restructurings.

We have a liability for a qualified deferred compensation plan. We maintain a portfolio of approximately $9.9 million of investments under the plan. Changes in the fair value of the asset are recorded as a (loss) gain on investments and changes in the fair value of the liability are recorded as a component of compensation expense. In general, the compensation expense (benefit) is substantially offset by the gains and losses on the investment. During the quarter ended July 3, 2009, we recorded a gain on deferred compensation investments of $1.1 million and an increase in compensation expense of $1.2 million. During the two quarters ended July 3, 2009, we recorded gain on deferred compensation investments of $0.8 million and an increase of compensation expense of $0.8 million.

Net interest income decreased to $1.4 million during the quarter ended July 3, 2009, from $4.1 million during the quarter ended July 4, 2008. Net interest income decreased to $2.8 million during the two quarters ended July 3, 2009, from $8.9 million during the two quarters ended July 4, 2008. The decreases are attributable to a decrease in average cash and investment balances and declining interest rates when compared to the same period last year.

Read the The complete ReportISIL is in the portfolios of PRIMECAP Management.

Rating: 3.3/5 (4 votes)

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