Intersil Corporation

Condensed Consolidated Balance Sheets

Unaudited

(in thousands)

Jan. 1,

Oct. 2,

Jan. 2,

2016

2015

2015

Assets

Current assets:

  Cash and cash equivalents 

$    247,403

$   228,898

$      211,216

  Trade receivables, net

42,684

51,158

55,585

  Inventories

65,334

68,967

73,770

  Prepaid expenses and other current assets

7,176

7,647

9,779

  Income taxes receivable

7,584

1,030

1,162

  Deferred income tax assets

-

20,977

20,433

     Total current assets

370,181

378,677

371,945

Non-current assets:

  Property, plant and equipment, net

71,044

72,227

72,272

  Purchased intangibles, net

32,507

36,768

34,400

  Goodwill

571,770

571,770

565,424

  Deferred income tax assets

63,139

39,916

39,334

  Other non-current assets

29,977

32,289

70,885

     Total non-current assets

768,437

752,970

782,315

Total assets

$ 1,138,618

$1,131,647

$   1,154,260

Liabilities and shareholders' equity

Current liabilities:

  Trade payables

23,382

24,011

26,246

  Deferred income

14,482

14,632

11,631

  Income taxes payable

3,270

1,689

2,790

  Provision for TAOS litigation

77,988

78,014

-

  Other accrued expenses

48,913

52,844

64,847

    Total current liabilities

168,035

171,190

105,514

Non-current liabilities:

  Income taxes payable

1,609

3,199

59,745

  Other non-current liabilities

14,224

13,947

7,453

    Total non-current liabilities

15,833

17,146

67,198

Total shareholders' equity

954,750

943,311

981,548

Total liabilities and shareholders' equity

$ 1,138,618

$1,131,647

$   1,154,260

Intersil Corporation

Condensed Consolidated Statements of Cash Flows

Unaudited

(In thousands)

Quarter Ended

Year Ended

Jan. 1,

Oct. 2,

Jan. 2,

Jan. 1,

Jan. 2,

2016

2015

2015

2016

2015

Q4 2015

Q3 2015

Q4 2014

Operating activities:

Net income

$           21,302

$      16,984

$      17,274

$             7,186

$      54,812

   Depreciation

3,557

3,635

4,930

15,285

19,423

   Amortization of purchased intangibles

4,261

3,777

5,559

17,625

22,241

   Equity-based compensation

5,148

5,565

5,009

23,158

18,688

   Deferred income taxes

(2,247)

1,412

(1,327)

(6,285)

35,569

   Other

(2,300)

(771)

8,024

(4,194)

(2,162)

   Net changes in operating assets and liabilities

1,467

4,193

(21,158)

64,229

(75,182)

    Net cash flows provided by operating activities

31,188

34,795

18,311

117,004

73,389

Investing activities:

   Cash paid for acquisition, net of cash acquired

-

(15,948)

-

(15,948)

-

   Proceeds from investments

150

460

615

1,198

1,075

   Net capital expenditures

(1,214)

(1,764)

(3,857)

(12,965)

(9,857)

    Net cash flows used in investing activities

(1,064)

(17,252)

(3,242)

(27,715)

(8,782)

Financing activities:

   Proceeds from equity-based awards, net

4,610

2,587

1,794

13,403

16,939

   Dividends paid

(16,008)

(15,959)

(15,685)

(64,860)

(62,910)

     Net cash flows used in financing activities

(11,398)

(13,372)

(13,891)

(51,457)

(45,971)

Effect of exchange rates on cash and cash equivalents

(221)

(235)

(544)

(1,645)

(2,207)

     Net change in cash and cash equivalents

18,505

3,936

634

36,187

16,429

Cash and cash equivalents as of the beginning of the period

228,898

224,962

210,582

211,216

194,787

    Cash and cash equivalents as of the end of the period

$         247,403

$    228,898

$    211,216

$         247,403

$    211,216

Intersil Corporation

Non-GAAP Results

Unaudited

(In thousands, except percentages)

Quarter Ended

Year Ended

Jan. 1,

Oct. 2,

Jan. 2,

Jan. 1,

Jan. 2,

2016

2015

2015

2016

2015

Q4 2015

Q3 2015

Q4 2014

Non-GAAP gross profit:

  GAAP gross profit

$  72,919

$ 76,058

$ 78,193

$  307,796

$  326,755

  Equity-based compensation COS

268

304

319

1,400

1,326

Non-GAAP gross profit

$  73,187

$ 76,362

$ 78,512

$  309,196

$  328,081

Non-GAAP gross margin:

GAAP gross margin

57.6%

59.2%

59.6%

59.0%

58.1%

  Equity-based compensation COS

0.2%

0.3%

0.2%

0.3%

0.2%

Non-GAAP gross margin

57.8%

59.5%

59.8%

59.3%

58.3%

Non-GAAP R&D expenses:

  GAAP R&D expenses

$  29,983

$ 31,252

$ 30,367

$  126,350

$  125,851

Equity-based compensation

(2,368)

(2,390)

(2,500)

(10,167)

(8,468)

Non-GAAP R&D expenses:

$  27,615

$ 28,862

$ 27,867

$  116,183

$  117,383

Non-GAAP SG&A expenses:

GAAP SG&A expenses

$  22,784

$ 23,532

$ 24,840

$    96,963

$    99,926

Equity-based compensation

(2,512)

(2,871)

(2,190)

(11,591)

(8,894)

Non-GAAP SG&A expenses:

$  20,272

$ 20,661

$ 22,650

$    85,372

$    91,032

Non-GAAP operating expenses:

GAAP operating expenses

$  57,028

$ 58,561

$ 60,766

$  322,038

$  252,018

  Provision for export compliance settlement

-

-

-

-

(4,000)

  Provision for TAOS litigation

-

-

-

(81,100)

-

  Equity-based compensation (excl. COS)

(4,880)

(5,261)

(4,690)

(21,758)

(17,362)

  Amortization of purchased intangibles

(4,261)

(3,777)

(5,559)

(17,625)

(22,241)

Non-GAAP operating expenses

$  47,887

$ 49,523

$ 50,517

$  201,555

$  208,415

Non-GAAP operating income:

GAAP operating income (loss)

$  15,891

$ 17,497

$ 17,427

$  (14,242)

$    74,737

  Provision for export compliance settlement

-

-

-

-

4,000

  Provision for TAOS litigation

-

-

-

81,100

-

  Equity-based compensation

5,148

5,565

5,009

23,158

18,688

  Amortization of purchased intangibles

4,261

3,777

5,559

17,625

22,241

Non-GAAP operating income

$  25,300

$ 26,839

$ 27,995

$  107,641

$  119,666

Non-GAAP operating margin:

GAAP operating margin

12.5%

13.6%

13.3%

13.3%

  Excluded items as a percent of revenue

7.5%

7.3%

8.0%

23.3%

8.0%

Non-GAAP operating margin 

20.0%

20.9%

21.3%

20.6%

21.3%

Intersil Corporation

Non-GAAP Results

Unaudited

(In thousands, except per share amounts)

Quarter Ended

Year Ended

Jan. 1,

Oct. 2,

Jan. 2,

Jan. 1,

Jan. 2,

2016

2015

2015

2016

2015

Q4 2015

Q3 2015

Q4 2014

Non-GAAP net income:

GAAP net income

$      21,302

$      16,984

$      17,274

$        7,186

$      54,812

  Tax impact of Non-GAAP adjustments

(2,668)

(5,049)

(2,025)

(34,140)

173

  Provision for export compliance settlement

-

-

-

-

4,000

  Gain on recovery from auction rate securities

(150)

(460)

(615)

(1,198)

(1,075)

  Equity-based compensation

5,148

5,565

5,009

23,158

18,688

  Amortization of purchased intangibles

4,261

3,777

5,559

17,625

22,241

  Provision for TAOS litigation

-

-

-

81,100

-

Non-GAAP net income

$      27,893

$      20,817

$      25,202

$      93,731

$      98,839

GAAP weighted average shares - diluted

134,288

132,445

132,276

133,273

132,657

  Non-GAAP adjustment

4,314

5,273

4,099

3,795

2,117

Non-GAAP weighted average shares - diluted

138,602

137,718

136,375

137,068

134,774

Non-GAAP earnings per diluted share:

GAAP earnings per diluted share

$          0.16

$          0.13

$          0.13

$          0.05

$          0.41

  Excluded items per share impact

0.04

0.02

0.05

0.63

0.32

Non-GAAP earnings per diluted share

$          0.20

$          0.15

$          0.18

$          0.68

$          0.73

Equity-based compensation expense by classification:

Cost of revenue ("COS")

$           268

$           304

$           319

$        1,400

$        1,326

Research and development 

$        2,368

$        2,390

$        2,500

$      10,167

$        8,468

Selling, general and administrative 

$        2,512

$        2,871

$        2,190

$      11,591

$        8,894