We completed our second quarter on June 29, 2012. An earnings press release was issued today at approximately 1:05 pm Pacific Time. A copy of the press release and supplementary slides to accompany the earnings conference call are available on the Investor Relations section of our website at ir.intersil.com.In addition, this call is being webcast live over the Internet, and may also be accessed via the Investor Relations section of our website. A telephonic replay of the conference call and webcast will be available for two weeks through August 08. Questions in the call may be also submitted online via the webcast, but will be answered via email after the call. Please note that some of the comments made during this conference call may contain forward-looking statements. I’d like to remind you that while these statements reflect our current best judgment, they are subject to risks and uncertainties that could cause our actual results to vary. These risk factors are discussed in detail in our filings with the Securities and Exchange Commission. In addition, during this call we may refer to financial measures that are not prepared according to generally accepted accounting principle. We sometime use these measures because we believe they provide useful information about the performance of our business, and still be considered by investors in conjunction with GAAP measures reported. Our agenda for the call today is as follows: Dave Bell will discuss key highlights from the quarter. Jonathan Kennedy will then review the quarter from our financial perspective, and then Dave will follow with additional commentary on each of our three key markets as well as forward-looking guidance. A Q&A session will follow prepared remarks. I’d like to now turn the call over to Dave Bell, President and CEO of Intersil. David Bell Thanks, Brendan. Good afternoon, and thank you for joining us today for Intersil’s second quarter 2012 earnings conference call. I’ll first quickly review some significant events and results of the second quarter, and then I’ll make detailed comments about each of our end markets, after Jonathan Kennedy’s financial report.
One year ago, we introduced our top ten growth drivers for the first time. Since that time, they’ve provided clarity for our investors about the areas where we’re confident we can win in an increasingly competitive semiconductor market. But it has also been a catalyst for focusing resources within Intersil.At our Analyst Day on May 8, we updated our top ten growth drivers, and provided a rough estimate for the growth trajectories in each area. We reaffirmed our conviction that these ten growth drivers will create an incremental $700 million in sales by 2016, five years from when that goal was first introduced last July. At this point, nearly all of our development resources are focused on our top ten growth drivers. These are the carefully chosen product areas where Intersil has the technology, the talent and the customer relationships to much larger rival. During our Analyst Day, we also indicated that we were about to make significant operating expense reductions. We explained that these OpEx reductions amounting to $40 million per year in savings would allow Intersil to reach a non-GAAP operating profit margin of 24% at a $200 million per quarter revenue rate. In light of the soft economic conditions, we believe this reduced revenue goal is more achievable during the coming year. Nearly all of these OpEx reductions were implemented during the second quarter, so the third quarter's profitability will be significantly improved. We’re now a lean, mean and focused product development machine, and expecting several of our top 10 growth drivers to begin generating significant growth in 2013. I’d now like to talk briefly about the business conditions in the second quarter. Recovery from the latest semiconductor cycle began in the first part of the second quarter, however bookings weakened again in June, and as a result we closed the quarter with a book-to-bill ratio slightly less than one. Worries over weakness in the global economy, particularly in Europe had weight on all our end markets.
We reported second quarter revenues of $163 million, a 22% decrease from $209.1 million in the second quarter of 2011, and a 4.5% increase from $156 million in the first quarter of 2012. We also reduced our inventory and our long-term debt during the quarter, positioning the company for profitable growth in the coming quarters, Jonathan will provide more financial details in his remarks.Regardless of the economic cycles, our Board of Directors is committed to sustaining shareholder returns, and has authorized a quarterly dividend at $0.12 per share common stock. At today’s closing price, that translates to a yield of approximately 5%. At this time, I'd like to turn the call over to Jonathan Kennedy for a financial summary of the second quarter. I’ll then discuss results from each of our end markets in more detail, and finally, provide comments on our third quarter 2012 outlook. Jonathan? Jonathan Kennedy Thank you, Dave. I'll start with the income statement. Today, we reported $163 million in revenue for the second quarter, a 22% decrease from the second quarter last year, and a 4.5% sequential increase from the first quarter of 2012. Revenue increased sequentially in both industrial and infrastructure and the personal computing market, but was offset by decline in the consumer market, where weakness in optical sensor sales to certain smartphone and display customers accounted for most of the decline. Our lead times remained normal throughout the quarter with no significant supply constraints, and our internal utilization remained below optimal level at just under 70% as production continued below consumption, and inventory levels were reduced. Second quarter churns were about 36%, and we are expecting Q3 churns to be about the same at the midpoint of our guidance. Our gross margin was 54.5% in Q2, 10 points below the previous quarter driven primarily from unfavorable product mix.
Looking to Q3, we expect gross margins to be approximately flat to slightly down, driven by unfavorable mix that is typical in the third quarter. During the second quarter, we completed a previously announced restructuring plan that resulted in a one-time restructuring charge of $8.3 million, and a reduction of our annual operating expenses by about $40 million.Read the rest of this transcript for free on seekingalpha.com