MILPITAS, Calif., Oct. 24, 2016 /PRNewswire/ -- Intersil Corporation (NASDAQ:ISIL), a leading provider of innovative power management and precision analog solutions, today announced financial results for the third quarter ended September 30, 2016. Third quarter revenue was up 4% sequentially and 8% year-over-year to $139.0 million.

Company Highlights


    --  Consumer and Computing (C&C) revenue increased 6% sequentially and 9%
        year-over-year, the fourth consecutive quarter of year-over-year growth.
    --  Industrial and Infrastructure (I&I) revenue was up 2% sequentially and
        8% year-over-year.
    --  Computing and automotive end markets were key growth areas, with revenue
        in automotive increasing by 16% year-over-year.
    --  Gross margin increased sequentially to 60.6% on a GAAP basis and 60.7%
        on a non-GAAP basis, achieving the company's non-GAAP target model of
        60%.
    --  GAAP operating margin increased sequentially and year-over-year to
        16.4%. Non-GAAP operating margin increased by over 450 basis points to
        25.7%, achieving the company's non-GAAP target model of 25%.
    --  GAAP earnings per share increased sequentially to $0.11. Non-GAAP
        earnings per share increased by 29% sequentially and 46% year-over-year
        to $0.22.
    --  Cash and cash equivalents increased by $27 million to $284 million, the
        14th consecutive quarter of sequential growth.

Business Review
Revenue for the third quarter improved sequentially due to strength in both the C&C and I&I businesses. Seasonal growth in C&C, particularly in computing, increased C&C revenue to its highest point since 2014. The ramp of next generation PC processors continued to drive demand for the company's computing power products, and design win traction in mobile platforms remained strong.

Strength across a number of product areas contributed broadly to the I&I sequential revenue improvement and year-over-year growth. I&I power revenue reached its highest level in six quarters, with power modules achieving record revenue in the quarter.

Intersil's automotive revenue reached record levels as well. The company also introduced new products in Q3 that address the major trends in advanced driver assistance systems (ADAS) and around view displays.

The revenue breakdown by end market follows:


                    Q3 2016        Q2 2016     Q3 2015
                    -------        -------     -------

    End Market
     Revenue                    $M    %                   $M   %        $M    %
                               ---   ---                 ---  ---      ---   ---

    Industrial
     &
     Infrastructure           90.8         65%           88.6     66%   84.2     66%

    Consumer &
     Computing                48.2         35%           45.4     34%   44.2     34%

    Total
     Revenue                $139.0                     $134.0         $128.4
                            ======                     ======         ======

Table 1. Intersil End Market Mix

"The third quarter marked a significant milestone for us as we achieved the gross and operating margin goals we set for the business. The top line has continued to show progress towards our goal as well, as new product investments translated into solid year-over-year revenue growth. This reflects the high quality foundation of the business we've built over the last three years," said Necip Sayiner, president and CEO of Intersil. "Strong execution has been an important aspect of our turnaround efforts and we have been able to successfully intersect a number of key trends with our power management and precision analog solutions in every one of our target end markets. With power efficiency becoming a consistent thread through virtually every application, we believe Intersil solutions can be central to the evolution of next-generation electronics."

Financial Highlights
Third quarter GAAP gross margin was up to 60.6%, a 120 basis point sequential increase and a 140 basis point year-over-year increase. Total third quarter GAAP operating expenses decreased to $61.4 million and included R&D expense of $31.3 million and SG&A expense of $22.8 million. Third quarter GAAP operating income increased sequentially and year-over-year to $22.8 million, or 16.4% of revenue. GAAP net income for the third quarter increased to $15.9 million, resulting in diluted earnings per share of $0.11.

The following non-GAAP results exclude merger-related expenses, restructuring and related costs, amortization of purchased intangibles, equity-based compensation expense, acquisition-related charges, provision for the TAOS litigation, gain on recovery of auction rate securities, and related tax effects.

On a non-GAAP basis, the company reported a further improvement in gross margin, which increased again sequentially by 110 basis points to 60.7% even with an increased mix of C&C revenue. This highlights the improved margins within C&C as new products increase as a proportion of revenue. Non-GAAP operating expenses for the third quarter declined to $48.7 million. Non-GAAP R&D expense was $28.5 million and non-GAAP SG&A expense was $20.2 million. Third quarter non-GAAP operating margin increased to 25.7% as a result of revenue growth, strong gross margin and lower operating expenses. This enabled the company to exceed its non-GAAP operating margin target of 25%. Non-GAAP net income increased to $31.3 million in Q3, which resulted in a sequential increase in non-GAAP earnings per share of 29% to $0.22.

"From the beginning of the Intersil transformation, we have talked about gross margin being a key measure of differentiation. Clearly we have successfully increased the competitiveness of our products given the approximately 500 basis point difference in gross margin we reported compared to the same period in 2013, the first year of the turnaround," said Rick Crowley, senior vice president and chief financial officer for Intersil. "When combined with spending discipline and strong cash generation, the recent results and early achievement of our target operating model are a tangible proof point for the strategy we have patiently pursued."

For a complete reconciliation of GAAP and non-GAAP results, please see the "Non-GAAP Results" tables included at the end of this release.

Cash and cash equivalents increased by $27 million at the end of the third quarter to $284 million, compared to the second quarter of 2016. Inventories declined in absolute dollars and channel inventory remained balanced.

Intersil's board of directors authorized payment of a quarterly dividend of $0.12 per share of common stock. The payment of this dividend will be made on or about November 28, 2016 to stockholders of record as of the close of business on November 15, 2016.

On September 12, 2016 Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, and Intersil Corporation announced they had signed a definitive agreement for Renesas to acquire Intersil for US$22.50 per share in cash, representing an aggregate equity value of approximately US$3.2 billion. Closing of the transaction is expected in the first half of 2017, conditioned on approval by Intersil stockholders and the relevant governmental authorities.

Outlook and Third Quarter Earnings Call
Given the pending acquisition by Renesas, Intersil will not be providing guidance for the fourth quarter and will not be holding a third quarter results conference call.

About Intersil
Intersil Corporation is a leading provider of innovative power management and precision analog solutions. The company's products form the building blocks of increasingly intelligent, mobile and power hungry electronics, enabling advances in power management to improve efficiency and extend battery life. With a deep portfolio of intellectual property and a rich history of design and process innovation, Intersil is the trusted partner to leading companies in some of the world's largest markets, including industrial and infrastructure, mobile computing, automotive and aerospace. For more information about Intersil, visit our website at www.intersil.com.

FORWARD-LOOKING STATEMENTS
Some of the statements included in this press release constitute forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current expectations, estimates, beliefs, assumptions, and projections of our senior management about future events with respect to our business and our industry in general. Statements that include words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "potential," "continue," "goals," "targets," and variations of these words (or negatives of these words) or similar expressions of a future or forward-looking nature identify forward-looking statements. In addition, any statements that refer to projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

Forward-looking statements include, but are not limited to, statements in the quote from our CEO, including the statement regarding the expected centrality of Intersil products to the evolution of next-generation electronics, references to the anticipated benefits of the proposed acquisition by Renesas and the expected date of closing of the acquisition, as well as our industry in general. These forward-looking statements are not guarantees of future performance and are subject to many risks, uncertainties, and assumptions that are difficult to predict. Therefore, there are or will be important factors that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. We believe that the factors that may affect our business, future operating results, and financial condition include, but are not limited to, the following: the inability to complete the merger due to the failure to obtain stockholder approval for the merger or the failure to satisfy other conditions to completion of the merger, including the receipt of all regulatory approvals related to the merger; uncertainties as to the timing of the consummation of the merger and the ability of each party to consummate the merger; risks that the proposed merger disrupts our current plans and operations, including our ability to retain and hire key personnel; competitive responses to the proposed merger; unexpected costs, charges, or expenses resulting from the merger; the outcome of any legal proceedings that could be instituted against us or our directors related to the merger agreement; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; and legislative, regulatory and economic developments; any faltering or uncertainty in global economic conditions; the highly cyclical nature of the semiconductor industry; intense competition in the semiconductor industry; unsuccessful product development or failure to obtain market acceptance of our products; downturns in the end markets we serve; failure to make or deliver products in a timely manner; unavailability of raw materials, services, supplies, or manufacturing capacity; delays in production or in implementing new production techniques, product defects, or unreliability of products; and adverse results in litigation matters. These risks, as well as other risks associated with the proposed merger, are more fully discussed in the preliminary proxy statement that is included in the Schedule 14A filed with the Securities and Exchange Commission ("SEC") in connection with the proposed merger on October 12, 2016 and the other documents that we have filed or may filed from time-to-time with the SEC. These forward-looking statements are made only as of the date of this communication and Intersil undertakes no obligation to update or revise these forward-looking statements.

ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication may be deemed to be soliciting material in respect of the proposed transaction involving Intersil and Renesas. Intersil has filed with the SEC a preliminary proxy statement in connection with the proposed transaction with Renesas as well as other documents regarding the proposed transaction. The definitive proxy statement will be sent or given to the stockholders of Intersil and will contain important information about the proposed transaction and related matters. INTERSIL'S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement and other relevant materials (when they become available), and any other documents filed by Intersil with the SEC, may be obtained free of charge at the SEC's website, at www.sec.gov. In addition, security holders of Intersil will be able to obtain free copies of the proxy statement through Intersil's website, www.intersil.com, or by contacting Intersil by mail at Attn: Corporate Secretary, 1001 Murphy Ranch Road, Milpitas, California 95035.

PARTICIPANTS IN THE SOLICITATION
Intersil, Renesas and their respective directors, executive officers, and other members of management, and certain of their respective employees, may be deemed to be participants in the solicitation of proxies in connection with the proposed merger. Information about Intersil's directors and executive officers is included in Intersil's Annual Report on Form 10-K for the fiscal year ended January 1, 2016 filed with the SEC on February 12, 2016, and the proxy statement filed with the SEC on March 4, 2016 for Intersil's annual meeting of stockholders held on April 21, 2016. Additional information regarding these persons and their interests in the merger has been included in Intersil's preliminary proxy statement filed with the SEC on October 12, 2016 and will be included in the definitive proxy statement relating to the proposed merger when it is filed with the SEC. These documents, when available, can be obtained free of charge from the sources indicated above.

Non-GAAP Reporting
To supplement its consolidated financial results presented in accordance with GAAP, Intersil uses non-GAAP financial measures, which are adjusted from the most directly comparable GAAP financial measures to exclude certain items, as described in detail below. Management believes that these non-GAAP financial measures reflect an additional and useful way of viewing aspects of the company's operations that, when viewed in conjunction with Intersil's GAAP results, provide a more comprehensive understanding of the various factors and trends affecting the company's business and operations. It should also be noted that Intersil's non-GAAP information may be different from the non-GAAP information provided by other companies. Non-GAAP financial measures used by Intersil include:


    --  Gross profit;
    --  Operating expenses;
    --  Provision (benefit) for income taxes;
    --  Operating income (loss);
    --  Net income (loss);
    --  Diluted earnings (loss) per share; and
    --  Weighted average shares outstanding - diluted.

The company presents non-GAAP financial measures because the investor community uses non-GAAP results in its analysis and comparison of historical results and projections of the company's future operating results. These non-GAAP results exclude acquisition-related charges, restructuring and related costs, equity-based compensation expense, and certain other expenses and benefits. Management uses these non-GAAP measures to manage and assess the profitability of the business. These non-GAAP results are also consistent with the way management internally analyzes Intersil's financial results.

There are limitations in using non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP financial measures. The non-GAAP financial measures supplement, and should be viewed in conjunction with, GAAP financial measures. Investors should review the reconciliations of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in this press release.

As presented in the "Non-GAAP Results" tables in this press release, each of the non-GAAP financial measures excludes one or more of the following items:

Acquisition-related charges. Acquisition-related charges are not factored into management's evaluation of potential acquisitions or Intersil's performance after completion of acquisitions, because they are not related to the company's core operating performance. Adjustments of these items provide investors with a basis to compare Intersil's performance to other companies without the variability caused by purchase accounting. Acquisition-related charges primarily include:


    --  Amortization of purchased intangibles, which include purchased
        intangibles such as purchased technology, patents, customer
        relationships, trademarks, backlog and non-compete agreements.
    --  One-time charges associated with completing an acquisition including
        contract termination costs.

Other adjustments. These items are excluded from non-GAAP financial measures because they are not related to the core operating activities and on-going future operating performance of Intersil. Excluding these items allows investors to better compare Intersil's period-over-period performance without such expense, which Intersil believes may be useful to the investor community. Other adjustments primarily include:


    --  Equity-based compensation expense.
    --  Legal judgments, awards, or governmental fines or penalties.
    --  Income from IP agreements.
    --  Restructuring and related costs, including asset impairment charges.
    --  Write-offs (recoveries) related to Auction Rate Securities.
    --  Merger-related expenses
    --  Tax effects of non-GAAP adjustments.
    --  Diluted weighted average shares non-GAAP adjustment - for purposes of
        calculating non-GAAP diluted earnings per share, the GAAP diluted
        weighted average shares outstanding is adjusted to exclude the benefits
        of equity-based compensation expense attributable to future services not
        yet recognized in the financial statements that are treated as proceeds
        assumed to be used to repurchase shares under the GAAP treasury stock
        method.

Comparability. The above criteria has been consistently applied when calculating the non-GAAP financial measures for all periods presented in this press release and accompanying tables.


                                                               Intersil Corporation

                                                    Condensed Consolidated Statements of Income

                                                                     Unaudited

                                             (In thousands, except percentages and per share amounts)


                                             Quarter Ended
                                           -------------

                                         Sep. 30                                     Jul. 1             Oct. 2

                                                     2016                                         2016              2015
                                                     ----                                         ----              ----

                                         Q3 2016                                    Q2 2016            Q3 2015


    Revenue                                      $139,045                                     $134,009          $128,396

    Cost of revenue                                54,825                                       54,421            52,338
                                                   ------                                       ------            ------

    Gross profit                                   84,220                                       79,588            76,058

    Gross margin %                                60.6%                                       59.4%            59.2%

    Expenses:

    Research and
     development                                   31,315                                       34,211            31,252

    Selling, general and
     administrative                                22,782                                       25,248            23,532

    Amortization of
     purchased
     intangibles                                    2,669                                        2,867             3,777

    Restructuring and
     related costs                                     14                                       13,508                 -

    Provision for the
     TAOS litigation                                    -                                       1,255                 -

    Merger-related
     expenses                                       4,639                                            -                -

    Total expenses                                 61,419                                       77,089            58,561
                                                   ------                                       ------            ------

    Operating income                               22,801                                        2,499            17,497

    Other income
     (expense) , net                                  114                                        (326)            (215)
                                                      ---                                         ----              ----

    Income before income
     taxes                                         22,915                                        2,173            17,282

    Income tax expense
     (benefit)                                      7,032                                          784               298

    Net income                                    $15,883                                       $1,389           $16,984
                                                  =======                                       ======           =======


    Earnings per share:

    Basic                                           $0.12                                        $0.01             $0.13
                                                    =====                                        =====             =====

    Diluted                                         $0.11                                        $0.01             $0.13
                                                    =====                                        =====             =====


    Weighted average shares outstanding:

    Basic                                         135,908                                      135,086           132,133
                                                  =======                                      =======           =======

    Diluted                                       138,760                                      137,332           132,445
                                                  =======                                      =======           =======



                                                  Intersil Corporation

                                          Condensed Consolidated Balance Sheets

                                                        Unaudited

                                                     (in thousands)


                                         Sep. 30                                Jul. 1            Oct. 2

                                                     2016                                    2016              2015
                                                     ----                                    ----              ----

    Assets

    Current assets:

      Cash and cash
       equivalents                               $284,047                                $256,864          $228,898

      Trade receivables, net                       61,628                                  53,578            51,158

      Inventories                                  68,277                                  69,477            68,967

      Prepaid expenses and
       other current assets                         9,332                                   6,162             7,647

      Income taxes receivable                       4,529                                   7,573             1,030

      Deferred income tax
       assets                                           -                                      -           20,977

      Assets held for sale                          4,901                                       -                -

         Total current assets                     432,714                                 393,654           378,677
                                                  -------                                 -------           -------

    Non-current assets:

      Property, plant and
       equipment, net                              51,572                                  57,520            72,227

      Purchased intangibles,
       net                                         23,443                                  26,112            36,768

      Goodwill                                    571,770                                 571,770           571,770

      Deferred income tax
       assets                                      59,385                                  63,484            39,916

      Other non-current
       assets                                      31,255                                  32,053            32,289

         Total non-current
          assets                                  737,425                                 750,939           752,970
                                                  -------                                 -------           -------

    Total assets                               $1,170,139                              $1,144,593        $1,131,647
                                               ==========                              ==========        ==========


    Liabilities and stockholders' equity

    Current liabilities:

      Trade payables                               21,912                                  24,245            24,011

      Deferred income                              18,077                                  15,881            14,632

      Income taxes payable                          3,301                                   5,587             1,689

      Provision for the TAOS
       litigation                                  78,317                                  78,557            78,014

      Other accrued expenses
       and liabilities                             61,362                                  54,393            52,844

        Total current
         liabilities                              182,969                                 178,663           171,190
                                                  -------                                 -------           -------

    Non-current liabilities:

      Income taxes payable                          1,653                                   1,643             3,199

      Other non-current
       liabilities                                 10,792                                  13,316            13,947

        Total non-current
         liabilities                               12,445                                  14,959            17,146
                                                   ------                                  ------            ------

    Total stockholders'
     equity                                       974,725                                 950,971           943,311

    Total liabilities and
     stockholders' equity                      $1,170,139                              $1,144,593        $1,131,647
                                               ==========                              ==========        ==========



                                                       Intersil Corporation

                                         Condensed Consolidated Statements of Cash Flows

                                                            Unaudited

                                                          (In thousands)


                            Quarter Ended
                            -------------

                               Sep. 30                                              Jul. 1            Oct. 2

                                                    2016                                        2016               2015
                                                    ----                                        ----               ----

                               Q3 2016                                             Q2 2016           Q3 2015

    Operating activities:

    Net income                                   $15,883                                      $1,389            $16,984

       Depreciation                                2,903                                       3,467              3,635

       Amortization of
        purchased
        intangibles                                2,669                                       2,867              3,777

       Equity-based
        compensation                               5,563                                       8,122              5,565

       Asset impairment
        charges                                        -                                      9,998                  -

       Deferred income
        taxes                                      4,099                                     (1,635)             1,412

       Other                                     (1,071)                                      (847)             (771)

       Net changes in
        operating assets
        and liabilities                          (6,777)                                      3,835              4,193

        Net cash flows
         provided by
         operating
         activities                               23,269                                      27,196             34,795
                                                  ------                                      ------             ------


    Investing activities:

       Cash paid for
        acquisition, net
        of cash acquired                               -                                          -          (15,948)

       Proceeds from
        investments                                  865                                          42                460

       Net capital
        expenditures                             (1,784)                                    (2,004)           (1,764)

       Advance received
        for planned
        disposition of
        200mm line                                 2,422                                           -                 -

         Net cash flows
          provided by/
          (used in)
          investing
          activities                               1,503                                     (1,962)          (17,252)
                                                   -----                                      ------            -------


    Financing activities:

       Proceeds from (tax
        payments for)
        equity-based
        awards, net                               18,446                                     (3,168)             2,587

       Dividends paid                           (16,338)                                   (18,878)          (15,959)

         Net cash flows
          provided by/
          (used in)
          financing
          activities                               2,108                                    (22,046)          (13,372)
                                                   -----                                     -------            -------


    Effect of exchange
     rates on cash and
     cash equivalents                                303                                          70              (235)
                                                     ---                                         ---               ----


         Net change in cash
          and cash
          equivalents                             27,183                                       3,258              3,936
                                                  ------                                       -----              -----


    Cash and cash
     equivalents as of
     the beginning of
     the period                                  256,864                                     253,606            224,962
                                                 -------                                     -------            -------


        Cash and cash
         equivalents as of
         the end of the
         period                                 $284,047                                    $256,864           $228,898
                                                ========                                    ========           ========



                                                      Intersil Corporation

                                                        Non-GAAP Results

                                                            Unaudited

                                               (In thousands, except percentages)


                                      Quarter Ended
                                    -------------

                                 Sep. 30                                   Jul. 1            Oct. 2

                                            2016                                       2016              2015
                                            ----                                       ----              ----

                                 Q3 2016                                  Q2 2016           Q3 2015

    Non-GAAP gross profit:

      GAAP gross profit                  $84,220                                    $79,588           $76,058

      Equity-based
       compensation COS                      207                                        284               304
                                             ---                                        ---               ---

    Non-GAAP gross
     profit                              $84,427                                    $79,872           $76,362
                                         =======                                    =======           =======


    Non-GAAP gross margin:

    GAAP gross margin                      60.6%                                     59.4%            59.2%

      Excluded items as a
       percent of revenue                   0.1%                                      0.2%             0.3%

    Non-GAAP gross
     margin                                60.7%                                     59.6%            59.5%
                                            ====                                       ====              ====


    Non-GAAP R&D expenses:

      GAAP R&D expenses                  $31,315                                    $34,211           $31,252

      Equity-based
       compensation                      (2,779)                                   (3,834)          (2,390)
                                          ------                                     ------            ------

    Non-GAAP R&D
     expenses:                           $28,536                                    $30,377           $28,862
                                         =======                                    =======           =======


    Non-GAAP SG&A expenses:

    GAAP SG&A expenses                   $22,782                                    $25,248           $23,532

      Equity-based
       compensation                      (2,577)                                   (4,004)          (2,871)

    Non-GAAP SG&A
     expenses:                           $20,205                                    $21,244           $20,661
                                         =======                                    =======           =======


    Non-GAAP operating expenses:

    GAAP operating
     expenses                            $61,419                                    $77,089           $58,561

      Restructuring and
       related costs                        (14)                                  (13,508)                -

      Provision for the
       TAOS litigation                         -                                   (1,255)                -

      Equity-based
       compensation
       (excl. COS)                       (5,356)                                   (7,838)          (5,261)

      Amortization of
       purchased
       intangibles                       (2,669)                                   (2,867)          (3,777)

      Merger related
       expenses                          (4,639)                                         -                -

    Non-GAAP operating
     expenses                            $48,741                                    $51,621           $49,523
                                         =======                                    =======           =======


    Non-GAAP operating income:

    GAAP operating
     income                              $22,801                                     $2,499           $17,497

      Restructuring and
       related costs                          14                                     13,508                 -

      Provision for the
       TAOS litigation                         -                                     1,255                 -

      Equity-based
       compensation                        5,563                                      8,122             5,565

      Amortization of
       purchased
       intangibles                         2,669                                      2,867             3,777

      Merger related
       expenses                            4,639                                          -                -

    Non-GAAP operating
     income                              $35,686                                    $28,251           $26,839
                                         =======                                    =======           =======


    Non-GAAP operating margin:

    GAAP operating
     margin                                16.4%                                      1.9%            13.6%

      Excluded items as a
       percent of revenue                   9.3%                                     19.2%             7.3%

    Non-GAAP operating
     margin                                25.7%                                     21.1%            20.9%
                                            ====                                       ====              ====



                                                                    Intersil Corporation

                                                                      Non-GAAP Results

                                                                          Unaudited

                                                          (In thousands, except per share amounts)


                                                       Quarter Ended
                                                     -------------

                                                    Sep. 30                                Jul. 1          Oct. 2

                                                               2016                                   2016             2015
                                                               ----                                   ----             ----

                                                    Q3 2016                                Q2 2016         Q3 2015


    Non-GAAP net income:

    GAAP net income                                         $15,883                                 $1,389          $16,984

      Restructuring and
       related costs                                             14                                 13,508                -

      Equity-based
       compensation                                           5,563                                  8,122            5,565

      Amortization of
       purchased
       intangibles                                            2,669                                  2,867            3,777

      Provision for the
       TAOS litigation                                            -                                 1,255                -

      Merger related
       expenses                                               4,639                                      -               -

      Gain on recovery
       from auction rate
       securities                                             (135)                                  (70)           (460)

      Tax impact of non-
       cash and discrete
       items                                                  2,683                                (3,469)         (5,049)

    Non-GAAP net income                                     $31,316                                $23,602          $20,817
                                                            =======                                =======          =======


    GAAP weighted
     average shares -
     diluted                                                138,760                                137,332          132,445

      Non-GAAP adjustment                                     2,583                                  3,014            5,273

    Non-GAAP weighted
     average shares -
     diluted                                                141,343                                140,346          137,718
                                                            =======                                =======          =======


    Non-GAAP earnings per diluted share:

    GAAP earnings per
     diluted share                                            $0.11                                  $0.01            $0.13

      Excluded items per
       share impact                                            0.11                                   0.16             0.02

    Non-GAAP earnings
     per diluted share                                        $0.22                                  $0.17            $0.15
                                                              =====                                  =====            =====


    Equity-based compensation expense by classification:

    Cost of revenue
     ("COS")                                                   $207                                   $284             $304

    Research and
     development                                             $2,779                                 $3,834           $2,390

    Selling, general and
     administrative                                          $2,577                                 $4,004           $2,871

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SOURCE Intersil Corporation