Intersil Corporation announced strong financial results for the second quarter ended July 4, 2014. Continued demand for industrial and infrastructure products and improving gross and operating margins resulted in top and bottom line growth. Highlights include: Revenue of $147.8 million was up 5.5% sequentially; Both GAAP and non-GAAP gross margin improved by more than 150 basis points sequentially; Operating margin increased to 14.0% on a GAAP basis and 21.5% on a non-GAAP basis; Earnings per diluted share also increased sequentially to $0.10 on a GAAP basis and $0.19 on a non-GAAP basis; and Cash and investment balances increased to $201 million.
Revenue for the second quarter of $147.8 million increased 5.5% sequentially and 2.1% compared to the same period last year. Intersil’s industrial and infrastructure revenue increased by more than 8 percent sequentially due to growth across every major product category. Computing and consumer revenue remained flat sequentially during the quarter.
The company continued to demonstrate strong financial results and improving profitability compared to the prior year. For the second quarter, GAAP operating expenses increased to $65.1 million, but declined 10% compared to the same period in 2013. Second quarter R&D expense was $32.5 million dollars, and SG&A expense was $27.1 million dollars. GAAP gross margin increased meaningfully to 58.1% compared to 55.2% in Q2 2013. Operating income improved again to $20.7 million, or 14% of revenue compared to 5% in Q2 2013.
The non-GAAP results also showed meaningful improvement over prior periods. Non-GAAP gross margin improved to 58.3% in the second quarter, a 170 basis point sequential improvement. Second quarter non-GAAP operating expenses of $54.4 million increased sequentially as expected, but were 6.5% lower than the same period last year.
Second quarter non-GAAP operating income increased sequentially to $31.8 million, resulting in a 150 basis point sequential improvement in non-GAAP operating margin to 21.5%. Second quarter non-GAAP net income of $26.0 million resulted in $0.19 in earnings per diluted share, a 36% increase compared to the same period last year. For a complete reconciliation of GAAP and non-GAAP results, please see the “Non-GAAP Results†table included at the end of this release.
Cash flow from operating activities was $13.2 million, contributing to a sequential increase in cash and short-term investments to $201 million. 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 August 29, 2014, to shareholders of record as of the close of business on August 19, 2014.
“Only one year into the strategic changes we began last July, Intersil is well on its way to delivering margins in line with its premium peers, which we view as a key indicator of our competitiveness in the market place,†said Necip Sayiner, president and CEO of Intersil. “We are seeing sustained growth in our investment areas and are at the early stages of benefiting from the re-focusing of our R&D investments last year.â€
