Intersil Corporation Reports Second Quarter 2008 Financial Results

MILPITAS, CA, Jul 23 (MARKET WIRE) --
Intersil Corporation (NASDAQ: ISIL), a world leader in the design and
manufacture of high performance analog semiconductors, today reported
financial results for the quarter ended July 4, 2008. Net revenues for
the second quarter were $216.2 million, a 21% increase from $178.3
million in the second quarter of 2007, and a 6% increase from $203.7
million in the first quarter of 2008.

Generally Accepted Accounting Principles (GAAP) Results

GAAP gross margins were 56.7% for the second quarter of 2008 compared to
57.2% in the same quarter last year, and 53.8% in the first quarter of
2008. Operating margins from continuing operations were 20.1% compared to
18.1% in the same quarter last year, and 19.8% in the first quarter of
2008. Net income from continuing operations was $38.0 million, or $0.30
earnings per diluted share, as compared to net income of $31.2 million, or
$0.23 earnings per diluted share in the same quarter last year. For the
first quarter of 2008, the Company reported net income from continuing
operations of $47.7 million, or $0.38 earnings per diluted share, which
included a significant one time tax benefit.

Non-GAAP Results

Non-GAAP net income increased 17% to $49.7 million and non-GAAP diluted
earnings per share increased 26% to $0.39 compared to the same quarter
last year.

"Intersil had a solid quarter with impressive revenue and earnings growth
year over year," said Dave Bell, Intersil's President and Chief Executive
Officer. "As we enter the second half of 2008, we are well positioned and
expect strong demand across many of our product families."

By end market, Intersil's first quarter revenues were as follows: high-end
consumer (23.9% of revenues), computing (32.8% of revenues), industrial
(21.2% of revenues), and communications (22.1% of revenues). "The global
consumer market was soft in the second quarter, and we saw the impact
through a moderate revenue decline in the high end consumer space.
However, revenues in the computing end market experienced exceptional
growth with strong demand for our desktop and notebook power management
solutions. Revenues from the industrial market recovered nicely as
military programs resumed their normal pace in the second quarter, while
revenues in the communications market were flat coming off of a very
strong first quarter," said Mr. Bell.

During the quarter, the Company repurchased approximately $30 million or
1.1 million shares of its stock, under a previously announced stock
repurchase program. The Company's Board of Directors has also authorized
the payment of a quarterly dividend of $0.12 per share of common stock.
The payment of this dividend will be made on August 22, 2008 to
shareholders of record as of the close of business on August 12, 2008.

Business Outlook

"For the third quarter, we are again cautious about the economy and its
impact on our business," said Mr. Bell. "However, given the strength of
orders in the second quarter and our backlog entering the third quarter,
we believe that Intersil will again show sequential revenue growth of 1%
to 3%. Excluding the extra week in the second quarter, this represents
sequential revenue growth of 6% to 8%, which is in line with normal
seasonality. We expect GAAP earnings per diluted share of approximately
$0.31 to $0.33 and non-GAAP earnings per diluted share of approximately
$0.39 to $0.40."

Investors and interested parties within the United States may listen to
Intersil's conference call on July 23rd at 1:45 p.m. Pacific/4:45 p.m.
Eastern by dialing (866) 713-8563 using the password "Intersil".
International callers may connect to the call by dialing (617) 597-5311. A
replay of Intersil's conference call will be available for two weeks by
dialing (888) 286-8010 in the U.S. or (617) 801-6888 internationally using
the access code "60609235". A webcast replay of the conference call will
be available for two weeks on the Company's web site at
http://www.intersil.com/investor. A copy of this press release may be
found on the Company's web site at http://www.intersil.com/investor.

About Intersil

Intersil Corporation is a world leader in the design and manufacture of
high-performance analog semiconductors. The Company's products address
some of the industry's fastest growing markets, including 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. For more information
about Intersil or to find out how to become a member of our winning team,
visit the Company's web site and career page at www.intersil.com.

NON-GAAP REPORTING

In addition to GAAP reporting, Intersil reports net income or loss and
diluted earnings per share on a non-GAAP basis. This non-GAAP earnings
information excludes stock-based compensation expense, amortization of
intangibles, unusual items and related tax effects. Intersil believes this
information provides meaningful insight into the Company's on-going
performance and has therefore chosen to provide this information to
investors for a more consistent basis of comparison and to emphasize the
results of on-going operations. Intersil also uses this information
internally to evaluate and manage the Company. A reconciliation between
GAAP and non-GAAP information is included in the tables below.

FORWARD-LOOKING STATEMENTS

Intersil Corporation press releases and other related comments may contain
forward-looking statements as defined in Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, in
connection with the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based upon Intersil Corporation's
("Intersil") management's current expectations, estimates, beliefs,
assumptions, and projections about Intersil's business and industry. 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, are intended to
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. These forward-looking statements are not guarantees of future
performance and are subject to certain risks, uncertainties, and
assumptions that are difficult to predict. Therefore, our actual results
could differ materially and adversely from those expressed in any
forward-looking statements as a result of various risk factors. Intersil
does not adopt and is not responsible for any forward-looking statements
and projections made by others in this press release. Intersil's Annual
Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent
Current Reports on Form 8-K, and other Intersil filings with the U.S.
Securities and Exchange Commission ("SEC") (which you may obtain for free
at the SEC's web site at http://www.sec.gov) discuss some of the important
risk factors that may affect our business, results of operations, and
financial condition. 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.

-- FINANCIAL
TABLES TO FOLLOW --

Intersil Corporation
Consolidated Statements of Operations
Unaudited
(In US$ millions, except shares and per share amounts)

Quarter Ended Two Quarters Ended
------------------------------- ----------------------
July 4, June 29, March 28, July 4, June 29,
2008 2007 2008 2008 2007
--------- --------- --------- ---------- ----------
(Q2 2008) (Q2 2007) (Q1 2008) (YTD 2008) (YTD 2007)

Net revenues $ 216.2 $ 178.3 $ 203.7 $ 419.9 $ 346.1
Product cost of
revenues 93.7 76.3 94.1 187.7 147.9
--------- --------- --------- ---------- ----------
Gross profit 122.6 102.0 109.6 232.2 198.2
Expenses
Research and
development 38.6 34.1 35.1 73.8 64.8
Selling, general
and
administrative 36.3 33.3 27.5 63.8 63.4
Amortization of
purchased
intangibles 3.1 2.4 3.0 6.0 4.7
Restructuring 1.2 - 3.6 4.9 -
--------- --------- --------- ---------- ----------
Operating income
from continuing
operations 43.4 32.2 40.4 83.8 65.3
Gain (loss) on
deferred comp
investments,
net 0.8 0.6 (1.0) (0.1) 0.7
Loss on
investments - - (6.4) (6.4) -
Interest income,
net 4.1 8.2 4.8 8.9 16.1
--------- --------- --------- ---------- ----------
Income from
continuing
operations before
income taxes 48.3 41.0 37.9 86.2 82.1
Income tax
(benefit)
expense from
continuing
operations 10.3 9.8 (9.8) 0.5 17.8
--------- --------- --------- ---------- ----------
Income from
continuing
operations 38.0 31.2 47.7 85.7 64.3
Discontinued
operations
Income (loss)
from
discontinued
operations,
before taxes - - - - -
Income tax
(benefit)
expense from
discontinued
operations - - (19.4) (19.4) -
--------- --------- --------- ---------- ----------
Income (loss) from
discontinued
operations - - 19.4 19.4 -
--------- --------- --------- ---------- ----------
Net income $ 38.0 $ 31.2 $ 67.1 $ 105.1 $ 64.3
========= ========= ========= ========== ==========

Earnings per share
Basic
Continuing
operations $ 0.31 $ 0.23 $ 0.38 $ 0.69 $ 0.48
Discontinued
operations - - 0.15 0.16 -
--------- --------- --------- ---------- ----------
Net income per
share $ 0.31 $ 0.23 $ 0.53 $ 0.84 $ 0.48
========= ========= ========= ========== ==========
Diluted
Continuing
operations $ 0.30 $ 0.23 $ 0.38 $ 0.68 $ 0.47
Discontinued
operations - - 0.15 0.15 -
--------- --------- --------- ---------- ----------
Net income per
share $ 0.30 $ 0.23 $ 0.53 $ 0.84 $ 0.47
========= ========= ========= ========== ==========
Weighted average
shares
Basic 123.6 133.5 125.9 124.7 134.3
========= ========= ========= ========== ==========
Diluted 124.6 134.5 126.9 125.7 135.6
========= ========= ========= ========== ==========

Quarter Ended Two Quarters Ended
------------------------------- ----------------------
Other Financial July 4, June 29, March 28, July 4, June 29,
Metrics 2008 2007 2008 2008 2007
--------- --------- --------- ---------- ----------
Stock
compensation
expense by
classification:
Cost of sales $ 1.1 $ 1.2 $ 1.0 $ 2.1 $ 2.1
Research and
development 3.7 4.6 3.5 7.2 8.0
Selling,
general and
administrative 5.9 7.0 0.9 6.8 12.3
Free cash flow:
Cash flow from
operations $ 56.3 $ 72.4 $ 59.1 $ 115.4 $ 116.6
Proceeds from
sales of PP&E 0.1 0.5 - 0.1 4.9
Capital
expenditures (8.7) (1.8) (14.1) (22.8) (6.0)
--------- --------- --------- ---------- ----------
Total free cash
flow $ 47.7 $ 71.1 $ 45.0 $ 92.7 $ 115.5
========= ========= ========= ========== ==========

Depreciation $ 5.7 $ 5.0 $ 5.2 $ 10.9 $ 10.5
========= ========= ========= ========== ==========
Note: Totals and percentages may not add or calculate precisely due to
rounding.

Intersil Corporation
Non-GAAP Financial Information
Unaudited
(In US$ millions, except share and per share amounts)

Quarter ended
--------------------
July 4, June 29,
2008 2007
--------- ---------
Net income on GAAP basis: $ 38.0 $ 31.2
Acquisition related expenses - intangibles
amortization 3.1 2.4
Stock compensation expense 10.7 12.8
Restructuring 1.2 -
Associated tax effects (3.3) (4.0)
--------- ---------
Net income on Non-GAAP basis: $ 49.7 $ 42.4
========= =========

Non-GAAP diluted earnings per share $ 0.39 $ 0.31
========= =========

Diluted weighted average common shares outstanding 124.6 134.5
Diluted weighted average shares difference
attributable to FAS 123R 1.9 2.9
--------- ---------
Non-GAAP diluted weighted average common shares
outstanding 126.5 137.4
========= =========

The above non-GAAP presentations of Net Income, EPS and WAS is adjusted to
reflect financial results excluding stock-based compensation, amortization
of intangibles, discontinued operations and unusual items. These non-GAAP
presentations are provided to enhance the reader's overall understanding
and comparability of the Company's financial performance.

Note: Totals and percentages may not add or calculate precisely due to
rounding.

Intersil Corporation
Consolidated Balance Sheets
Unaudited
(In US$ millions)

July 4, Dec 28,
2008 2007
----------- ----------
Assets
Current Assets
Cash, cash equivalents and short-term investments $ 340.4 $ 483.8
Trade receivables, net 121.5 117.4
Inventories, net 99.8 97.7
Prepaid expenses and other current assets 8.7 10.0
Deferred income taxes 34.7 39.5
----------- ----------
Total Current Assets 605.1 748.5
Other Assets
Property, plant and equipment, net 120.6 109.6
Purchased intangibles, net 23.9 29.9
Goodwill 1,450.3 1,445.8
Deferred income taxes 31.5 37.5
Long-term investments 119.8 19.1
Other 16.3 14.6
----------- ----------
Total Other Assets 1,762.5 1,656.5
----------- ----------
Total Assets $ 2,367.5 $ 2,405.0
=========== ==========

Liabilities and Shareholders' Equity
Current Liabilities
Trade accounts payable $ 46.7 $ 40.2
Income taxes payable 6.0 19.2
Deferred net revenue 11.4 10.3
Other accrued items 68.4 55.7
----------- ----------
Total Liabilities 132.5 125.4
Non-current Liabilities
Income taxes payable - 40.7

Total Shareholders' Equity 2,235.0 2,238.9
----------- ----------
Total Liabilities and Shareholders' Equity $ 2,367.5 $ 2,405.0
=========== ==========

Note: Totals and percentages may not add or calculate precisely due to
rounding.

Contact:
Jonathan Kennedy
Investor Relations
Intersil Corporation
(408) 546-3399
investor@intersil.com

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