-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QBPI+VpuSNJHgYzx0NKvCi1YPLsmnIoO5iiyJYRmFTIad2jLx9wN/TSRrdLHw5Ox Npq5CakHcQ7fO2NIBFDl7A== 0000310568-96-000001.txt : 19960208 0000310568-96-000001.hdr.sgml : 19960208 ACCESSION NUMBER: 0000310568-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960207 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROSEMI CORP CENTRAL INDEX KEY: 0000310568 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 952110371 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08866 FILM NUMBER: 96512347 BUSINESS ADDRESS: STREET 1: 2830 S FAIRVIEW ST STREET 2: PO BOX 26890 CITY: SANTA ANA STATE: CA ZIP: 92704 BUSINESS PHONE: 7149798220 FORMER COMPANY: FORMER CONFORMED NAME: MICROSEMICONDUCTOR CORP DATE OF NAME CHANGE: 19830323 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-Q X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities --- Exchange Act of 1934 For the Quarterly Period Ended December 31, 1995 ------------------------------------------------ or --- Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------- ------ Commission File No. 0-8866 MICROSEMI CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 95-2110371 ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2830 South Fairview Street, Santa Ana, California 92704 -------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (714) 979-8220 ---------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 month period (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- The number of shares outstanding of the issuer's Common Stock, $.20 par value, on January 19, 1996 was 7,801,636. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS The unaudited consolidated financial information for the quarter ended December 31, 1995 of Microsemi Corporation and Subsidiaries (the "Company")and the comparative unaudited consolidated financial information for the corresponding period of the prior year, together with the balance sheet as of October 1, 1995 are attached hereto and incorporated herein by this reference. MICROSEMI CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (amounts in 000's)
December 31, 1995 October 1, 1995 ----------------- --------------- (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents $ 3,117 $ 3,965 Accounts receivable less allowance for doubtful accounts, $1,903 at December 31, 1995 and $2,018 at October 1, 1995 19,647 20,191 Inventories 43,981 43,281 Deferred income taxes 5,471 5,471 Other current assets 2,664 4,375 ------- ------- Total current assets 74,880 77,283 ------- ------- Property and equipment, at cost 53,205 52,044 Less: Accumulated depreciation (29,389) (28,442) ------- ------- 23,816 23,602 ------- ------- Deferred income taxes 569 569 ------- ------- Other assets 3,506 3,361 ------- ------- $ 102,771 $ 104,815
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LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable to banks and others $ 3,445 $ 4,561 Current maturities of long-term debt 2,075 2,328 Accounts payable and accrued liabilities 19,320 19,952 Income taxes payable 2,862 4,016 Deferred income taxes 712 712 ------- ------- Total current liabilities 28,414 31,569 ------- ------- Deferred income taxes 1,864 1,864 ------- ------- Long-term debt 47,767 48,158 ------- ------- Other long-term liabilities 2,235 2,114 ------- ------- Stockholders' equity Common stock, $.20 par value; authorized 20,000 shares; issued 7,796 shares at December 31, 1995 and 7,789 shares at October 1, 1995 1,559 1,558 Paid-in capital 14,664 14,644 Retained earnings 6,268 4,908 ------- ------- Total stockholders' equity 22,491 21,110 ------- ------- $ 102,771 $ 104,815 ======= ======= See accompanying Notes to Unaudited Consolidated Financial Statements.
MICROSEMI CORPORATION AND SUBSIDIARIES Unaudited Consolidated Statements of Operations (amounts in 000's, except earnings per share)
13 Weeks Ended 13 Weeks Ended December 31, 1995 January 1, 1995 ----------------- --------------- Net sales $ 35,299 $ 27,657 Cost of sales 26,096 20,653 ------ ------ Gross profit 9,203 7,004 ------ ------ Operating expenses Selling 2,076 1,895 General and administrative 3,171 2,318 Amortization of goodwill and other intangible assets 57 49 ------ ------ Total operating expenses 5,304 4,262 ------ ------ Income from operations 3,899 2,742 ------ ------ Other income (expense) Interest expense (net) (1,228) (1,117) Other (207) 9 ------ ------ Total other expense (1,435) (1,108) ------ ------ Earnings before income taxes 2,464 1,634 Provision for income taxes 1,035 621 ------ ------ Net earnings $ 1,429 $ 1,013 ====== ====== Earnings per share - Primary $ 0.17 $ 0.13 ====== ====== - Fully diluted $ 0.15 $ 0.12 ====== ====== Common and common equivalent shares outstanding - Primary 8,266 7,971 - Fully diluted 11,789 11,511 See accompanying Notes to Unaudited Consolidated Financial Statements.
MICROSEMI CORPORATION AND SUBSIDIARIES Unaudited Consolidated Statements of Retained Earnings (Accumulated Deficit) (amounts in 000's)
13 Weeks Ended 13 Weeks Ended December 31, 1995 January 1, 1995 ----------------- --------------- Retained earnings (accumulated deficit) at beginning of period $ 4,908 $ (1,128) Net earnings 1,429 1,013 Translation loss from foreign currency (69) (2) ----- ------- Retained earnings (accumulated deficit) at end of period $ 6,268 $ (117) ===== ======= See accompanying Notes to Unaudited Consolidated Financial Statements.
MICROSEMI CORPORATION AND SUBSIDIARIES Unaudited Consolidated Statements of Cash Flows (amounts in 000's)
13 Weeks Ended 13 Weeks Ended December 31, 1995 January 1, 1995 ----------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 1,429 $ 1,013 Adjustments to reconcile net earnings to net cash provided from operating activities: Depreciation and amortization 1,003 900 Decrease in allowance for doubtful accounts (115) (77) Translation loss on foreign currency (69) (2) Changes in assets and liabilities: Accounts receivable 659 2,237 Inventories (700) (994) Other current assets 1,711 (180) Other assets (201) (115) Accounts payable and accrued liabilities (632) (804) Income taxes payable (1,154) 490 ------ ------ Net cash provided from operating activities 1,931 2,468 ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (1,161) (297) ------ ------ Net cash used for investing activities (1,161) (297) ------ ------ CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in notes payable to banks and others (1,116) (1,791) Reduction of long-term debt (644) (788) Increase in (reduction of) other long-term liabilities 121 (3) Exercise of employee stock options 21 35 ------ ------ Net cash used for financing activities (1,618) (2,547) ------ ------ Net decrease in cash and cash equivalents (848) (376) Cash and cash equivalents at beginning of period 3,965 3,994 ------ ------ Cash and cash equivalents at end of period $ 3,117 $ 3,618 ====== ====== See accompanying Notes to Unaudited Consolidated Financial Statements.
MICROSEMI CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS December 31, 1995 1. PRESENTATION OF FINANCIAL INFORMATION The financial information furnished herein is unaudited, but, in the opinion of the management of Microsemi Corporation, includes all adjustments (all of which are normal, recurring adjustments) necessary for a fair presentation of the results of operations for the periods indicated. The results of operations for the first fiscal quarter of the current fiscal year are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The financial statements and notes should, therefore, be read in conjunction with the financial statements and notes thereto in the Annual Report on Form 10-K for the fiscal year ended October 1, 1995. 2. INVENTORIES For interim reporting purposes, cost of goods sold and inventories are estimated based upon the use of the gross profit method applied to each product line. Inventories used in the computation of cost of goods sold were:
December 31, 1995 October 1, 1995 ----------------- --------------- (amounts in 000's) Raw materials $ 10,374 $ 10,367 Work in progress 20,744 20,847 Finished goods 12,863 12,067 ------ ------ $ 43,981 $ 43,281 ====== ======
3. LONG-TERM DEBT Long-term debt consisted of:
December 31, 1995 October 1, 1995 ----------------- --------------- (amounts in 000's) Industrial Development Bond-bearing interest at 7.875% due in installments from 1996 to 2000; secured by first deed of trust $ 2,905 $ 2,905 Industrial Development Bond-bearing interest at 6.75% due in installments from 1998 to 2005; secured by first deed of trust 5,350 5,350 Convertible Subordinated Debentures-bearing interest at 5.875% due in March 2012 33,281 33,281 Convertible Subordinated Notes-bearing interest at 10% due 1999 2,000 2,000 Notes payable-bearing interest at ranges of 5% - 13% due between March 1996 and July 2002 6,306 6,950 ------ ------ 49,842 50,486 Less current portion (2,075) (2,328) ------ ------ $ 47,767 $ 48,158 ====== ======
The Company's 5.875% Convertible Subordinated Debentures require annual sinking fund payments in the amount of 5% of the principal amount thereof, commencing in March 1997, less the principal amount of converted or redeemed debentures. 4. EARNINGS PER SHARE Earnings per share for the primary basis have been computed based upon the weighted average number of common and common equivalent shares outstanding during the respective periods. Earnings per share for the fully diluted basis have been computed, when the result is dilutive, based upon the assumption that the convertible subordinated debt had been converted to common stock at the date of issuance, with a corresponding increase in net income to reflect a reduction in related interest expense, net of applicable taxes. 5. STATEMENT OF CASH FLOWS For purposes of the Consolidated Statements of Cash Flows, the Company considers all short-term, highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Supplementary information - -------------------------
13 weeks ended 13 weeks ended December 31, 1995 January 1, 1995 ----------------- --------------- Cash paid during the period for: (amounts in 000's) Interest $ 541 $ 755 Income taxes $ 2,189 $ 123
6. CONTINGENCY In Broomfield, Colorado, an owner of property located adjacent to a manufacturing facility owned by a subsidiary of the Company had filed suit against the subsidiary and other parties, claiming that contaminants migrated to his property, thereby diminishing its value. In August 1995, the subsidiary, together with former owners of the manufacturing facility, agreed to settle the claim and to indemnify the owner of the adjacent property from remediation costs. Although TCE and other contaminants previously used at the facility are present in soil and groundwater on the subsidiary's property, the Company vigorously contests any assertion that the subsidiary is the cause of the contamination; however, there can be no assurance that recourse will be available against third parties. State and local agencies in Colorado are reviewing current data and considering study and cleanup options, and it is not yet possible to predict costs for remediation or the allocation thereof among potentially responsible parties. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction Microsemi Corporation is a multinational supplier of high reliability power semiconductors, surface mount and custom diode assemblies for the electronics, computer, telecommunications, defense/aerospace and medical markets. The Company's semiconductor products include diodes, transistors and silicon controlled rectifiers (SCR's) which can be used in virtually all electrical and electronic circuits. Typical functions include solid state switching, signal processing, voltage and power regulation, circuit protection and absorption of electrical surges and transient voltage spikes. Technologies for these devices range from the very mature mesa rectifier diodes still used in all power supply applications to the newly designed micro-miniature transient absorbers, which are mounted within the cables used to connect computer and telecommunications equipment. Capital Resources and Liquidity Microsemi Corporation's operations in the first quarter of fiscal year 1996 were funded with internally generated funds and borrowings from the Company's line of credit. Under the current line of credit, the Company can borrow up to $20,000,000 based upon percentages of certain accounts receivable and inventory balances at certain of the Company's operations. As of December 31, 1995, $2,935,000 was borrowed under this credit facility. At December 31, 1995, the Company had $3,117,000 in cash and cash equivalents. A letter of credit for the Microsemi Santa Ana Industrial Development Revenue Bond is carried by a bank in the amount of $5,557,000. This letter of credit guarantees the repayment of a $5,350,000 Industrial Development Revenue Bond which was issued in April 1985 and carries interest currently at 6.75% per annum, through the City of Santa Ana for the construction of improvements and new facilities at the Santa Ana plant. The terms require principal payments of $350,000 in 1996, 1997 and 1998; $100,000 from 1999 to 2004 and $3,700,000 in 2005. The Company believes that it can meet its current operating cash and debt service requirements with internally generated funds together with its available borrowing capacity. The average collection period of accounts receivable was 51 days for the first quarter of fiscal year 1996 compared to 55 days for the same period of fiscal year 1995. The average days sales of products in inventories decreased to 153 days for the first thirteen weeks of fiscal year 1996 from 179 days for the corresponding period of fiscal year 1995. This primarily resulted from higher sales in the current quarter. The Company has no other significant capital commitments. Order backlog at December 31, 1995 increased to $66,600,000 from $49,700,000 at January 1, 1995. RESULTS OF OPERATIONS FOR THE THIRTEEN WEEKS ENDED DECEMBER 31, 1995 COMPARED TO THE QUARTER ENDED JANUARY 1, 1995. Net sales for the first quarter of fiscal year 1996 increased 28% to $35,299,000, from $27,657,000 for the first quarter of fiscal year 1995. The increase of $7,642,000 was primarily due to higher volume of shipments in commercial and commercial space products. Gross profit increased $2,199,000 to $9,203,000 for the first quarter of fiscal year 1996 from $7,004,000 for the first quarter of fiscal year 1995 as the result of higher sales; however, as a percentage of sales, gross profit remained relatively constant at 26% and 25% for the first quarters of fiscal years 1996 and 1995, respectively. Operating expenses for the first thirteen weeks of fiscal year 1996 increased $1,042,000, compared to the corresponding period of the prior year; however, operating expense decreased slightly as a percentage of sales. The effective tax rates of 42% and 38% in the first quarters of fiscal years 1996 and 1995, respectively, are the combined result of taxes computed on foreign and domestic income. PART II - OTHER INFORMATION Item 1. Legal Proceedings ----------------- Inapplicable. Item 2. Changes in Securities --------------------- Inapplicable. Item 3. Defaults Upon Senior Securities ------------------------------- Inapplicable. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- (a) Inapplicable. (b) Inapplicable. (c) Inapplicable. (d) Inapplicable. Item 5. Other Information ----------------- None Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: Exhibit 11.3 Unaudited computation of Earnings Per Share for the thirteen weeks ended December 31, 1995 and January 1, 1995 Exhibit 27.5 Unaudited Financial Data Schedule for the quarter ended December 31, 1995 (b) Reports on Form 8-K: None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MICROSEMI CORPORATION By: /DAVID R. SONKSEN/ ---------------------------- David R. Sonksen Vice President - Finance and Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer and duly authorized to sign on behalf of the Registrant) DATED: February 6, 1996 EX-11 2 EXHIBIT 11.3 UNAUDITED EARNINGS PER SHARE Exhibit 11.3 Microsemi Corporation and Subsidiaries Unaudited Earnings Per Share (in thousands, except per share data)
13 weeks ended 13 weeks ended December 31, 1995 January 1, 1995 ----------------- --------------- PRIMARY Net earnings $ 1,429 $ 1,013 ====== ====== Outstanding shares 7,796 7,615 Equivalent shares from stock options 470 356 ------ ------ Common and common equivalent shares 8,266 7,971 ====== ====== Earnings per share $ 0.17 $ 0.13 ====== ====== FULLY DILUTED Net earnings $ 1,429 $ 1,013 Interest savings from conversion of convertible debt, net of income taxes 323 333 ------ ------ $ 1,752 $ 1,346 ====== ====== Outstanding shares 7,796 7,615 Equivalent shares from stock options 470 373 Convertible shares 3,523 3,523 ------ ------ Common and common equivalent shares 11,789 11,511 ====== ====== Earnings per share $ 0.15 $ 0.12 ====== ======
EX-27.5 3 FINANCIAL DATA SCHEDULE FOR 1ST QUARTER 1996
5 1000 3-MOS SEP-29-1996 OCT-02-1995 DEC-31-1995 3117 0 21550 1903 43981 74880 53205 29389 102771 28414 47767 0 0 1559 20932 102771 35299 35299 26096 26096 207 0 1228 2464 1035 1429 0 0 0 1429 .17 .15
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