(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended June 26, 2011
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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95-1528961
(IRS Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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||||
Common Stock, par value $1.00
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The New York Stock Exchange
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Large accelerated filer x
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Accelerated filer o
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Non-accelerated filer o (Do not check if smaller reporting company)
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Smaller reporting company o
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Automotive
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Networking
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Industrial Motors
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Displays
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Consumer Electronics
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Servers
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Personal Computers
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Game Stations
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Household Appliances
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Satellites
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Telecommunications
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Renewable Energy
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·
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Providing power management solutions tailored to target market segment applications and customers’ needs. Our business is divided into six reporting segments; Power Management Devices, Energy Saving Products, Automotive Products, Enterprise Power, HiRel, and Intellectual Property. With the exclusion of our Intellectual Property segment, our segments are organized around the end markets and customers that they target and serve. We call these segments (excluding our Intellectual Property segment which is described in “Products and Technology” section) our “customer segments”, and they consist of the following:
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–
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Power Management Devices (“PMD”) – Our PMD segment provides high performance power MOSFETs which include the lowest RDS(on) and widest range of packages up to 250V within the power management semiconductor industry for a range of applications including power supply, data processing, telecommunications, industrial, and commercial battery-powered systems. Key products used by our PMD segment include, Trench HEXFET®MOSFETs, Discrete HEXFET®MOSFETs, Dual HEXFET®MOSFETs, FETKY®s, and DirectFET®s.
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–
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Energy Saving Products (“ESP”) – Our ESP segment provides integrated design platforms that enable our customers to add energy-conserving features to help achieve lower operating energy and manufacturing costs. Our integrated design platforms incorporate our silicon packaging technology to help improve system performance. The ESP segment’s primary market applications include motor control appliances, industrial automation, lighting and display, audio and video. The ESP segment’s key products include our analog HVICs and IGBT platforms, digital control ICs and IRAM integrated power modules. The ESP segment’s iMotion platform targets the growing trend towards variable speed motors in the appliance market.
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–
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Automotive Products (“AP”) – Our AP segment provides high performance and energy saving solutions for a broad variety of automotive systems, ranging from typical 12V power net applications up to 1200V hybrid electric vehicle applications. Our automotive expertise includes supplying products for various automotive applications including AC and DC motor drives of all power classes, actuator drivers, automotive lighting (such as high intensity discharge lamps), direct fuel injection for diesel and gasoline engines, hybrid electric vehicle power train and peripheral systems for micro, mid, full and plug-in hybrids for electric vehicles, as well as for body electronic systems like glow plugs, Positive Temperature Coefficient (“PTC”) heaters, electric power steering, fuel pumps, Heating Ventilation and Air Conditioning (“HVAC”) and rear wipers. Our automotive product designs are used in application-specific solutions (application-specific integrated circuits (“ASICs”) and application-specific standard parts (“ASSPs”) and generic high volume products for multiple original equipment manufacturer (“OEM”) platform usage. Key products used by our AP segment include HVICs, intelligent power switch ICs, power MOSFETs including DirectFET® and IGBTs.
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–
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Enterprise Power (“EP”) – Our EP segment’s primary applications include servers, storage, routers, switches, infrastructure equipment, notebooks, graphic cards, and gaming consoles. The large and growing server market has placed an emphasis and premium on power efficiency. We see this trend increasing in other EP segment target applications. We offer a broad portfolio of power management system products that deliver benchmark power density, efficiency and performance. These products include our DirectFET® discrete products, digital controllers, power monitoring products, XPhase®, SupIRBuckTM and iPOWIR® voltage regulators, Low voltage ICs, and PowIRstagesTM.
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–
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HiRel – Our HiRel segment provides high-reliability power components and sub-assemblies designed to address power management requirements in mission critical applications including satellites and space exploration vehicles, military hardware and other high- reliability applications such as commercial aircraft, undersea telecommunications, and oil drilling in heavy industry and products used in biomedical applications. Our HiRel segment has a legacy of more than thirty years of experience in many of these market segments, has developed strategic relationships with major system integrators worldwide and has the knowledge, technology and processes required to meet the requirements of customers in the high-reliability markets. Key products of the HiRel segment include RAD-Hard discretes, RAD-Hard ICs, power management modules and DC-DC converters.
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·
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Establishing leadership in core power management technologies. We attempt to establish leadership in core technologies and expertise related to the solutions we offer, as follows:
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–
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Proprietary process technology - Our manufacturing efforts are heavily focused on proprietary processes that support our power management products. As products decrease in size and increase in functionality, our wafer fabrication facilities must be able to manufacture power management solutions with sub-micron pattern widths. This precision fabrication carries over to assembly and test operations, where advanced packaging technology and comprehensive testing are required to address the ever increasing performance and complexity embedded in integrated circuits.
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–
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Packaging technology - Innovative packaging technology can help to address growth opportunities within our business segments by helping our products to deliver better efficiency, performance and the various physical sizes required by our customers. We have developed a number of proprietary packaging technologies to support our broad portfolio of power management semiconductors. We also have developed specific packaging technologies to help enhance our offerings in particular applications. Our DirectFET2® package for automotive applications is an example of the use of our packaging technology adapted to a specific industry application. This package provides low die free package resistance, low top-side thermal impedance and low package inductance with no leadframe, no wire bonds or molding.
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–
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Application expertise - With the world continuing its focus on energy conservation, we develop technologies that advance the state of the art in energy-efficiency for power management semiconductors. Our technologies help address the following: thermal management, which is the management of the heat load within an application; high frequency, which is the challenge in our customer’s applications of placing components closer together that use less energy; high voltage, which is the challenge of moving a high amount of energy within an application; and cost reduction, which is the challenge of combining elements in smaller and smaller chips and smaller power management architecture at a lower cost. We believe our products and technologies are competitive in these areas in the relevant market segments in which we compete.
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–
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Design engineering capabilities - Our power management semiconductors provide valuable solutions to our customers. Our solutions solve specific design problems in energy efficient applications ranging from feature-rich consumer devices to space constrained applications such as in computing or in IT systems. This is demonstrated by our development of the SupIRBuckTM integrated voltage regulator for Point-of-Load (“POL”) applications in conventional technologies and our development of Gallium Nitride (“GaN”) technology for use in emerging technologies.
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·
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The building of an efficient and flexible manufacturing and supply chain. Our strategy is to build our products using a combination of internal factories and contract manufacturers, whether for wafer fabrication or assembly. We use our internal factories primarily to manufacture our new products and products where we utilize proprietary technologies. We also use external foundries and contract manufacturers to supplement our internal capacity and respond to changes in demand for wafer fabrication and back-end assembly, and to manufacture certain of our older technology products. As part of our plan to use external contract manufacturers to more efficiently manage changes in demand, during fiscal year 2011 we added additional capacity to our existing contract wafer fabrication capacity and assembly capacity. Our goal is to utilize external contractors for 30 percent of our wafer fabrication requirements and 50-60 percent of our packaging needs. While we have achieved these goals in the past, these external contractor percentages may fluctuate quarter to quarter based upon management’s decision to maintain efficient and flexible manufacturing during periods of lower or higher end-market demand, the availability of internal and external capacity and the lead times required to increase capacity, as well as adjustments made by us in light of actual and/or anticipated demand. During our 2009 fiscal year, we initiated plans to consolidate and close certain of our wafer fabrication facilities in Newport, Wales and El Segundo, California. However, due to the significant increase in demand, those facilities that had been closed as part of the consolidation plan for Newport, Wales have been reopened and the closure of the El Segundo, California facility has been suspended, for the foreseeable future. (See Note 8, “Asset Impairment, Restructuring and Other Charges (Recoveries)” to our Consolidated Financial Statements in Part II, Item 8).
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·
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Strategic relationships with Tier One Original Equipment Manufacturers (“OEMs”), Original Design Manufacturers (“ODMs”), and Distributors. We seek to expand our relations with industry leaders and develop business relationships with key distributors in each of our target markets in order to be able to deliver advanced solutions to our customers. As part of our strategy, we bring to our customers an experienced technical sales team that is recognized for its ability to assist customers in providing power management solutions for the customers’ immediate and longer-term technology and product requirements. These technical sales teams are comprised of account managers and field application engineers. These teams interface with our customers and work closely with their designers and purchasing organizations to integrate our products and/or solutions into theirs to create greater energy efficiency. To better understand and respond to our customers’ longer-term needs, our technical sales teams often facilitate communication from customers to the IR respective marketing and design center teams who address their evolving technological needs.
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Power Management
Devices
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Energy Saving
Products
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Automotive Products
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Enterprise Power
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HiRel
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Revenues by Fiscal year
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|||||
2011
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$456.8 million
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$275.0 million
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$112.2 million
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$134.6 million
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$190.5 million
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2010
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$345.6 million
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$185.4 million
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$72.9 million
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$128.7 million
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$153.2 million
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2009
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$233.7 million
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$151.1 million
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$54.1 million
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$87.5 million
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$148.3 million
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Primary product function
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Power conversion and management which include the lowest RDS(on) and widest range of packages up to 250V for a diverse range of applications.
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Integrated design platforms that enable customers to add energy-conserving features that help achieve lower operating energy costs and overall system manufacturing bill of material costs.
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Provide high performance and energy saving solutions for a broad variety of automotive systems, ranging from typical 12V power net applications up to 1200V hybrid electric vehicle power management solutions.
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Optimized power management system solutions that deliver power density, efficiency and performance in enterprise power.
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Discrete components, complex hybrid power module assemblies and rugged DC-DC converters utilize leading-edge power technology together with demanding environmental specifications.
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Type of products
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Trench HEXFET® MOSFETs, discrete HEXFET® MOSFETs, dual HEXFET® MOSFETs, FETKY®, DirectFET®s
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High voltage ICs, Digital control ICs, IRAM integrated power modules, IGBTs
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HVICs, intelligent power switch ICs, power MOSFETs including DirectFET® and IGBTs
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Low voltage ICs, DirectFET®s, SupIRBuck™, XPhase® , iPOWIR®, PowIRstagesTM, and digital controllers
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RAD-Hard MOSFETs RAD-Hard ICs, power modules/hybrid solutions, motor controls, DC-DC converters
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End applications
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Power supply, data processing, tele-communications and industrial and commercial battery-powered systems
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Motor control appliances, industrial automation, lighting and display, audio and video
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AC and DC motor drives of all power classes, actuator drivers, automotive lighting (such as high intensity discharge lamps), direct fuel injection in diesel and gasoline engines, hybrid electric vehicle power train and peripheral systems in micro, mild, full and plug-in hybrids or electric vehicles, as well as for body electronic systems like glow plugs, PTC heater, electric power steering, fuel pumps, HVAC and rear wipers
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Servers, storage, routers, switches, infrastructure equipment, notebooks, graphic cards, gaming consoles
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Satellites, space exploration vehicles, military hardware and other high-reliability hardware such as commercial aircraft, undersea telecommunications, oil drilling, high reliability devices in heavy industry and biomedical
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Major original equipment manufacturers and end-users
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Delta, Huawei, Samsung, Emerson and Schneider MFG
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Samsung, LG, Kimball, Midea, Delta and Diehl
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Delphi, Nagares, Continental Auto, Bosch, TRW, Honda and Alcoa
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Alcatel, Apple, Asus, Cisco, HP, IBM, Intel and Microsoft
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Lockheed Martin, Raytheon, GE, TYCO, Boston Scientific, Space Systems/Loral, L-3 Communications, BAE, Boeing, Honeywell, Astrium and Northrop- Grumman
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Facility and Approximate Size
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Products
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Fabrication Facilities
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Temecula, California, 396,300 sq. ft.
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Wafer fabrication of HEXFET® power MOSFETs, IGBTs, HEXFREDS, IC’s, Radiation Hardened HEXFET® power MOSFETs, High Reliability products
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El Segundo, California, 301,588 sq. ft. (includes Corporate Offices)
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Radiation Hardened HEXFET® power MOSFETs, High Reliability products
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Mesa, Arizona, 35,000 sq. ft.
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Epitaxial Silicon film deposition wafer production for HEXFET®, power MOSFETs, IGBTs and IC products
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Newport, South Wales, U.K. 457,885 sq. ft.
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Analog ICs, power MOSFETs, HEXFREDS, IGBTs, and wafers
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St. Paul, Minnesota, 17,422 sq. ft.
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Epitaxial wafer production for power semiconductor devices
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Assembly Facilities
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Leominster, Massachusetts, 68,000 sq. ft.
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For the High Reliability market: RAD-Hard MOSFETs, RAD-Hard ICs, power modules/hybrid solutions, and motor controls
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San Jose, California, 34,282 sq. Ft.
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High Reliability DC/DC converters
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Tijuana B.C., Mexico, 208,200 sq. Ft.
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HEXFET®, power MOSFETs, Known Good Die (“KGD”), IGBT, DirectFET
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Segment:
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Customers
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Power Management Devices
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Delta, Huawei, Emerson, Schneider MFG and Zapi
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Energy Saving Products
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Midea, EMB-Papst, Diehl, Samsung, and Delta
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Automotive Products
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Delphi, Nagares, Continental Auto, Bosch, Eskor, Catem and TRW
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Enterprise Power
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HP, Apple, IBM, Delta and Emerson
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HiRel
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Northrop- Grumman, Lockheed Martin, Boeing, Honeywell, General Dynamics, Space Systems/Loral and GE
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Segment:
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Competitors (alphabetical)
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Power Management Devices
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Fairchild, Infineon, ON Semiconductor, STMicroelectronics and Vishay
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Energy Saving Products
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Fairchild, Infineon, IXYS, Mitsubishi, NXP, Renesas, STMicroelectronics and Toshiba
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Automotive Products
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Fairchild, Infineon, NXP, STMicroelctronics, and Vishay
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Enterprise Power
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Infineon, Intersil, Maxim, ON Semiconductor, Texas Instruments, and Volterra
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HiRel
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Aeroflex, Crane, Heico, and Microsemi
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•
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some of our manufacturing costs are denominated in British Pound, Mexican Peso and other foreign currencies; and
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•
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sales of our products are denominated in European Union Euro, Japanese Yen and other foreign currencies; and
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•
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some property, plant and equipment purchases are denominated in Japanese Yen, European Union Euro, British Pound and other foreign currencies.
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Location
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Owned
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Leased
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Semiconductor
Silicon/Wafer
Fabrication
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Assembly/
Module
Manufacturing
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Design
Center
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Business/
Office
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El Segundo, California (U.S.A.)
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X
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X
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X
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X
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X
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Temecula, California (U.S.A.)
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X
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X
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X
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||||
San Jose, California (U.S.A.)
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X
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X
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X
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X
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Irvine, California (U.S.A.)
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X
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X
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|||||
Mesa, Arizona (U.S.A.)
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X
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X
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|||||
Durham, North Carolina (U.S.A.)
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X
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X
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Leominster, Massachusetts (U.S.A.)
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X
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X
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X
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X
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Tewksbury, Massachusetts (U.S.A.)
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X
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X
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X
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||||
St. Paul, Minnesota (U.S.A.)
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X
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X
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|||||
Warwick, Rhode Island (U.S.A.)
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X
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X
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|||||
Tijuana, Mexico
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X
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X
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X
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||||
Reigate, England (U.K.)
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X
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X
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|||||
Newport, Wales (U.K.)
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X
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X
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X
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X
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Skovlunde, Denmark
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X
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X
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|||||
Provence, France
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X
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X
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|||||
Neu Isenburg, Germany
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X
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X
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|||||
Pavia, Italy
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X
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X
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|||||
Singapore
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X
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X
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|||||
Beijing, China
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X
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X
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|||||
Shanghai, China
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X
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X
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|||||
Shenzhen, China
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X
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X
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|||||
Hong Kong, China
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X
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X
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|||||
Seoul, Korea
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X
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X
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|||||
Osaka, Japan
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X
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X
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|||||
Nagoya, Japan
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X
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X
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|||||
Tokyo, Japan
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X
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X
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Name
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Age
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Position
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|||
Oleg Khaykin
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46
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President and Chief Executive Officer
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Ilan Daskal
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46
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Executive Vice President and Chief Financial Officer
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Michael Barrow
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57
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Executive Vice President and Chief Operations Officer
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Timothy Bixler
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44
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Vice President, Secretary and General Counsel
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Adam White
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37
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Senior Vice President, Global Sales (Mr. White was appointed an executive officer in fiscal year 2012)
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2012
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2011
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2010
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||||||||||||||||||||||
Fiscal Quarter
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High
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Low
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High
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Low
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High
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Low
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||||||||||||||||||
1st
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$ | 28.60 | * | $ | 21.48 | * | $ | 20.95 | $ | 18.22 | $ | 20.82 | $ | 14.03 | ||||||||||
2nd
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30.57 | 20.78 | 21.89 | 17.69 | ||||||||||||||||||||
3rd
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33.77 | 29.45 | 22.84 | 17.98 | ||||||||||||||||||||
4th
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34.56 | 24.66 | 25.13 | 18.76 |
Cumulative Total Return
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End of Fiscal Year (In US Dollars)
|
|||||||||||||||||||||||
2006
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2007
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2008
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2009
|
2010
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2011
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|||||||||||||||||||
International Rectifier Corporation
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100 | 95 | 51 | 38 | 52 | 67 | ||||||||||||||||||
S&P 500 Index
|
100 | 118 | 101 | 72 | 85 | 100 | ||||||||||||||||||
S&P 500 Index Information Technology
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100 | 124 | 115 | 92 | 111 | 125 | ||||||||||||||||||
Period
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Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs (1)
|
Maximum Number
(or Approximate
Dollar Value) of Shares
that May Yet be
Purchased Under the
Plans or Programs
|
||||||||||||
March 28, 2011 to April 24, 2011
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— | $ | — | — | $ | 68,754,952 | ||||||||||
April 25, 2011 t1o May 22, 2011
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— | $ | — | — | $ | 68,754,952 | ||||||||||
May 23, 2011 to June 26, 2011
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— | $ | — | — | $ | 68,754,952 |
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(1)
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On October 27, 2008, the Company announced that its Board of Directors had authorized a stock repurchase program of up to $100.0 million. The Company announced on July 20, 2010, that its Board of Directors had authorized an additional $50 million for the stock repurchase program bringing the total authorized for the plan to $150 million. This plan may be suspended at anytime without prior notice.
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Fiscal Year Ended (1)
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||||||||||||||||||||
Statements of Operations Data
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June 26,
2011
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June 27, 2010
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June 28, 2009
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June 29, 2008
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July 1,
2007
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|||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||
Revenues
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$ | 1,176,577 | $ | 895,297 | $ | 740,419 | $ | 984,830 | $ | 1,202,469 | ||||||||||
Cost of sales
|
711,685 | 602,700 | 515,563 | 662,007 | 741,111 | |||||||||||||||
Gross profit
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464,892 | 292,597 | 224,856 | 322,823 | 461,358 | |||||||||||||||
Selling, general and administrative expense
|
193,748 | 169,190 | 262,068 | 287,830 | 212,541 | |||||||||||||||
Research and development expense
|
119,339 | 99,310 | 98,211 | 105,812 | 122,794 | |||||||||||||||
Impairment of goodwill
|
— | — | 23,867 | 32,624 | — | |||||||||||||||
Amortization of acquisition-related
intangible assets
|
6,768 | 4,375 | 4,408 | 4,656 | 1,889 | |||||||||||||||
Asset impairment, restructuring and other charges (recoveries)
|
(3,359 | ) | 289 | 56,493 | 3,080 | 10,398 | ||||||||||||||
Gain on divestiture
|
— | — | (96,136 | ) | — | — | ||||||||||||||
Operating income (loss)
|
148,396 | 19,433 | (124,055 | ) | (111,179 | ) | 113,736 | |||||||||||||
Other expense (income), net
|
718 | 2,019 | 39,717 | 19,423 | (6,257 | ) | ||||||||||||||
Interest income, net
|
(10,114 | ) | (11,221 | ) | (11,694 | ) | (29,093 | ) | (16,036 | ) | ||||||||||
Income (loss) from continuing operations before income taxes
|
157,792 | 28,635 | (152,078 | ) | (101,509 | ) | 136,029 | |||||||||||||
(Benefit from) provision for income taxes
|
(8,754 | ) | (52,192 | ) | 95,339 | (42,268 | ) | 62,889 | ||||||||||||
Income (loss) from continuing operations
|
$ | 166,546 | $ | 80,827 | $ | (247,417 | ) | $ | (59,241 | ) | $ | 73,140 | ||||||||
Net income (loss) per common share:
|
||||||||||||||||||||
Basic:
|
||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 2.35 | $ | 1.13 | $ | (3.42 | ) | $ | (0.81 | ) | $ | 1.01 | ||||||||
Diluted:
|
||||||||||||||||||||
Income (loss) from continuing operations
|
$ | 2.33 | $ | 1.13 | $ | (3.42 | ) | $ | (0.81 | ) | $ | 1.00 | ||||||||
Balance Sheet Data
|
||||||||||||||||||||
Total cash, cash equivalents, restricted cash and investments
|
$ | 499,668 | $ | 586,590 | $ | 604,441 | $ | 745,236 | $ | 1,317,528 | ||||||||||
Total assets
|
1,670,984 | 1,440,917 | 1,401,307 | 1,868,398 | 2,637,490 | |||||||||||||||
Long-term debt, less current maturities
|
— | — | — | — | — |
|
Notes:
|
1.
|
No dividends were paid by the Company during the five years presented.
|
·
|
Overview
|
·
|
Results of Operations
|
·
|
Liquidity and Capital Resources
|
·
|
Critical Accounting Polices and Estimates
|
·
|
Our revenues were $1,176.6 million, a 31.4 percent increase from the prior fiscal year.
|
·
|
Our gross margin was 39.5 percent, an increase of 6.8 percentage points from 32.7 percent in the prior fiscal year.
|
·
|
Our net income was $166.5 million, a 106.1 percent increase from the prior fiscal year.
|
·
|
Our diluted earnings per share was $2.33, an increase of $1.20 per share from the prior fiscal year.
|
·
|
We generated cash from operating activities of $161.9 million during fiscal year 2011 compared to cash from operating activities of $53.0 million in the prior fiscal year.
|
Fiscal Year Ended
|
||||||||||||||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||||||||||||||
Revenues
|
$ | 1,176.6 | 100.0 | % | $ | 895.3 | 100.0 | % | $ | 740.4 | 100.0 | % | ||||||||||||
Cost of sales
|
711.7 | 60.5 | 602.7 | 67.3 | 515.5 | 69.6 | ||||||||||||||||||
Gross profit
|
464.9 | 39.5 | 292.6 | 32.7 | 224.9 | 30.4 | ||||||||||||||||||
Selling, general and administrative expense
|
193.7 | 16.5 | 169.2 | 18.9 | 262.1 | 35.4 | ||||||||||||||||||
Research and development expense
|
119.3 | 10.1 | 99.3 | 11.1 | 98.2 | 13.3 | ||||||||||||||||||
Impairment of goodwill
|
— | — | — | — | 23.9 | 3.2 | ||||||||||||||||||
Amortization of acquisition-related intangible assets
|
6.8 | 0.6 | 4.4 | 0.5 | 4.4 | 0.6 | ||||||||||||||||||
Asset impairment, restructuring and other charges (recoveries)
|
(3.4 | ) | (0.3 | ) | 0.3 | — | 56.5 | 7.6 | ||||||||||||||||
Gain on divestiture
|
— | — | — | — | (96.1 | ) | (13.0 | ) | ||||||||||||||||
Operating income (loss)
|
148.4 | 12.6 | 19.4 | 2.2 | (124.1 | ) | (16.8 | ) | ||||||||||||||||
Other expense, net
|
0.7 | 0.1 | 2.0 | 0.2 | 39.7 | 5.4 | ||||||||||||||||||
Interest income, net
|
(10.1 | ) | (0.9 | ) | (11.2 | ) | (1.3 | ) | (11.7 | ) | (1.6 | ) | ||||||||||||
Income (loss) before income taxes
|
157.8 | 13.4 | 28.6 | 3.2 | (152.1 | ) | (20.5 | ) | ||||||||||||||||
(Benefit from) provision for income taxes
|
(8.7 | ) | (0.7 | ) | (52.2 | ) | (5.8 | ) | 95.3 | 12.9 | ||||||||||||||
Net income (loss)
|
$ | 166.5 | 14.2 | % | $ | 80.8 | 9.0 | % | $ | (247.4 | ) | (33.4 | )% |
Fiscal Years Ended
|
||||||||||||||||||||||||||||||||
June 26, 2011
|
June 27, 2010
|
Change
|
||||||||||||||||||||||||||||||
Revenues
|
Gross Margin
|
Gross Margin %
|
Revenues
|
Gross Margin
|
Gross Margin %
|
Revenues %
|
Gross Margin ppt
|
|||||||||||||||||||||||||
Power Management Devices (PMD)
|
$ | 456,764 | $ | 144,140 | 31.6 | % | $ | 345,610 | $ | 57,160 | 16.5 | % | 32.2 | % |
15.1 ppt
|
|||||||||||||||||
Energy Saving Products (ESP)
|
275,044 | 122,841 | 44.7 | 185,404 | 74,696 | 40.3 | 48.3 | 4.4 | ||||||||||||||||||||||||
Automotive Products (AP)
|
112,174 | 33,542 | 29.9 | 72,932 | 17,630 | 24.2 | 53.8 | 5.7 | ||||||||||||||||||||||||
Enterprise Power (EP)
|
134,627 | 59,425 | 44.1 | 128,691 | 54,450 | 42.3 | 4.6 | 1.8 | ||||||||||||||||||||||||
Commercial segments total
|
978,609 | 359,948 | 36.8 | 732,637 | 203,936 | 27.8 | 33.6 | 9.0 | ||||||||||||||||||||||||
HiRel
|
190,547 | 97,523 | 51.2 | 153,213 | 79,214 | 51.7 | 24.4 | (0.5 | ) | |||||||||||||||||||||||
Ongoing customer segments total
|
1,169,156 | 457,471 | 39.1 | 885,850 | 283,150 | 32.0 | 32.0 | 7.1 | ||||||||||||||||||||||||
Intellectual Property (IP)
|
7,421 | 7,421 | 100.0 | 9,447 | 9,447 | 100.0 | (21.4 | ) | — | |||||||||||||||||||||||
Consolidated total
|
$ | 1,176,577 | $ | 464,892 | 39.5 | % | $ | 895,297 | $ | 292,597 | 32.7 | % | 31.4 | % |
6.8ppt
|
Fiscal Years Ended
|
||||||||||||||||||||||||||||||||
June 27, 2010
|
June 28, 2009
|
Change
|
||||||||||||||||||||||||||||||
Revenues
|
Gross Margin
|
Gross Margin %
|
Revenues
|
Gross Margin
|
Gross Margin %
|
Revenues %
|
Gross Margin ppt
|
|||||||||||||||||||||||||
Power Management Devices (PMD)
|
$ | 345,610 | $ | 57,160 | 16.5 | % | $ | 233,737 | $ | 25,394 | 10.9 | % | 47.9 | % |
5.6ppt
|
|||||||||||||||||
Energy Saving Products (ESP)
|
185,404 | 74,696 | 40.3 | 151,090 | 55,430 | 36.7 | 22.7 | 3.6 | ||||||||||||||||||||||||
Automotive Products (AP)
|
72,932 | 17,630 | 24.2 | 54,061 | 11,621 | 21.5 | 34.9 | 2.7 | ||||||||||||||||||||||||
Enterprise Power (EP)
|
128,691 | 54,450 | 42.3 | 87,473 | 32,462 | 37.1 | 47.1 | 5.2 | ||||||||||||||||||||||||
Commercial segments total
|
732,637 | 203,936 | 27.8 | 526,361 | 124,907 | 23.7 | 39.2 | 4.1 | ||||||||||||||||||||||||
HiRel
|
153,213 | 79,214 | 51.7 | 148,266 | 76,601 | 51.7 | 3.3 | 0.0 | ||||||||||||||||||||||||
Ongoing customer segments total
|
885,850 | 283,150 | 32.0 | 674,627 | 201,508 | 29.9 | 31.3 | 2.1 | ||||||||||||||||||||||||
Intellectual Property (IP)
|
9,447 | 9,447 | 100.0 | 27,673 | 27,673 | 100.0 | (65.9 | ) | — | |||||||||||||||||||||||
Ongoing segments total
|
895,297 | 292,597 | 32.7 | 702,300 | 229,181 | 32.6 | 27.5 | 0.1 | ||||||||||||||||||||||||
Transition Services
|
— | — | — | 38,119 | (4,325 | ) | (11.3 | ) | (100.0 | ) | 11.3 | |||||||||||||||||||||
Consolidated total
|
$ | 895,297 | $ | 292,597 | 32.7 | % | $ | 740,419 | $ | 224,856 | 30.4 | % | 20.9 | % |
2.3ppt
|
(Dollar amounts in thousands)
|
Fiscal Year Ended
June 26, 2011
|
% of Revenues
|
Fiscal Year Ended
June 27, 2010
|
% of Revenues
|
Fiscal Year Ended
June 28, 2009
|
% of Revenues
|
% Revenues Change 2011 vs. 2010
|
% Revenues Change 2010 vs. 2009
|
|||||||||||||||||||
Selling, General and Administrative Expense
|
$ | 193,748 | 16.5 | % | $ | 169,190 | 18.9 | % | $ | 262,068 | 35.4 | % |
(2.4) ppt
|
(16.5) ppt
|
(Dollar amounts in thousands)
|
Fiscal Year Ended
June 26, 2011
|
% of Revenues
|
Fiscal Year Ended
June 27, 2010
|
% of Revenues
|
Fiscal Year Ended
June 28, 2009
|
% of Revenues
|
% Revenues Change 2011 vs. 2010
|
% Revenues Change 2010 vs. 2009
|
|||||||||||||||||||
Research and Development Expense
|
$ | 119,339 | 10.1 | % | $ | 99,310 | 11.1 | % | $ | 98,211 | 13.3 | % |
(1.0)ppt
|
(2.2) ppt
|
Fiscal Years Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Reported in asset impairment, restructuring and other charges
|
||||||||||||
(recoveries):
|
||||||||||||
Asset impairment
|
$ | — | $ | — | $ | 48,885 | ||||||
Severance and workforce reduction costs (recoveries)
|
(3,426 | ) | 194 | 6,648 | ||||||||
Other charges
|
67 | 95 | 960 | |||||||||
Total asset impairment, restructuring and other charges (recoveries)
|
$ | (3,359 | ) | $ | 289 | $ | 56,493 |
Newport, Wales
|
El Segundo
|
All Other (1)
|
||||||||||
Accrued severance and workforce reduction costs, June 29, 2008
|
$ | — | $ | — | $ | 1,091 | ||||||
Charged to asset impairment, restructuring and other charges
|
1,815 | 3,610 | 1,678 | |||||||||
Charged to operating expenses
|
— | 468 | 238 | |||||||||
Costs paid
|
(1,574 | ) | (504 | ) | (2,216 | ) | ||||||
Foreign exchange gains
|
118 | — | 1 | |||||||||
Change in provision
|
— | (39 | ) | (416 | ) | |||||||
Accrued severance and workforce reduction costs, June 28, 2009
|
359 | 3,535 | 376 | |||||||||
Charged to asset impairment, restructuring and other charges
|
— | 357 | — | |||||||||
Charged to operating expenses
|
— | 1,006 | 31 | |||||||||
Costs paid
|
(347 | ) | (2 | ) | (244 | ) | ||||||
Foreign exchange gains
|
(12 | ) | — | — | ||||||||
Change in provision
|
— | — | (163 | ) | ||||||||
Accrued severance and workforce reduction costs, June 27, 2010
|
— | 4,896 | — | |||||||||
Change in provision
|
— | (4,435 | ) | — | ||||||||
Accrued severance and workforce reduction costs, June 26, 2011
|
$ | — | $ | 461 | $ | — |
(1)
|
All Other includes accruals related to Research and Development Facility, the Divestiture, and Other Activities and Charges.
|
|
The following table summarizes the total asset impairment, restructuring and other charges (recoveries) by initiative for the fiscal years 2011, 2010 and 2009:
|
Newport, Wales
|
El Segundo
|
Research & Development Facility
|
Other Charges
|
Total
|
||||||||||||||||
Fiscal 2009 reported in asset impairment, restructuring and other charges:
|
||||||||||||||||||||
Asset impairment
|
$ | 48,885 | $ | — | $ | — | $ | — | $ | 48,885 | ||||||||||
Severance and workforce reduction costs
|
1,815 | 3,571 | 381 | 881 | 6,648 | |||||||||||||||
Other charges
|
33 | 654 | 273 | — | 960 | |||||||||||||||
Total fiscal 2009 asset impairment, restructuring and other charges
|
$ | 50,733 | $ | 4,225 | $ | 654 | $ | 881 | $ | 56,493 | ||||||||||
Fiscal 2010 reported in asset impairment, restructuring and other charges (recoveries):
|
||||||||||||||||||||
Severance and workforce reduction costs
|
$ | — | $ | 357 | $ | (47 | ) | $ | (116 | ) | $ | 194 | ||||||||
Other charges
|
— | — | 95 | — | 95 | |||||||||||||||
Fiscal 2010 total asset impairment, restructuring and other charges (recoveries)
|
$ | — | $ | 357 | $ | 48 | $ | (116 | ) | $ | 289 | |||||||||
Fiscal 2011 reported in asset impairment, restructuring and other charges (recoveries):
|
||||||||||||||||||||
Severance and workforce reduction costs (recoveries)
|
$ | — | $ | (3,426 | ) | $ | — | $ | — | $ | (3,426 | ) | ||||||||
Other charges
|
— | — | 67 | — | 67 | |||||||||||||||
Fiscal 2011 total asset impairment, restructuring and other charges (recoveries)
|
$ | — | $ | (3,426 | ) | $ | 67 | $ | — | $ | (3,359 | ) |
|
Payments Due by Period
|
|||||||||||||||||||||||||||
Contractual Obligations
|
Total
|
Less than
1 Year
|
1 - 2
Years
|
2 - 3
Years
|
3 - 4
Years
|
4 - 5
Years
|
5 Years &
Thereafter
|
|||||||||||||||||||||
Operating leases (1)
|
$ | 21,809 | $ | 9,398 | $ | 4,234 | $ | 2,848 | $ | 2,153 | $ | 1,128 | $ | 2,048 | ||||||||||||||
Purchase commitments:
|
||||||||||||||||||||||||||||
Capital purchase obligations
|
23,503 | 23,503 | — | — | — | — | — | |||||||||||||||||||||
Other purchase obligations
|
45,012 | 41,472 | 2,488 | 754 | 298 | — | — | |||||||||||||||||||||
Total contractual obligations
|
$ | 90,324 | $ | 74,373 | $ | 6,722 | $ | 3,602 | $ | 2,451 | $ | 1,128 | $ | 2,048 |
Amount of Commitment by Expiration Period
|
||||||||||||||||||||||||
Commercial commitments
|
Total
|
2012 | 2013 | 2014 | 2015 |
Thereafter
|
||||||||||||||||||
Bank guarantees and letters of credit (1)
|
$ | 1,632 | $ | 1,632 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Total bank guarantees and letters of credit
|
$ | 1,632 | $ | 1,632 | $ | — | $ | — | $ | — | $ | — |
(1)
|
These represent our off-balance sheet arrangements.
|
Fiscal Year Ended
|
||||||||
June 26, 2011
|
June 27, 2010
|
|||||||
Cash and cash equivalents
|
$ | 298,731 | $ | 229,789 | ||||
Investments
|
198,866 | 353,135 | ||||||
Total cash, cash equivalents, and investments
|
$ | 497,597 | $ | 582,924 |
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Cash flows provided by (used in) operating activities
|
$ | 161,889 | $ | 53,011 | $ | (41,211 | ) | |||||
Cash flows (used in) provided by investing activities
|
(74,645 | ) | (167,456 | ) | 109,608 | |||||||
Cash flows used in financing activities
|
(21,313 | ) | (19,995 | ) | (19,690 | ) | ||||||
Effect of exchange rates on cash and cash equivalents
|
3,011 | (1,532 | ) | (3,410 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
$ | 68,942 | $ | (135,972 | ) | $ | 45,297 |
June 26, 2011
|
June 27, 2010
|
Change
|
||||||||||
Current Assets
|
||||||||||||
Cash and cash equivalents
|
$ | 298,731 | $ | 229,789 | $ | 68,942 | ||||||
Restricted cash
|
439 | 1,913 | (1,474 | ) | ||||||||
Short-term investments
|
185,541 | 309,384 | (123,843 | ) | ||||||||
Trade accounts receivable, net
|
196,153 | 156,753 | 39,400 | |||||||||
Inventories
|
250,174 | 170,168 | 80,006 | |||||||||
Current deferred tax assets
|
1,950 | 2,085 | (135 | ) | ||||||||
Prepaid expenses and other receivables
|
33,943 | 40,243 | (6,300 | ) | ||||||||
Total current assets
|
$ | 966,931 | $ | 910,335 | $ | 56,596 | ||||||
Current Liabilities
|
||||||||||||
Accounts payable
|
$ | 123,922 | $ | 94,646 | $ | 29,276 | ||||||
Accrued income taxes
|
6,850 | 5,764 | 1,086 | |||||||||
Accrued salaries, wages and commissions
|
45,552 | 32,279 | 13,273 | |||||||||
Current deferred tax liabilities
|
2 | 1,686 | (1,684 | ) | ||||||||
Other accrued expenses
|
97,402 | 75,259 | 22,143 | |||||||||
Total current liabilities
|
273,728 | 209,634 | 64,094 | |||||||||
Net working capital
|
$ | 693,203 | $ | 700,701 | $ | (7,498 | ) |
|
•
|
Level 1—Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date. Our financial assets valued using Level 1 inputs include money market funds, treasury bonds, and marketable equity securities that are valued using quoted market prices.
|
|
•
|
Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Our financial assets and liabilities valued using Level 2 inputs include agency bonds, corporate debt securities and foreign currency hedges, whose fair values are determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
|
|
•
|
Level 3—Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation. Our financial assets valued using Level 3 inputs include asset-backed securities, a put option on a strategic investment and a liability for an acquisition-related contingent consideration arrangement.
|
§
|
Significant changes in the manner of use of acquired assets or the strategy for our overall business,
|
§
|
Significant negative industry or economic trends, and
|
§
|
Significant technological changes which may render the asset obsolete.
|
Page
|
|
Supporting Financial Statement Schedule:
|
Schedule No.
|
Page
|
||||
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Revenues
|
$ | 1,176,577 | $ | 895,297 | $ | 740,419 | ||||||
Cost of sales
|
711,685 | 602,700 | 515,563 | |||||||||
Gross profit
|
464,892 | 292,597 | 224,856 | |||||||||
Selling, general and administrative expense
|
193,748 | 169,190 | 262,068 | |||||||||
Research and development expense
|
119,339 | 99,310 | 98,211 | |||||||||
Impairment of goodwill
|
— | — | 23,867 | |||||||||
Amortization of acquisition-related intangible assets
|
6,768 | 4,375 | 4,408 | |||||||||
Asset impairment, restructuring and other charges (recoveries)
|
(3,359 | ) | 289 | 56,493 | ||||||||
Gain on divestiture
|
— | — | (96,136 | ) | ||||||||
Operating income (loss)
|
148,396 | 19,433 | (124,055 | ) | ||||||||
Other expense, net
|
718 | 2,019 | 39,717 | |||||||||
Interest income, net
|
(10,114 | ) | (11,221 | ) | (11,694 | ) | ||||||
Income (loss) before income taxes
|
157,792 | 28,635 | (152,078 | ) | ||||||||
(Benefit from) provision for income taxes
|
(8,754 | ) | (52,192 | ) | 95,339 | |||||||
Net income (loss)
|
$ | 166,546 | $ | 80,827 | $ | (247,417 | ) | |||||
Net income (loss) per common share:
|
||||||||||||
Basic:
|
||||||||||||
Net income (loss) per common share
|
$ | 2.35 | $ | 1.13 | $ | (3.42 | ) | |||||
Diluted:
|
||||||||||||
Net income (loss) per common share
|
$ | 2.33 | $ | 1.13 | $ | (3.42 | ) | |||||
Average common shares outstanding—basic
|
69,858 | 70,958 | 72,295 | |||||||||
Average common shares and potentially dilutive securities outstanding—diluted
|
70,523 | 71,248 | 72,295 |
June 26, 2011
|
June 27, 2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 298,731 | $ | 229,789 | ||||
Restricted cash
|
439 | 1,913 | ||||||
Short-term investments
|
185,541 | 309,384 | ||||||
Trade accounts receivable, net of allowances of $2,424 for 2011 and $3,725 for 2010
|
196,153 | 156,753 | ||||||
Inventories
|
250,174 | 170,168 | ||||||
Current deferred tax assets
|
1,950 | 2,085 | ||||||
Prepaid expenses and other receivables
|
33,943 | 40,243 | ||||||
Total current assets
|
966,931 | 910,335 | ||||||
Restricted cash
|
1,632 | 1,753 | ||||||
Long-term investments
|
13,325 | 43,751 | ||||||
Property, plant and equipment, at cost, net
|
444,759 | 347,745 | ||||||
Goodwill
|
121,570 | 74,955 | ||||||
Acquisition-related intangible assets, net
|
36,945 | 7,446 | ||||||
Long-term deferred tax assets
|
23,403 | 7,738 | ||||||
Other assets
|
62,419 | 47,194 | ||||||
Total assets
|
$ | 1,670,984 | $ | 1,440,917 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 123,922 | $ | 94,646 | ||||
Accrued income taxes
|
6,850 | 5,764 | ||||||
Accrued salaries, wages and commissions
|
45,552 | 32,279 | ||||||
Current deferred tax liabilities
|
2 | 1,686 | ||||||
Other accrued expenses
|
97,402 | 75,259 | ||||||
Total current liabilities
|
273,728 | 209,634 | ||||||
Long-term deferred tax liabilities
|
3,845 | 5,334 | ||||||
Other long-term liabilities
|
35,499 | 34,504 | ||||||
Total liabilities
|
313,072 | 249,472 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common shares, $1 par value, authorized: 330,000,000; outstanding: 69,899,825 shares in 2011 and 70,324,178 shares in 2010
|
74,527 | 73,518 | ||||||
Preferred shares, $1 par value, authorized: 1,000,000; issued and outstanding: none in 2011 and 2010
|
— | — | ||||||
Capital contributed in excess of par value
|
1,021,509 | 997,637 | ||||||
Treasury stock, at cost; 4,627,248 shares in 2011 and 3,193,930 shares in 2010
|
(81,245 | ) | (48,671 | ) | ||||
Retained earnings
|
345,735 | 179,189 | ||||||
Accumulated other comprehensive loss
|
(2,614 | ) | (10,228 | ) | ||||
Total stockholders’ equity
|
1,357,912 | 1,191,445 | ||||||
Total liabilities and stockholders’ equity
|
$ | 1,670,984 | $ | 1,440,917 |
Common Shares, at Par Value
|
Capital Contributed in Excess of Par Value
|
Treasury Stock, at Cost
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Comprehensive Income (Loss)
|
Total
|
||||||||||||||||||||||
Balance, June 29, 2008
|
$ | 72,826 | $ | 971,920 | $ | — | $ | 345,779 | $ | 53,912 | $ | 1,444,437 | ||||||||||||||||
Net loss for the year ended June 28, 2009
|
— | — | — | (247,417 | ) | — | $ | (247,417 | ) | (247,417 | ) | |||||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | (64,436 | ) | — | ||||||||||||||||||||
Net unrealized gains (losses) on available-for-sale securities, net of deferred tax provision of $3,013
|
— | — | — | — | 14,221 | — | ||||||||||||||||||||||
Reclassification adjustments of gain on available-for-sale securities and foreign currency forward contract, net of tax provision of $0
|
— | — | — | — | — | 1,938 | — | |||||||||||||||||||||
Other comprehensive loss
|
— | — | — | — | (48,277 | ) | (48,277 | ) | (48,277 | ) | ||||||||||||||||||
Comprehensive loss
|
— | — | — | — | — | (295,694 | ) | — | ||||||||||||||||||||
Issuance of common shares:
|
||||||||||||||||||||||||||||
Exercise of stock options and vesting of RSU’s—274,633 shares
|
275 | 2,247 | — | — | — | 2,522 | ||||||||||||||||||||||
Repurchase of common stock-1,909,649 shares
|
— | — | (23,632 | ) | — | — | (23,632 | ) | ||||||||||||||||||||
Tax charge from exercise of stock options
|
— | (340 | ) | — | — | — | (340 | ) | ||||||||||||||||||||
Stock-based compensation expense
|
— | 7,959 | — | — | — | 7,959 | ||||||||||||||||||||||
Balance, June 28, 2009
|
73,101 | 981,786 | (23,632 | ) | 98,362 | 5,635 | 1,135,252 | |||||||||||||||||||||
Net income for the year ended June 27, 2010
|
— | — | — | 80,827 | — | 80,827 | 80,827 | |||||||||||||||||||||
Other comprehensive loss:
|
||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | (15,043 | ) | — | ||||||||||||||||||||
Net unrealized gains (losses) on available-for-sale securities, net of deferred tax provision of $1,772
|
— | — | — | — | — | 745 | — | |||||||||||||||||||||
Reclassification adjustments of gain on available-for-sale securities and foreign currency forward contract, net of tax provision of $0
|
— | — | — | — | — | (1,565 | ) | — | ||||||||||||||||||||
Other comprehensive loss
|
— | — | — | — | (15,863 | ) | (15,863 | ) | (15,863 | ) | ||||||||||||||||||
Comprehensive income
|
— | — | — | — | — | $ | 64,964 | — | ||||||||||||||||||||
Issuance of common shares:
|
||||||||||||||||||||||||||||
Exercise of stock options and vesting of RSU’s—416,617 shares
|
417 | 4,432 | — | — | — | 4,849 | ||||||||||||||||||||||
Repurchase of common stock-1,284,281 shares
|
— | — | (25,039 | ) | — | — | (25,039 | ) | ||||||||||||||||||||
Tax charge from exercise of stock options
|
— | — | — | — | — | — | ||||||||||||||||||||||
Stock-based compensation expense
|
— | 11,419 | — | — | — | 11,419 | ||||||||||||||||||||||
Balance, June 27, 2010
|
$ | 73,518 | $ | 997,637 | $ | (48,671 | ) | $ | 179,189 | $ | (10,228 | ) | $ | 1,191,445 |
Common Shares, at Par Value
|
Capital Contributed in Excess of Par Value of Shares
|
Treasury Stock, at Cost
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
Comprehensive Income (Loss)
|
Total
|
||||||||||||||||||||||
Balance, June 27, 2010
|
$ | 73,518 | $ | 997,637 | $ | (48,671 | ) | $ | 179,189 | $ | (10,228 | ) | $ | 1,191,445 | ||||||||||||||
Net income for the year ended June 26, 2011
|
— | — | — | 166,546 | — | $ | 166,546 | 166,546 | ||||||||||||||||||||
Other comprehensive income:
|
||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | — | 7,776 | — | |||||||||||||||||||||
Net unrealized gains (losses) on available-for-sale securities, net of deferred tax benefit of $149
|
— | — | — | — | — | (162 | ) | — | ||||||||||||||||||||
Other comprehensive income
|
— | — | — | — | 7,614 | 7,614 | 7,614 | |||||||||||||||||||||
Comprehensive income
|
— | — | — | — | — | $ | 174,160 | — | ||||||||||||||||||||
Issuance of common shares:
|
||||||||||||||||||||||||||||
Exercise of stock options and vesting of RSU’s—1,009,415 shares
|
1,009 | 6,852 | — | — | — | 7,861 | ||||||||||||||||||||||
Repurchase of common stock-1,433,318 shares
|
— | — | (32,574 | ) | — | — | (32,574 | ) | ||||||||||||||||||||
Tax benefit from stock-based awards
|
— | 1,406 | — | — | — | 1,406 | ||||||||||||||||||||||
Stock-based compensation expense
|
— | 15,614 | — | — | — | 15,614 | ||||||||||||||||||||||
Balance, June 26, 2011
|
$ | 74,527 | $ | 1,021,509 | $ | (81,245 | ) | $ | 345,735 | $ | (2,614 | ) | $ | 1,357,912 |
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$ | 166,546 | $ | 80,827 | $ | (247,417 | ) | |||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
77,137 | 70,686 | 64,003 | |||||||||
Amortization of acquisition-related intangible assets
|
6,768 | 4,375 | 4,408 | |||||||||
(Gain) loss on disposal of fixed assets
|
(250 | ) | 559 | — | ||||||||
Stock compensation expense
|
15,614 | 11,419 | 7,405 | |||||||||
Goodwill impairment
|
— | — | 23,867 | |||||||||
(Gain) loss on sale of investments
|
(7,985 | ) | (6,485 | ) | 3,411 | |||||||
Other-than-temporary impairment of investments
|
1,433 | 3,349 | 39,239 | |||||||||
Provision for (recovery of) bad debts
|
(2,117 | ) | (2,168 | ) | 131 | |||||||
Provision for (recovery of) inventory write-downs
|
9,129 | (2,997 | ) | 10,727 | ||||||||
Asset impairment
|
— | — | 51,709 | |||||||||
Loss (gain) on derivatives
|
3,872 | (3,427 | ) | (1,220 | ) | |||||||
Divestiture gain
|
— | — | (96,136 | ) | ||||||||
Deferred income taxes
|
(19,693 | ) | (5,885 | ) | 104,101 | |||||||
Tax benefit from stock-based awards
|
1,406 | — | 340 | |||||||||
Excess tax benefit from stock-based awards
|
(3,400 | ) | (197 | ) | (3 | ) | ||||||
Changes in operating assets and liabilities, net
|
(80,735 | ) | (100,734 | ) | (5,286 | ) | ||||||
Other
|
(5,836 | ) | 3,689 | (490 | ) | |||||||
Net cash provided by (used in) operating activities
|
161,889 | 53,011 | (41,211 | ) | ||||||||
Cash flows from investing activities:
|
||||||||||||
Additions to property, plant and equipment
|
(146,345 | ) | (58,071 | ) | (20,793 | ) | ||||||
Proceeds from sale of property, plant and equipment
|
800 | 535 | 576 | |||||||||
Business acquisitions
|
(75,668 | ) | — | — | ||||||||
Acquisitions of intellectual property
|
(7,500 | ) | — | — | ||||||||
Cash conveyed as part of Divestiture
|
— | — | (30,000 | ) | ||||||||
Withdrawals from deferred compensation plan
|
— | 2,443 | — | |||||||||
Sale of investments
|
128,210 | 146,667 | 317,591 | |||||||||
Maturities of investments
|
331,594 | 146,060 | 117,555 | |||||||||
Purchase of investments
|
(305,481 | ) | (407,399 | ) | (289,333 | ) | ||||||
Redemption of equity investment
|
— | 2,050 | — | |||||||||
Released from restricted cash
|
1,595 | 259 | 14,012 | |||||||||
Purchase of cost-based investments
|
(1,850 | ) | — | — | ||||||||
Net cash (used in) provided by investing activities
|
(74,645 | ) | (167,456 | ) | 109,608 | |||||||
Cash flows from financing activities:
|
||||||||||||
Decrease in restricted cash
|
— | — | 1,416 | |||||||||
Proceeds from exercise of stock options
|
11,412 | 5,629 | 3,023 | |||||||||
Excess tax benefit from stock-based awards
|
3,400 | 197 | 3 | |||||||||
Purchase of treasury stock
|
(32,574 | ) | (25,039 | ) | (23,632 | ) | ||||||
Net settlement of restricted stock units for tax withholdings
|
(3,551 | ) | (782 | ) | (500 | ) | ||||||
Net cash used in financing activities
|
(21,313 | ) | (19,995 | ) | (19,690 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents
|
3,011 | (1,532 | ) | (3,410 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
68,942 | (135,972 | ) | 45,297 | ||||||||
Cash and cash equivalents, beginning of year
|
229,789 | 365,761 | 320,464 | |||||||||
Cash and cash equivalents, end of year
|
$ | 298,731 | $ | 229,789 | $ | 365,761 |
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Interest income
|
$ | (10,679 | ) | $ | (11,748 | ) | $ | (13,033 | ) | |||
Interest expense
|
565 | 527 | 1,339 | |||||||||
Interest income, net
|
$ | (10,114 | ) | $ | (11,221 | ) | $ | (11,694 | ) |
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Trade accounts receivable
|
$ | (31,475 | ) | $ | (59,013 | ) | $ | 4,112 | ||||
Inventories
|
(86,517 | ) | (18,259 | ) | 11,785 | |||||||
Prepaid expenses and other receivables
|
(518 | ) | (949 | ) | 12,860 | |||||||
Accounts payable
|
19,714 | 30,486 | (15,078 | ) | ||||||||
Accrued salaries, wages and commissions
|
12,788 | 10,393 | (9,927 | ) | ||||||||
Deferred compensation
|
1,335 | 403 | (1,117 | ) | ||||||||
Accrued income taxes
|
(2,042 | ) | (26,378 | ) | (21,638 | ) | ||||||
Other accrued expenses
|
5,980 | (37,417 | ) | 13,717 | ||||||||
Changes in operating assets and liabilities
|
$ | (80,735 | ) | $ | (100,734 | ) | $ | (5,286 | ) |
Fiscal Year Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Cash paid (received) during the year for:
|
||||||||||||
Interest
|
$ | 562 | $ | 541 | $ | 725 | ||||||
Income taxes
|
6,897 | (20,172 | ) | 7,791 | ||||||||
Non-cash investing activities:
|
||||||||||||
Increase (decrease) in liabilities accrued for property, plant and equipment purchases
|
$ | 16,054 | 2,320 | 1,059 |
·
|
Level 1—Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.
|
·
|
Level 2—Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
|
·
|
Level 3—Inputs include management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument's valuation.
|
Assets and Liabilities:
|
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Cash and cash equivalents
|
$ | 15,996 | $ | — | $ | 15,996 | $ | — | ||||||||
Short-term investments
|
185,541 | 70,292 | 115,249 | — | ||||||||||||
Long-term investments
|
13,325 | 9,530 | 3,014 | 781 | ||||||||||||
Other assets
|
33,004 | 30,231 | — | 2,773 | ||||||||||||
Other accrued expenses
|
(309 | ) | — | (309 | ) | — | ||||||||||
Other long-term liabilities
|
(8,038 | ) | (7,638 | ) | — | (400 | ) | |||||||||
Total
|
$ | 239,519 | $ | 102,415 | $ | 133,950 | $ | 3,154 | ||||||||
Fair value as a percentage of total
|
100.0 | % | 42.8 | % | 55.9 | % | 1.3 | % | ||||||||
Level 3 as a percentage of total assets
|
0.2 | % |
Assets and Liabilities:
|
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
Cash and cash equivalents
|
$ | 27,113 | $ | — | $ | 27,113 | $ | — | ||||||||
Short-term investments
|
309,384 | 226,390 | 82,994 | — | ||||||||||||
Long-term investments
|
43,751 | 6,600 | 13,818 | 23,333 | ||||||||||||
Prepaid expenses and other receivables
|
226 | — | 226 | — | ||||||||||||
Other assets
|
27,487 | 25,508 | (146 | ) | 2,125 | |||||||||||
Other long-term liabilities
|
(6,022 | ) | (6,022 | ) | — | — | ||||||||||
Total
|
$ | 401,939 | $ | 252,476 | $ | 124,005 | $ | 25,458 | ||||||||
Fair value as a percentage of total
|
100.0 | % | 62.8 | % | 30.9 | % | 6.3 | % | ||||||||
Level 3 as a percentage of total assets
|
1.8 | % |
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
|
||||||||||||||||
Liabilities
|
Assets
|
|||||||||||||||
Contingent Consideration
|
Derivatives
|
Investments
|
Total
|
|||||||||||||
Beginning balance at June 27, 2010
|
$ | ― | $ | 2,121 | $ | 23,337 | $ | 25,458 | ||||||||
Total gains or (losses) (realized or unrealized):
|
||||||||||||||||
Included in earnings
|
― | 652 | 7,949 | 8,601 | ||||||||||||
Included in other comprehensive income
|
― | — | (5,026 | ) | (5,026 | ) | ||||||||||
Purchases, maturities, and sales:
|
||||||||||||||||
Purchases/additions
|
400 | ― | 1,500 | 1,500 | ||||||||||||
Maturities/prepayments
|
― | ― | (3,737 | ) | (3,737 | ) | ||||||||||
Sales
|
― | ― | (21,738 | ) | (21,738 | ) | ||||||||||
Transfers into level 3
|
― | ― | ― | ― | ||||||||||||
Transfers out of level 3
|
— | — | (1,504 | ) | (1,504 | ) | ||||||||||
Ending balance at June 26, 2011
|
$ | 400 | $ | 2,773 | $ | 781 | $ | 3,554 |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
|
||||||||||||
Derivatives
|
Investments
|
Total
|
||||||||||
Beginning balance at June 28, 2009
|
$ | — | $ | 40,834 | $ | 40,834 | ||||||
Total gains or losses (realized or unrealized):
|
||||||||||||
Included in earnings
|
— | 5,084 | 5,084 | |||||||||
Included in other comprehensive income
|
— | 2,351 | 2,351 | |||||||||
Purchases, issuance, and settlements:
|
||||||||||||
Purchases/additions
|
2,121 | — | 2,121 | |||||||||
Maturities
|
— | — | — | |||||||||
Sales
|
— | (24,932 | ) | (24,932 | ) | |||||||
Transfers into Level 3
|
— | — | — | |||||||||
Transfers out of level 3
|
— | — | — | |||||||||
Ending balance at June 27, 2010
|
$ | 2,121 | $ | 23,337 | $ | 25,458 |
June 26, 2011
|
June 27, 2010
|
|||||||
Cash and cash equivalents
|
$ | 298,731 | $ | 229,789 | ||||
Short-term investments
|
185,541 | 309,384 | ||||||
Restricted cash
|
2,071 | 3,666 | ||||||
Long-term investments
|
13,325 | 43,751 | ||||||
Total cash, restricted cash, cash equivalents and investments
|
$ | 499,668 | $ | 586,590 |
June 26, 2011
|
June 27, 2010
|
||||||||
Raw materials
|
$ | 63,298 | $ | 40,805 | |||||
Work-in-process
|
110,956 | 77,233 | |||||||
Finished goods
|
75,920 | 52,130 | |||||||
Total inventories
|
$ | 250,174 | $ | 170,168 |
June 26, 2011
|
June 27, 2010
|
Range of Useful Life
|
||||||||||
Building and improvements
|
$ | 176,838 | $ | 177,713 | 3 - 40 | |||||||
Equipment
|
1,039,097 | 937,548 | 3 - 15 | |||||||||
Less: accumulated depreciation and amortization
|
(887,798 | ) | (817,397 | ) | ||||||||
328,137 | 297,864 | |||||||||||
Land
|
15,894 | 15,679 | ||||||||||
Construction-in-progress
|
100,728 | 34,202 | ||||||||||
Total property, plant and equipment
|
$ | 444,759 | $ | 347,745 |
|
•
|
A significant change in business strategy or in the extent or manner for which the asset is being used or in its physical condition;
|
|
•
|
A significant negative change in the business climate, industry conditions, economic conditions or market value of an asset; and
|
|
•
|
Current period operating losses or negative cash flow combined with a history of similar losses or a forecast that indicates continuing losses associated with the use of an asset.
|
Amortization
|
June 26, 2011
|
|||||||||||||||
Periods
(Years)
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net
|
|||||||||||||
Completed technology
|
4 - 12 | $ | 52,045 | $ | (28,560 | ) | $ | 23,485 | ||||||||
Customer lists
|
5 - 12 | 10,430 | (5,455 | ) | 4,975 | |||||||||||
Intellectual property and other
|
2 - 15 | 16,763 | (8,278 | ) | 8,485 | |||||||||||
Total acquisition-related intangible assets
|
$ | 79,238 | $ | (42,293 | ) | $ | 36,945 | |||||||||
Amortization
|
June 27, 2010
|
|||||||||||||||
Periods
(Years)
|
Gross Carrying
Amount
|
Accumulated
Amortization
|
Net
|
|||||||||||||
Completed technology
|
4 - 12 | $ | 29,679 | $ | (23,379 | ) | $ | 6,300 | ||||||||
Customer lists
|
5 - 12 | 5,330 | (4,858 | ) | 472 | |||||||||||
Intellectual property and other
|
5 - 15 | 7,963 | (7,289 | ) | 674 | |||||||||||
Total acquisition-related intangible assets
|
$ | 42,972 | $ | (35,526 | ) | $ | 7,446 |
Fiscal Year
|
Estimated Amortization Expense
|
|||
2012
|
$ | 8,308 | ||
2013
|
6,708 | |||
2014
|
6,420 | |||
2015
|
6,220 | |||
2016
|
4,681 | |||
2017 and thereafter
|
4,608 | |||
Total
|
$ | 36,945 |
Business Segments:
|
June 26,
2011
|
June 27,
2010
|
||||||
Power Management Devices
|
$ | — | $ | — | ||||
Energy Saving Products
|
33,190 | 33,190 | ||||||
HiRel
|
18,959 | 18,959 | ||||||
Enterprise Power
|
69,421 | 22,806 | ||||||
Automotive Products
|
— | — | ||||||
Intellectual Property
|
— | — | ||||||
Total goodwill
|
$ | 121,570 | $ | 74,955 |
Balance, June 28, 2009
|
$ | 74,955 | ||
Impairment
|
— | |||
Balance, June 27, 2010
|
74,955 | |||
Additions due to acquisitions
|
46,615 | |||
Balance, June 26, 2011
|
$ | 121,570 |
June 26, 2011
|
June 27, 2010
|
|||||||
Sales returns
|
$ | 34,112 | $ | 27,306 | ||||
Accrued accounting and legal costs
|
9,943 | 10,855 | ||||||
Deferred revenue
|
16,329 | 10,200 | ||||||
Accrued employee benefits
|
3,733 | 3,422 | ||||||
Accrued divestiture liability
|
— | 295 | ||||||
Accrued warranty
|
3,457 | 2,293 | ||||||
Accrued utilities
|
1,840 | 1,483 | ||||||
Accrued repurchase obligation
|
3,099 | 3,518 | ||||||
Accrued sales and other taxes
|
2,829 | 2,329 | ||||||
Accrued enterprise resource planning system costs
|
8,110 | 176 | ||||||
Severance liability
|
214 | 4,249 | ||||||
Other
|
13,736 | 9,133 | ||||||
Total other accrued expenses
|
$ | 97,402 | $ | 75,259 |
Accrued warranty, June 29, 2008
|
$ | 2,672 | ||
Accruals for warranties issued during the year
|
3,574 | |||
Changes in estimates related to pre-existing warranties
|
1,024 | |||
Warranty claim settlements
|
(5,503 | ) | ||
Accrued warranty, June 28, 2009
|
1,767 | |||
Accruals for warranties issued during the year
|
4,000 | |||
Changes in estimates related to pre-existing warranties
|
(1,324 | ) | ||
Warranty claim settlements
|
(2,150 | ) | ||
Accrued warranty, June 27, 2010
|
2,293 | |||
Accruals for warranties issued during the year
|
5,005 | |||
Changes in estimates related to pre-existing warranties
|
(1,228 | ) | ||
Warranty claim settlements
|
(2,613 | ) | ||
Accrued warranty, June 26, 2011
|
$ | 3,457 |
June 26, 2011
|
June 27, 2010
|
|||||||
Income taxes payable
|
$ | 17,092 | $ | 18,825 | ||||
Divested entities’ tax obligations
|
3,985 | 5,523 | ||||||
Deferred compensation
|
9,324 | 7,357 | ||||||
Other
|
5,098 | 2,799 | ||||||
Total other long-term liabilities
|
$ | 35,499 | $ | 34,504 |
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Foreign currency translation adjustments
|
$ | (7,904 | ) | $ | (15,680 | ) | (637 | ) | ||||
Net unrealized gains on foreign currency forward contracts
|
— | — | 1,565 | |||||||||
Net unrealized gains on available-for-sale securities
|
5,290 | 5,452 | 4,707 | |||||||||
Accumulated other comprehensive (loss) income
|
$ | (2,614 | ) | $ | (10,228 | ) | $ | 5,635 |
Estimated
Fair Value
|
||||
Fair value of consideration transferred:
|
||||
Cash consideration to CHiL shareholders, net of cash acquired
|
$ | 73,168 | ||
Allocation of consideration:
|
||||
Inventory valuation adjustment
|
$ | 100 | ||
Property, plant, and equipment
|
207 | |||
Deferred tax asset
|
10,016 | |||
In-process research and development
|
100 | |||
Intangible assets
|
25,900 | |||
Goodwill
|
46,615 | |||
Net working capital
|
445 | |||
Deferred tax liability
|
(10,055 | ) | ||
Taxes payable
|
(160 | ) | ||
Total purchase price
|
$ | 73,168 | ||
Asset Amount
|
Weighted Average Useful Life
|
||||
Completed technology
|
$ | 19,500 |
5 years
|
||
Customer lists
|
5,100 |
6 years
|
|||
Other intangible assets
|
1,300 |
3 years
|
|||
Total acquisition-related intangible assets
|
$ | 25,900 |
Estimated
Fair Value
|
||||
Fair value of consideration transferred:
|
||||
Cash consideration to the Technology Acquisition shareholders
|
$ | 2,500 | ||
Contingent consideration
|
400 | |||
Total consideration transferred
|
$ | 2,900 | ||
Allocation of consideration:
|
||||
Intangible assets
|
$ | 2,867 | ||
Long-term deferred tax asset
|
150 | |||
Other assets
|
33 | |||
Long-term deferred tax liability
|
(150 | ) | ||
Net assets acquired
|
$ | 2,900 | ||
Twelve Months Ended
|
||||||||||
June 26, 2011
|
June 27, 2010
|
|||||||||
Combined revenues
|
$ | 1,180,250 | $ | 896,411 | ||||||
Combined net income
|
155,085 | 62,860 | ||||||||
Net income per share-basic
|
$ | 2.19 | $ | 0.88 | ||||||
Net income per share-diluted
|
$ | 2.17 | $ | 0.88 |
Amortized Costs
|
Gross Unrealized Gain
|
Gross Unrealized Loss
|
Net Unrealized Gain
|
Market Value
|
||||||||||||||||
Short-Term Investments:
|
||||||||||||||||||||
Corporate debt
|
$ | 55,964 | $ | 51 | $ | — | $ | 51 | $ | 56,015 | ||||||||||
U.S. government and agency obligations
|
129,352 | $ | 174 | — | 174 | 129,526 | ||||||||||||||
Total short-term investments
|
$ | 185,316 | $ | 225 | $ | — | $ | 225 | $ | 185,541 | ||||||||||
Long-Term Investments:
|
||||||||||||||||||||
U.S. government and agency obligations
|
$ | 12,501 | $ | 43 | $ | — | $ | 43 | $ | 12,544 | ||||||||||
Asset-backed securities
|
594 | 187 | — | 187 | 781 | |||||||||||||||
Total long-term investments
|
$ | 13,095 | $ | 230 | $ | — | $ | 230 | $ | 13,325 | ||||||||||
Equity securities
|
$ | 12,963 | $ | 9,473 | $ | — | $ | 9,473 | $ | 22,436 |
Amortized Costs
|
Gross Unrealized Gain
|
Gross Unrealized Loss
|
Net Unrealized Gain
|
Market Value
|
||||||||||||||||
Short-Term Investments:
|
||||||||||||||||||||
U.S. government and agency obligations
|
$ | 308,469 | $ | 919 | $ | (4 | ) | $ | 915 | $ | 309,384 | |||||||||
Total short-term investments
|
$ | 308,469 | $ | 919 | $ | (4 | ) | $ | 915 | $ | 309,384 | |||||||||
Long-Term Investments:
|
||||||||||||||||||||
U.S. government and agency obligations
|
$ | 20,043 | $ | 378 | $ | (3 | ) | $ | 375 | $ | 20,418 | |||||||||
Mortgage-backed securities
|
9,089 | 2,689 | — | 2,689 | 11,778 | |||||||||||||||
Asset-backed securities
|
9,030 | 2,529 | (4 | ) | 2,525 | 11,555 | ||||||||||||||
Total long-term investments
|
$ | 38,162 | $ | 5,596 | $ | (7 | ) | $ | 5,589 | $ | 43,751 | |||||||||
Equity securities
|
$ | 14,397 | $ | 3,791 | $ | — | $ | 3,791 | $ | 18,188 |
Securities held
in a loss position
for less than
12 months at
June 27, 2010
|
Securities held
in a loss position
for 12 months
or more at
June 27, 2010
|
Total in a loss position
at June 27, 2010
|
||||||||||||||||||||||
Market
Value
|
Gross
Unrealized
Losses
|
Market
Value
|
Gross
Unrealized
Losses
|
Market
Value
|
Gross
Unrealized
Losses
|
|||||||||||||||||||
U.S. government and agency obligations
|
$ | 27,245 | $ | (7 | ) | $ | — | $ | — | $ | 27,245 | $ | (7 | ) | ||||||||||
Total
|
$ | 27,245 | $ | (7 | ) | $ | — | $ | — | $ | 27,245 | $ | (7 | ) |
Contractual Maturity (1)
|
Amortized
Cost
|
Estimated
Market Value
|
||||||
Due in 1 year or less
|
$ | 185,316 | $ | 185,541 | ||||
Due in 1-2 years
|
12,501 | 12,544 | ||||||
Due in 2-5 years
|
— | — | ||||||
Due after 5 years
|
594 | 781 | ||||||
Total investments
|
$ | 198,411 | $ | 198,866 |
|
(1)
|
Contractual maturity for asset-backed securities was based on initial contractual maturity dates.
|
As of June 26, 2011
|
||||||||||||||||
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
Corporate debt
|
$ | 56,015 | $ | — | $ | 56,015 | $ | — | ||||||||
U.S. government and agency obligations
|
142,070 | 79,822 | 62,248 | — | ||||||||||||
Asset-backed securities
|
781 | — | — | 781 | ||||||||||||
Equity securities-strategic investments
|
22,436 | 22,436 | — | — | ||||||||||||
Total securities at fair value
|
$ | 221,302 | $ | 102,258 | $ | 118,263 | $ | 781 |
As of June 27, 2010
|
||||||||||||||||
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
U.S. government and agency obligations
|
$ | 329,802 | $ | 233,049 | $ | 96,753 | $ | — | ||||||||
Mortgage-backed securities
|
11,778 | — | — | 11,778 | ||||||||||||
Asset-backed securities
|
11,555 | — | — | 11,555 | ||||||||||||
Equity securities-strategic investments
|
18,188 | 18,184 | — | 4 | ||||||||||||
Total securities at fair value
|
$ | 371,323 | $ | 251,233 | $ | 96,753 | $ | 23,337 |
Derivative Assets June 26, 2011
|
Derivative Liabilities June 26, 2011
|
||||||||||
Derivatives Not Designated as Hedging Instruments
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
Put option
|
Other assets
|
$ | 2,773 | ||||||||
Currency forward contracts
|
Other accrued expenses
|
$ | 309 | ||||||||
Total
|
$ | 2,773 | $ | 309 |
Derivative Assets June 27, 2010
|
Derivative Liabilities June 27, 2010
|
||||||||||
Derivatives Not Designated as Hedging Instruments
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
Put option
|
Other assets
|
$ | 2,121 | ||||||||
Currency forward contracts
|
Prepaid expenses and other receivables
|
226 | |||||||||
Foreign currency swap contract
|
Other accrued expenses
|
$ | 146 | ||||||||
Total
|
$ | 2,347 | $ | 146 |
Amount of Gain or (Loss) Recognized in Income on Derivatives
|
||||||||||
Derivatives Not Designated as Hedging Instruments
|
Location of Gain or (Loss) Recognized in Income on Derivatives
|
June 26, 2011
|
June 27, 2010
|
|||||||
Put option
|
Other expense
|
$ | 652 | $ | 2,121 | |||||
Currency forward contracts
|
Other expense
|
(4,682 | ) | 1,334 | ||||||
Foreign currency swap contract
|
Other expense
|
158 | (27 | ) | ||||||
Total
|
$ | (3,872 | ) | $ | 3,428 |
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
Put option
|
$ | 2,773 | $ | — | $ | — | $ | 2,773 | ||||||||
Foreign currency derivatives:
|
||||||||||||||||
Liabilities
|
(309 | ) | — | (309 | ) | — | ||||||||||
Total derivative instruments at fair value
|
$ | 2,464 | $ | — | $ | (309 | ) | $ | 2,773 |
Total
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
|||||||||||||
Put option
|
$ | 2,121 | $ | — | $ | — | $ | 2,121 | ||||||||
Foreign currency derivatives:
|
||||||||||||||||
Assets
|
226 | — | 226 | — | ||||||||||||
Liabilities
|
(146 | ) | — | (146 | ) | — | ||||||||||
Total derivative instruments at fair value
|
$ | 2,201 | $ | — | $ | 80 | $ | 2,121 |
Stock Option
Shares
|
Weighted
Average Option
Exercise Price
per Share
|
Weighted
Average Grant
Date Fair Value
per Share
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding, June 29, 2008
|
9,360 | $ | 40.43 | $ | 2,568 | |||||||||||
Granted
|
3,151 | $ | 15.16 | $ | 6.38 | |||||||||||
Exercised
|
(224 | ) | $ | 13.47 | $ | 411 | ||||||||||
Expired or forfeited
|
(4,039 | ) | $ | 42.71 | ||||||||||||
Outstanding, June 28, 2009
|
8,248 | $ | 30.40 | $ | 3,738 | |||||||||||
Granted
|
268 | $ | 19.03 | $ | 6.11 | |||||||||||
Exercised
|
(351 | ) | $ | 16.02 | $ | 1,674 | ||||||||||
Expired or forfeited
|
(2,380 | ) | $ | 37.31 | ||||||||||||
Outstanding, June 27, 2010
|
5,785 | $ | 27.88 | $ | 13,946 | |||||||||||
Granted
|
31 | $ | 23.42 | $ | 6.66 | |||||||||||
Exercised
|
(791 | ) | $ | 14.42 | $ | 11,153 | ||||||||||
Expired or forfeited
|
(2,033 | ) | $ | 42.75 | ||||||||||||
Outstanding, June 26, 2011
|
2,992 | $ | 21.30 | $ | 22,154 |
June 26, 2011
|
||||||||||||||||||||||||||||
Outstanding
|
Exercisable
|
|||||||||||||||||||||||||||
Range of Exercise Price per Share
|
Number Outstanding
|
Weighted Average Remaining Life (Years)
|
Weighted Average Exercise Price
|
Aggregate Intrinsic Value
|
Number Exercisable
|
Weighted Average Remaining Life (Years)
|
Weighted Average Exercise Price
|
Aggregate Intrinsic Value
|
||||||||||||||||||||
$ | 0.0 to $12.95 | 854 | 2.81 | $ | 12.83 | 473 | 2.80 | $ | 12.81 | |||||||||||||||||||
$ | 13.56 to $18.35 | 143 | 2.83 | 14.38 | 83 | 2.63 | 13.81 | |||||||||||||||||||||
$ | 18.55 to $18.55 | 966 | 2.11 | 18.55 | 508 | 2.11 | 18.55 | |||||||||||||||||||||
$ | 18.62 to $43.00 | 1,029 | 1.26 | 31.86 | 841 | 0.80 | 34.57 | |||||||||||||||||||||
2,992 | 2.05 | $ | 21.30 |
$22,154
|
1,905 | 1.72 | $ | 23.99 |
$11,769
|
Restricted Stock
Units
|
Weighted Average
Grant Date
Fair Value Per Share
|
Aggregate
Intrinsic Value
|
||||||||||
Outstanding, June 29, 2008
|
1 | $ | 48.10 | $ | 13 | |||||||
Granted
|
446 | $ | 17.39 | |||||||||
Vested
|
(92 | ) | $ | 12.06 | $ | 1,111 | ||||||
Expired or forfeited
|
— | |||||||||||
Outstanding, June 28, 2009
|
355 | $ | 17.84 | $ | 5,215 | |||||||
Granted
|
203 | $ | 19.26 | |||||||||
Vested
|
(101 | ) | $ | 19.38 | $ | 1,960 | ||||||
Expired or forfeited
|
(5 | ) | ||||||||||
Outstanding, June 27, 2010
|
452 | $ | 18.49 | $ | 9,113 | |||||||
Granted
|
1,984 | $ | 21.37 | |||||||||
Vested
|
(342 | ) | $ | 18.73 | $ | 9,719 | ||||||
Expired or forfeited
|
(43 | ) | ||||||||||
Outstanding, June 26, 2011
|
2,051 | $ | 21.22 | $ | 53,501 |
2011
|
2010
|
2009
|
||||||||||
Outstanding options exercisable
|
1,905 | 3,719 | 5,179 | |||||||||
Options and RSUs available for grant
|
510 | 3,291 | 2,408 | |||||||||
Total reserved common stock shares for stock option plans
|
5,553 | 9,528 | 11,011 |
2011
|
2010
|
2009
|
||||||||||
Selling, general and administrative expense
|
$ | 9,245 | $ | 7,906 | $ | 5,182 | ||||||
Research and development expense
|
3,115 | 1,642 | 1,773 | |||||||||
Cost of sales
|
3,254 | 1,871 | 450 | |||||||||
Total stock-based compensation expense
|
$ | 15,614 | $ | 11,419 | $ | 7,405 |
2011
|
2010
|
2009
|
||||||||||
Expected life
|
3.5 years
|
3.6 years
|
3.8 years
|
|||||||||
Risk free interest rate
|
0.84 | % | 1.31 | % | 1.99 | % | ||||||
Volatility
|
38.34 | % | 40.07 | % | 55.25 | % | ||||||
Dividend yield
|
0.00 | % | 0.00 | % | 0.00 | % |
2011
|
2010
|
2009
|
||||||||||
Reported in asset impairment, restructuring and other charges (recoveries):
|
||||||||||||
Asset impairment
|
$ | — | $ | — | $ | 48,885 | ||||||
Severance and workforce reduction costs (recoveries)
|
(3,426 | ) | 194 | 6,648 | ||||||||
Other charges
|
67 | 95 | 960 | |||||||||
Total asset impairment, restructuring and other charges (recoveries)
|
$ | (3,359 | ) | $ | 289 | $ | 56,493 |
Newport, Wales
|
El Segundo
|
All Other (1)
|
||||||||||
Accrued severance and workforce reduction costs, July 29, 2008
|
$ | — | $ | — | $ | 1,091 | ||||||
Charged to asset impairment, restructuring and other charges
|
1,815 | 3,610 | 1,678 | |||||||||
Charged to operating expenses
|
— | 468 | 238 | |||||||||
Costs paid
|
(1,574 | ) | (504 | ) | (2,216 | ) | ||||||
Foreign exchange gains
|
118 | — | 1 | |||||||||
Change in provision
|
— | (39 | ) | (416 | ) | |||||||
Accrued severance and workforce reduction costs, June 28, 2009
|
359 | 3,535 | 376 | |||||||||
Charged to asset impairment, restructuring and other charges
|
— | 357 | — | |||||||||
Charged to operating expenses
|
— | 1,006 | 31 | |||||||||
Costs paid
|
(347 | ) | (2 | ) | (244 | ) | ||||||
Foreign exchange gains
|
(12 | ) | — | — | ||||||||
Change in provision
|
— | — | (163 | ) | ||||||||
Accrued severance and workforce reduction costs, June 27, 2010
|
— | 4,896 | — | |||||||||
Change in provision
|
— | (4,435 | ) | — | ||||||||
Accrued severance and workforce reduction costs, June 26, 2011
|
$ | — | $ | 461 | $ | — |
(1)
|
All Other includes accruals related to Research and Development Facility, the Divestiture, and Other Activities and Charges.
|
Newport, Wales
|
El Segundo
|
Research & Development Facility
|
Other Charges
|
Total
|
||||||||||||||||
Fiscal 2009 reported in asset impairment, restructuring and other charges:
|
||||||||||||||||||||
Asset impairment
|
$ | 48,885 | $ | — | $ | — | $ | — | $ | 48,885 | ||||||||||
Severance and workforce reduction costs
|
1,815 | 3,571 | 381 | 881 | 6,648 | |||||||||||||||
Other charges
|
33 | 654 | 273 | — | 960 | |||||||||||||||
Total fiscal 2009 asset impairment, restructuring and other charges
|
$ | 50,733 | $ | 4,225 | $ | 654 | $ | 881 | $ | 56,493 | ||||||||||
Fiscal 2010 reported in asset impairment, restructuring and other charges (recoveries):
|
||||||||||||||||||||
Asset impairment
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Severance and workforce reduction costs (recoveries)
|
— | 357 | (47 | ) | (116 | ) | 194 | |||||||||||||
Other charges
|
— | — | 95 | — | 95 | |||||||||||||||
Fiscal 2010 total asset impairment, restructuring and other charges
|
$ | — | $ | 357 | $ | 48 | $ | (116 | ) | $ | 289 | |||||||||
Fiscal 2011 reported in asset impairment, restructuring and other charges (recoveries):
|
||||||||||||||||||||
Asset impairment
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Severance and workforce reduction costs (recoveries)
|
— | (3,426 | ) | — | — | (3,426 | ) | |||||||||||||
Other charges
|
— | — | 67 | — | 67 | |||||||||||||||
Fiscal 2011 total asset impairment, restructuring and other charges (recoveries)
|
$ | — | $ | (3,426 | ) | $ | 67 | $ | — | $ | (3,359 | ) |
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||||||||||||||||||||||||||
Business Segment
|
Revenues
|
Percentage
of Total
|
Gross
Margin
|
Revenues
|
Percentage
of Total
|
Gross
Margin
|
Revenues
|
Percentage
of Total
|
Gross
Margin
|
|||||||||||||||||||||||||||
PMD
|
$ | 456,764 | 38.8 | % | 31.6 | % | $ | 345,610 | 38.6 | % | 16.5 | % | $ | 233,737 | 31.6 | % | 10.9 | % | ||||||||||||||||||
ESP
|
275,044 | 23.4 | 44.7 | 185,404 | 20.7 | 40.3 | 151,090 | 20.4 | 36.7 | |||||||||||||||||||||||||||
AP
|
112,174 | 9.5 | 29.9 | 72,932 | 8.1 | 24.2 | 54,061 | 7.3 | 21.5 | |||||||||||||||||||||||||||
EP
|
134,627 | 11.5 | 44.1 | 128,691 | 14.4 | 42.3 | 87,473 | 11.8 | 37.1 | |||||||||||||||||||||||||||
HiRel
|
190,547 | 16.2 | 51.2 | 153,213 | 17.1 | 51.7 | 148,266 | 20.0 | 51.7 | |||||||||||||||||||||||||||
Ongoing customer segments total
|
1,169,156 | 99.4 | 39.1 | 885,850 | 98.9 | 32.0 | 674,627 | 91.1 | 29.9 | |||||||||||||||||||||||||||
IP
|
7,421 | 0.6 | 100.0 | 9,447 | 1.1 | 100.0 | 27,673 | 3.7 | 100.0 | |||||||||||||||||||||||||||
Ongoing segments total
|
1,176,577 | 100.0 | 39.5 | 895,297 | 100.0 | 32.7 | 702,300 | 94.9 | 32.6 | |||||||||||||||||||||||||||
TS
|
― | ― | ― | ― | ― | ― | 38,119 | 5.1 | (11.3 | ) | ||||||||||||||||||||||||||
Consolidated total
|
$ | 1,176,577 | 100.0 | % | 39.5 | % | $ | 895,297 | 100.0 | % | 32.7 | % | $ | 740,419 | 100.0 | % | 30.4 | % |
2011
|
2010
|
2009
|
||||||||||
Revenues from Unaffiliated Customers
|
||||||||||||
The United States
|
$ | 254,593 | $ | 204,474 | $ | 218,781 | ||||||
Asia
|
674,654 | 516,993 | 364,795 | |||||||||
Europe
|
239,909 | 164,383 | 129,169 | |||||||||
Subtotal
|
1,169,156 | 885,850 | 712,745 | |||||||||
Royalties (unallocated)
|
7,421 | 9,447 | 27,674 | |||||||||
Total
|
$ | 1,176,577 | $ | 895,297 | $ | 740,419 | ||||||
Long-lived Assets
|
||||||||||||
The United States
|
$ | 306,741 | $ | 235,021 | $ | 247,546 | ||||||
Asia
|
44,695 | 28,139 | 30,388 | |||||||||
Europe
|
155,742 | 131,203 | 145,690 | |||||||||
Total
|
$ | 507,178 | $ | 394,363 | $ | 423,624 |
Fiscal Years Ended
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Domestic
|
$ | 81,587 | $ | (19,787 | ) | $ | (130,566 | ) | ||||
Foreign
|
76,205 | 48,422 | (21,512 | ) | ||||||||
Total income (loss) before income taxes
|
$ | 157,792 | $ | 28,635 | $ | (152,078 | ) |
Fiscal Years Ended
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Current income taxes:
|
||||||||||||
Domestic
|
$ | 190 | $ | (31,307 | ) | $ | (15,008 | ) | ||||
Foreign
|
10,749 | (15,000 | ) | 6,246 | ||||||||
$ | 10,939 | $ | (46,307 | ) | $ | (8,762 | ) | |||||
Deferred income taxes:
|
||||||||||||
Domestic
|
$ | (6,551 | ) | $ | (4,983 | ) | 78,117 | |||||
Foreign
|
(13,142 | ) | (902 | ) | 25,984 | |||||||
(19,693 | ) | (5,885 | ) | 104,101 | ||||||||
Total (benefit) provision
|
$ | (8,754 | ) | $ | (52,192 | ) | $ | 95,339 |
Fiscal Years Ended
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Statutory tax rate
|
35.0 | % | 35.0 | % | (35.0 | )% | ||||||
State taxes, net of federal benefit
|
(6.0 | ) | 6.0 | ― | ||||||||
Change in valuation allowance
|
(19.2 | ) | (8.6 | ) | 105.1 | |||||||
Multijurisdictional taxation
|
(9.5 | ) | (35.7 | ) | (4.7 | ) | ||||||
Actual and deemed foreign dividends
|
2.1 | 51.3 | 23.9 | |||||||||
Foreign tax credit
|
(5.8 | ) | (21.5 | ) | (12.3 | ) | ||||||
Research and development credit
|
― | (4.7 | ) | (3.1 | ) | |||||||
Uncertain tax positions
|
(2.2 | ) | (205.1 | ) | (14.6 | ) | ||||||
Goodwill impairment
|
― | ― | 3.6 | |||||||||
Other, net
|
― | 1.0 | (0.2 | ) | ||||||||
Effective tax rate (benefit)
|
(5.6 | )% | (182.3 | )% | 62.7 | % |
June 26, 2011
|
June 27, 2010
|
|||||||
Deferred tax assets:
|
||||||||
Accrued expenses
|
$ | 14,436 | $ | 16,348 | ||||
Accrued compensation
|
22,717 | 18,501 | ||||||
Property, plant and equipment
|
50,053 | 63,975 | ||||||
Unrealized loss on securities
|
― | 318 | ||||||
Losses carryforward
|
55,784 | 58,477 | ||||||
Research and experimental credits
|
43,463 | 39,302 | ||||||
Other tax credits
|
22,683 | 25,752 | ||||||
Other
|
1,332 | 22,350 | ||||||
Total deferred tax assets
|
210,468 | 245,023 | ||||||
Valuation allowance
|
(182,563 | ) | (236,405 | ) | ||||
Deferred tax liabilities:
|
||||||||
Unrealized gain on securities
|
(4,637 | ) | (4,682 | ) | ||||
Prepaid expenses
|
(1,538 | ) | ― | |||||
Other
|
(224 | ) | (1,133 | ) | ||||
Total deferred tax liabilities
|
(6,399 | ) | (5,815 | ) | ||||
Net deferred tax assets
|
$ | 21,506 | $ | 2,803 |
Beginning balances of June 28, 2009
|
$ | 66,224 | ||
Increases for positions taken in current year
|
23,738 | |||
Increases for positions taken in a prior year
|
6,506 | |||
Decreases for positions taken in a prior year
|
(11,548 | ) | ||
Decreases for settlements with taxing authorities
|
(35,275 | ) | ||
Decreases for lapses in the applicable statute of limitation
|
(4,433 | ) | ||
Unrecognized tax benefits at June 27, 2010
|
$ | 45,212 | ||
Increases for positions taken in current year
|
$ | 2,708 | ||
Increases for positions taken in a prior year
|
2,347 | |||
Decreases for positions taken in a prior year
|
(1,810 | ) | ||
Decreases for settlements with taxing authorities
|
||||
Decreases for lapses in the applicable statute of limitation
|
(2,400 | ) | ||
Unrecognized tax benefits at June 26, 2011
|
$ | 46,057 |
Fiscal Years Ended
|
||||||||||||
June 26, 2011
|
June 27, 2010
|
June 28, 2009
|
||||||||||
Net income (loss)
|
$ | 166,546 | $ | 80,827 | $ | (247,417 | ) | |||||
Less: Income allocated to participating securities
|
2,562 | 465 | — | |||||||||
Income available to common stockholders
|
$ | 163,984 | 80,362 | (247,417 | ) | |||||||
Earnings per common share – basic
|
||||||||||||
Weighted average shares outstanding
|
69,858 | 70,958 | 72,295 | |||||||||
Basic income (loss) per share
|
$ | 2.35 | $ | 1.13 | $ | (3.42 | ) | |||||
Earnings per common share – diluted
|
||||||||||||
Basic weighted average shares outstanding
|
69,858 | 70,958 | 72,295 | |||||||||
Effect of dilutive securities – stock options and RSU’s
|
665 | 290 | — | |||||||||
Diluted weighted-average shares
|
70,523 | 71,248 | 72,295 | |||||||||
Diluted income (loss) per share
|
$ | 2.33 | $ | 1.13 | $ | (3.42 | ) |
Fiscal Year
|
Minimum Fixed Rentals
|
|||
2012
|
$ | 9.4 | ||
2013
|
4.2 | |||
2014
|
2.9 | |||
2015
|
2.1 | |||
2016
|
1.1 | |||
Thereafter
|
2.1 | |||
Total
|
$ | 21.8 |
Three Months Ended
|
||||||||||||||||
Year Ended June 26, 2011
|
September 26,
2010
|
December 26,
2010
|
March 27,
2011
|
June 26,
2011
|
||||||||||||
Revenues
|
$ | 280,867 | $ | 281,744 | $ | 296,717 | $ | 317,249 | ||||||||
Cost of sales
|
172,043 | 160,733 | 179,534 | 199,375 | ||||||||||||
Gross profit
|
108,824 | 121,011 | 117,183 | 117,874 | ||||||||||||
Selling, general and administrative expense
|
48,310 | 46,617 | 46,680 | 52,141 | ||||||||||||
Research and development expense
|
27,560 | 28,544 | 30,733 | 32,502 | ||||||||||||
Amortization of acquisition-related intangible assets
|
1,219 | 1,242 | 1,695 | 2,612 | ||||||||||||
Asset impairment, restructuring and other charges (recoveries)
|
134 | (4 | ) | (3,489 | ) | — | ||||||||||
Operating income
|
31,601 | 44,612 | 41,564 | 30,619 | ||||||||||||
Other expense (income), net
|
1,312 | 1,708 | (1,348 | ) | (954 | ) | ||||||||||
Interest income, net
|
(1,409 | ) | (4,152 | ) | (2,694 | ) | (1,859 | ) | ||||||||
Income before income taxes
|
31,698 | 47,056 | 45,606 | 33,432 | ||||||||||||
(Benefit from) provision for income taxes
|
(1,800 | ) | 3,127 | (3,879 | ) | (6,202 | ) | |||||||||
Net income
|
$ | 33,498 | $ | 43,929 | $ | 49,485 | $ | 39,634 | ||||||||
Net income per common share:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net income per common share
|
$ | 0.47 | $ | 0.62 | $ | 0.70 | $ | 0.56 | ||||||||
Diluted:
|
||||||||||||||||
Net income per common share
|
$ | 0.47 | $ | 0.62 | $ | 0.69 | $ | 0.55 | ||||||||
Average common shares outstanding—basic
|
70,165 | 69,587 | 69,854 | 69,827 | ||||||||||||
Average common shares and potentially dilutive securities outstanding—diluted
|
70,483 | 70,235 | 70,601 | 70,522 |
Three Months Ended
|
||||||||||||||||
Year Ended June 27, 2010
|
September 27,
2009
|
December 27,
2009
|
March 28,
2010
|
June 27,
2010
|
||||||||||||
Revenues
|
$ | 179,371 | $ | 210,244 | $ | 241,886 | $ | 263,796 | ||||||||
Cost of sales
|
132,014 | 147,426 | 154,576 | 168,684 | ||||||||||||
Gross profit
|
47,357 | 62,818 | 87,310 | 95,112 | ||||||||||||
Selling, general and administrative expense
|
43,582 | 37,285 | 43,135 | 45,188 | ||||||||||||
Research and development expense
|
22,827 | 24,215 | 25,649 | 26,619 | ||||||||||||
Amortization of acquisition-related intangible assets
|
1,094 | 1,094 | 1,093 | 1,094 | ||||||||||||
Asset impairment, restructuring and other charges
|
167 | (30 | ) | 117 | 35 | |||||||||||
Operating income (loss)
|
(20,313 | ) | 254 | 17,316 | 22,176 | |||||||||||
Other expense (income), net
|
778 | 1,009 | 318 | (86 | ) | |||||||||||
Interest income, net
|
(3,970 | ) | (2,488 | ) | (2,573 | ) | (2,190 | ) | ||||||||
Income (loss) before income taxes
|
(17,121 | ) | 1,733 | 19,571 | 24,452 | |||||||||||
Benefit from income taxes
|
(221 | ) | (26,585 | ) | (20,816 | ) | (4,570 | ) | ||||||||
Net income (loss)
|
$ | (16,900 | ) | $ | 28,318 | $ | 40,387 | $ | 29,022 | |||||||
Net income (loss) per common share:
|
||||||||||||||||
Basic:
|
||||||||||||||||
Net income (loss) per common share
|
$ | (0.24 | ) | $ | 0.40 | $ | 0.57 | $ | 0.41 | |||||||
Diluted:
|
||||||||||||||||
Net income (loss) per common share
|
$ | (0.24 | ) | $ | 0.39 | $ | 0.56 | $ | 0.41 | |||||||
Average common shares outstanding—basic
|
71,218 | 71,605 | 70,850 | 70,553 | ||||||||||||
Average common shares and potentially dilutive securities outstanding—diluted
|
71,218 | 71,827 | 71,176 | 71,014 |
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
|
Plan category
|
Number of
securities to be
issued upon exercise of
outstanding options, warrants
and rights (a)
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
(b)
|
Number of securities
remaining available
for future issuance
under equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
|
4,959,659 | (1) | $ | 21.13 | (2) | 1,265,158 | (3) | |||||
Equity compensation plans not approved by security holders
|
63,805 | (4) | 35.67 | — | ||||||||
Total
|
5,023,464 | $ | 21.30 | 1,265,158 |
(1)
|
Of these shares, 2,909,025 were subject to options then outstanding under the amended and restated 2000 Incentive Plan (“2000 Plan”), 2,050,634 were subject to restricted stock unit awards then outstanding under the 2000 Plan, and 19,500 were subject to options then outstanding under the 1992 Stock Incentive Plan (the “1992 Plan”). The 1992 Plan expired December 31, 2002, but options issued under the plan remain exercisable in accordance with plan terms.
|
(2)
|
This weighted-average exercise price does not reflect the 2,050,634 shares that will be issued upon the payment of outstanding restricted stock units.
|
(3)
|
This figure consists of 509,616 shares available for future issuance under the 2000 Plan and 755,542 shares available for issuance under the amended and restated 1984 Employee Stock Participation Plan (“ESPP”); however, participation in the ESPP has been suspended since April 2007.
|
(4)
|
This figure represents 63,805 options then outstanding under the 1997 Employee Stock Incentive Plan (the “1997 Plan”). The 1997 Plan was originally approved by our Board of Directors on November 24, 1997 and expired on November 22, 2004. No new awards are permitted under the 1997 Plan and, therefore, no shares remain available for grant under the plan. However, options issued and outstanding under the plan remain exercisable in accordance with the plan terms. None of the stock options that we granted under the plan are incentive stock options under Section 422 of the Internal Revenue Code and the term of each outstanding option granted under the plan does not exceed ten years from the date of its grant. There are no unvested restricted stock or restricted stock unit awards outstanding under the plan.
The Compensation Committee of our Board of Directors administers the 1997 Plan. The Compensation Committee has broad discretionary authority to construe and interpret the plan. The Compensation Committee may, through the terms of the award or otherwise, accelerate the vesting, extend the exercisability, term or vesting schedule, or change the price or previously imposed terms and conditions on an option or restricted stock award on the occurrence of specified events as set forth in the plan including, without limitation, upon a change of control of the Company (as defined in the plan) or in other circumstances or events as deemed appropriate by the Compensation Committee. The Compensation Committee right to amend awards granted under the plan is subject to the holder's consent as to any amendment that deprives the holder in any material respects of his or her rights under the award, except in specified circumstances as set forth in the plan. No award, or any interest in an award, may be transferred in any manner other than by will or the laws of descent and distribution, or incapacity, without the approval of the Compensation Committee.
|
|
a.
|
Financial Statements and Financial Statement Schedule being filed as part of this report are listed in the index on page 50.
|
|
b.
|
Exhibits filed as part of this report are listed on the Exhibit Index on page 114.
|
Item
|
Document
|
|
2(a)
|
Agreement of Plan of Merger, dated February 24, 2011, by and among International Rectifier Corporation, Cancun Merger Corp., CHiL Semiconductor Corporation, solely for purposes of specified Sections, the Equityholders party thereto, and, solely for the purposes of specified Sections, Shareholder Representative Services LLC, solely in its capacity as the Equityholders’ representative
|
Form 8-K filed February 25, 2011, with the Securities and Exchange Commission. (Exhibit 2.1)
|
3(a)
|
Certificate of Incorporation of the Company, as amended through July 19, 2004
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 19, 2004, Registration No. 333-117489. (Exhibit 3.1)
|
3(b)
|
Amendment to Certificate of Incorporation, dated November 13, 2009
|
Form 10-Q for the quarterly period ended December 27, 2009, filed with the Securities and Exchange Commission on February 3, 2010. (Exhibit 3.2)
|
3(c)
|
Bylaws as Amended and Restated
|
Form 8-K filed August 24, 2010, with the Securities and Exchange Commission. (Exhibit 3.1)
|
4(a)
|
Description of the Company's Common Stock | Form 8-A filed with the Securities and Exchange Commission on June 17, 1985 |
4(b)
|
Preferred Share Purchase Rights | Form 8-A filed with the Securities and Exchange Commission on August 21, 1996 |
10(a)*
|
International Rectifier Corporation 1997 Employee Stock Incentive Plan
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on February 26, 1998, Registration No. 33-46901. (Exhibit 4.1)
|
10(b)*
|
Amendment to International Rectifier Corporation 1997 Employee Stock Incentive Plan, dated October 1, 2001
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on October 1, 2001, Registration No. 333-70560. (Exhibit 4.2)
|
10(c)*
|
International Rectifier Corporation Amended and Restated Stock Incentive Plan of 1992
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on December 2, 1997, Registration No. 33-41363. (Exhibit 4.1)
|
10(d)*
|
International Rectifier Corporation Retirement Savings Plan
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 24, 1998, Registration No. 33-57575. (Exhibits 4.1, 4.2 and 4.3)
|
10(e)*
|
Amendment to International Rectifier Corporation Amended and Restated Stock Incentive Plan of 1992 effective as of February 20, 2002
|
Form 10-Q—for the quarterly period ended March 31, 2001, filed with the Securities and Exchange Commission on May 16, 2001. (Exhibit 2)
|
10(f)*
|
International Rectifier Corporation 2000 Stock Incentive Plan
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on May 18, 2000, Registration Number 333-37308. (Exhibit 4)
|
10(g)*
|
International Rectifier Corporation 1997 Stock Incentive Plan
|
Registration Statement on Form S-8 filed with the Securities and Exchange Commission on October 1, 2001, Registration Number 333-41904. (Exhibit 4.1)
|
10(h)*
|
International Rectifier Corporation 2000 Incentive Plan (Amended and Restated as of September 28, 2000)
|
Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 12, 2000. (Annex to Proxy Statement)
|
10(i)*
|
International Rectifier Corporation Restated 1984 Stock Participation Plan
|
Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on October 10, 2003. (Annex A)
|
10(j)*
|
Amended and Restated International Rectifier Corporation 2000 Stock Incentive Plan, effective as of November 24, 2004.
|
Form 8-K dated November 24, 2004, filed with the Securities and Exchange Commission. (Exhibit 99.1)
|
10(k)*
|
International Rectifier Corporation Deferred Compensation Plan
|
Form 10-Q—for the quarterly period ended September 30, 2004, filed with the Securities and Exchange Commission on November 12, 2004. (Exhibit 10.1)
|
10(l)*
|
Master Trust Agreement, effective as of November 11, 2004, between International Rectifier Corporation, a Delaware corporation, and Wilmington Trust Company, a Delaware corporation, as trustee, to evidence the master trust to be established pursuant to the International Rectifier Corporation Deferred Compensation Plan
|
Form 10-Q—for the quarterly period ended September 30, 2004, filed with the Securities and Exchange Commission on November 12, 2004. (Exhibit 10.2)
|
10(m)*
|
Amended and Restated 1984 Stock Participation Plan, Effective as of November 21, 2005
|
Form 8-K dated November 21, 2005, filed with the Securities and Exchange Commission on November 21, 2005. (Exhibit 99.1)
|
10(n)
|
Master Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of the Target Companies and certain of the assets of International Rectifier Corporation
|
Form 8-K, dated November 14, 2006, filed with the
Securities Exchange Commission. (Exhibit 2.1)
|
10(o)
|
Asset Purchase Agreement, dated November 8, 2006, by and among International Rectifier Corporation, International Rectifier Southeast Asia Pte, Ltd. and Vishay Intertechnology, Inc. with respect to certain assets of its Power Control Systems Business
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.2)
|
10(p)
|
Stock Purchase Agreement dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of International Rectifier Electronic Motion Systems Ltd.
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.3)
|
10(q)
|
Stock Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of International Rectifier Canada Limited
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.4)
|
10(r)
|
Stock Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of IR Germany Holdings
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.5)
|
10(s)
|
Stock Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of International Rectifier (India) Limited
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.6)
|
10(t)
|
Stock Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of International Rectifier Corporation Italiana S.p.A.
|
Form 8-K, dated November 14, 2006, filed with
the Securities Exchange Commission. (Exhibit 2.7)
|
10(u)
|
Stock Purchase Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc. with respect to all outstanding capital stock of Xi'an IR Micro-Electronics Co., Ltd.
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 2.8)
|
10(v)
|
Transition Services Agreement, dated November 8, 2006, by and between International Rectifier Corporation and Vishay Intertechnology, Inc.
|
Form 8-K, dated November 14, 2006, filed with the Securities Exchange Commission. (Exhibit 99.1)
|
10(w)
|
First Amendment to Master Purchase Agreement and Stock Purchase Agreement, dated January 23, 2007, by and between International Rectifier Corporation and Vishay International, Inc.
|
Form 10-Q—for the quarterly period ended December 31, 2006, dated February 9, 2007, filed with the Securities and Exchange Commission. (Exhibit 10.1)
|
10(x)
|
Intentionally omitted. | |
10(y)
|
Amendment and Waiver Agreement, dated March 30, 2007, by and among Vishay Intertechnology, Inc., Siliconix Inc., V.I.E.C., Ltd., Vishay Europe GmbH, Siliconix Semiconductor, Inc., acting in its function ( hoedanigheid ) as managing partner ( beherend vennoot ) of the limited partnership ( commanditaire vennootschap ), Siliconix Technology C.V., Vishay Americas, Inc., Vishay Asia Logistics Pte. Ltd., International Rectifier Corporation, International Rectifier Southeast Asia Pte, Ltd. and IR International Holdings China, Inc.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 2.1)
|
10(z)
|
Technology License Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology, Inc.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.1)
|
10(aa)
|
Technology License Back Agreement, dated April 1, 2007, by and between Vishay Intertechnology, Inc. and International Rectifier Corporation
|
Form 8-K, dated April 9, 2007, filed with
the Securities Exchange Commission. (Exhibit 99.2)
|
10(bb)
|
Trademark License Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology, Inc.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.3)
|
10(cc)
|
IR Trademark License Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology, Inc.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.4)
|
10(dd)
|
Amended and Restated Transition Services Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology, Inc.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.5)
|
10(ee)
|
Transition Product Services Agreement, dated April 1, 2007, by and among International Rectifier Corporation, International Rectifier Southeast Asia Pte. Ltd., Vishay Intertechnology and Vishay Asia Logistics Pte Ltd.
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.6)
|
10(ff)
|
Transition Buy Back Die Supply Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.7)
|
10(gg)
|
Transition IGBT/Auto Die Supply Agreement, dated April 1, 2007, by and between International Rectifier Corporation and Vishay Intertechnology
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.8)
|
10(hh)
|
Indemnification Escrow Agreement, dated April 1, 2007, by and among Vishay Intertechnology, Inc., International Rectifier Corporation and Union Bank of California, N.A., as escrow agent
|
Form 8-K, dated April 9, 2007, filed with the Securities Exchange Commission. (Exhibit 99.9)
|
10(ii)
|
Intentionally omitted. |
|
10(jj)
|
Separation Agreement, dated October 2, 2007, by and between International Rectifier Corporation and Alex Lidow
|
Form 8-K, dated October 2, 2007, filed with the Securities Exchange Commission. (Exhibit 99.1)
|
10(kk)*
|
Form of Option Grant Commitment Letter
|
Form 8-K, dated October 23, 2007, filed with the Securities Exchange Commission. (Exhibit 99.1)
|
10(ll)*
|
Form of Executive Officer Severance Agreement
|
Form 8-K, dated November 2, 2007, filed with the Securities Exchange Commission. (Exhibit 10.3)
|
10(mm)*
|
Form of Key Employee Severance Agreement
|
Form 8-K, dated November 2, 2007, filed with the Securities Exchange Commission. (Exhibit 10.4)
|
10(nn)*
|
Employment Agreement, dated February 6, 2008, by and between International Rectifier Corporation and Oleg Khaykin
|
Form 8-K, dated February 11, 2008, filed with the Securities Exchange Commission. (Exhibit 10.1)
|
10(oo)*
|
Offer Letter, dated March 31, 2008, by and between International Rectifier Corporation and Michael Barrow
|
Form 8-K, dated April 3, 2008, filed with the Securities Exchange Commission. (Exhibit 10.1)
|
10(pp)*
|
Agreement, dated April 17, 2008, by and between International Rectifier Corporation and Eric Lidow
|
Form 8-K, dated April 21, 2008, filed with the Securities Exchange Commission. (Exhibit 10.1)
|
10(qq)
|
Intentionally omitted. |
|
10(rr)
|
Form of Indemnification Agreement approved for directors and executive officers of International Rectifier Corporation
|
Current Report on Form 8-K, dated September 15, 2008, filed with the Securities and Exchange Commission. (Exhibit 10.1)
|
10(ss)*
|
Offer Letter executed September 21, 2008 between International Rectifier Corporation and Ilan Daskal
|
Current Report on Form 8-K, dated September 21, 2008, filed with the Securities and Exchange Commission. (Exhibit 10.1)
|
10(tt)*
|
Severance Agreement executed September 21, 2008 between International Rectifier Corporation and Ilan Daskal
|
Current Report on Form 8-K, dated September 21, 2008, filed with the Securities and Exchange Commission. (Exhibit 10.2)
|
10(uu)*
|
Form of Non-Employee Director Option Agreement
|
Form 10-Q—for the quarterly period ended September 30, 2008, filed with the Securities and Exchange Commission on November 6, 2008. (Exhibit 10.6)
|
10(vv)*
|
Amendment to Employment Agreement, dated December 29, 2008, entered into between International Rectifier Corporation and Oleg Khaykin
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.6)
|
10(ww)*
|
RSU Award Agreement, dated August 6, 2008, entered into between International Rectifier Corporation and Oleg Khaykin
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.7)
|
10(xx)*
|
Option Award Agreement, dated August 6, 2008, entered into between International Rectifier Corporation and Oleg Khaykin
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.8)
|
10(yy)*
|
Amendment to Offer Letter, dated December 26, 2008, entered into between International Rectifier Corporation and Ilan Daskal
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.9)
|
10(zz)*
|
Amendment to Severance Agreement, dated December 26, 2008, entered into between International Rectifier Corporation and Ilan Daskal
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.10)
|
10(aaa)*
|
Amendment to Severance Agreement, dated December 29, 2008, entered into between International Rectifier Corporation and Donald R. Dancer
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.12)
|
10(bbb)*
|
Amendment to Offer Letter, dated December 26, 2008, entered into between International Rectifier Corporation and Michael Barrow
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.13)
|
10(ccc)*
|
Amendment to Severance Agreement, dated December 26, 2008, entered into between International Rectifier Corporation and Michael Barrow
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.14)
|
10(ddd)*
|
Revised form of RSU Award Agreement under International Rectifier Corporation's 2000 Incentive Plan (Amended and Restated as of November 22, 2004)
|
Form 10-Q—for the quarterly period ended December 31, 2008, filed with the Securities and Exchange Commission on February 6, 2009. (Exhibit 10.15)
|
10(eee)*
|
Amendment to Employment Agreement, dated as of February 17, 2009, by and between International Rectifier Corporation and Donald R. Dancer
|
Current Report on Form 8-K, dated February 17, 2009, filed with the Securities and Exchange Commission. (Exhibit 10.1)
|
10(fff)*
|
2000 Incentive Plan Revised Non Employee Director Option Form
|
Form 10-Q—for the quarterly period ended March 29, 2009, filed with the Securities and Exchange Commission on May 8, 2009. (Exhibit 10.9)
|
10(ggg)*
|
International Rectifier Corporation Deferred Compensation Plan, Amended and Restated as of January 1, 2009
|
Form 10-Q—for the quarterly period ended March 29, 2009, filed with the Securities and Exchange Commission on May 8, 2009. (Exhibit 10.10)
|
10(hhh)
|
Confidential Settlement Agreement and Release, Amendment No. 1 to Transition Buy Back Die Supply Agreement, Amendment No. 2 to Technology License Agreement, Amendment No. 7 to Master Purchase Agreement, and Amendment No. 3 to Asset Purchase Agreement, dated June 25, 2009, by and between Vishay Intertechnology, Inc. and International Rectifier Corporation
|
Current Report on Form 8-K/A, dated June 25, 2009, filed with the Securities and Exchange Commission. (Exhibit 10.1)
|
10(iii)*
|
Offer Letter Agreement, dated May 16, 2008, between International Rectifier Corporation and Timothy Bixler
|
Form 10-K, dated August 27, 2009, filed with the Securities Exchange Commission. (Exhibit 10.1)
|
10(jjj)*
|
Severance Agreement, dated June 8, 2008, between International Rectifier Corporation and Timothy Bixler
|
Form 10-K, dated August 27, 2009, filed with the Securities Exchange Commission. (Exhibit 10.2)
|
10(kkk)*
|
Amendment to Offer Letter, dated December 26, 2008, between International Rectifier Corporation and Timothy Bixler
|
Form 10-K, dated August 27, 2009, filed with the Securities Exchange Commission. (Exhibit 10.3)
|
10(lll)*
|
Amendment to Severance Agreement, dated December 26, 2008, between International Rectifier Corporation and Timothy Bixler
|
Form 10-K, dated August 27, 2009, filed with the Securities Exchange Commission. (Exhibit 10.4)
|
10(mmm)*
|
Offer Letter Amendment, dated November 5, 2009, between the Company and Ilan Daskal
|
Form 10-Q, dated November 6, 2009, filed with the Securities Exchange Commission. (Exhibit 10.1)
|
10(nnn)
|
Confidential Settlement Agreement and Release, Amendment No. 1 to Transition Buy Back Die Supply Agreement, Amendment No. 2 to Technology License Agreement, Amendment No. 7 to Master Purchase Agreement, and Amendment No. 3 to Asset Purchase Agreement, dated June 25, 2009, by and between Vishay Intertechnology, Inc. and International Rectifier Corporation
|
Form 8-K/A, filed July 29, 2009, with the Securities Exchange Commission. (Exhibit 10.1)
|
10(ooo)*
|
Form of Performance Based Restricted Stock Unit Award Agreement for Messrs. Khaykin and Barrow
|
Form 8-K, filed November 13, 2009, with the Securities Exchange Commission. (Exhibit 10.1)
|
10(ppp)*
|
Form of Performance Based Restricted Stock Unit Award Agreement for Messrs. Daskal and Bixler
|
Form 8-K, filed November 13, 2009, with the Securities Exchange Commission. (Exhibit 10.2)
|
10(qqq)*
|
Form of Performance Based Restricted Stock Unit Award Agreement for Alternative Performance Condition
|
Form 10-Q, dated February 3, 2010, filed with the Securities Exchange Commission. (Exhibit 10.3)
|
10(rrr)*
|
Form of Performance Based Restricted Stock Unit Award Agreement for Double Performance Condition
|
Form 10-Q, dated February 3, 2010, filed with the Securities Exchange Commission. (Exhibit 10.4)
|
10(sss)*
|
Description of Fiscal year 2010 Cash and Equity Incentive Programs for Executive Officers
|
Form 8-K, filed November 13, 2009, with the Securities Exchange Commission. (Item 5.2(e))
|
10(ttt)*
|
Description of Compensation Arrangements for Independent Members of Board of Directors
|
Form 8-K, filed May 4, 2010, with the Securities Exchange Commission. (Item 1.1)
|
10(uuu)*
|
Description of Fiscal Year 2011 Cash and Equity Incentive Programs for Executive Officers
|
Form 8-K, filed July 13, 2010, with the Securities Exchange Commission. (Item 5.2(e))
|
10(vvv)*
|
Form of Consulting Agreement, effective August 18, 2010, between International Rectifier Corporation and Dr. Jack O. Vance
|
Form 8-K, filed August 24, 2010, with the Securities Exchange Commission. (Exhibit 10.1)
|
10(www)*
|
Form of Non-Employee Director Restricted Stock Unit Agreement
|
Form 8-K, filed August 24, 2010, with the Securities Exchange Commission. (Exhibit 10.2)
|
10(xxx)*
|
Description of Fiscal Year 2011 Cash Incentive Program Modification for Company Secretary
|
Form 8-K, filed August 31, 2010, with the Securities Exchange Commission. (Exhibit 5.2(e))
|
10(yyy)* |
Form of Employee Performance-Based Restricted Stock Unit Award Agreement
|
Form 8-K, filed July 13, 2010, with the Securities Exchange Commission. (Exhibit 10.1) |
10(zzz)*
|
Form of Employee Restricted Stock Unit Award Agreement
|
Form 10-Q dated November 5, 2010 filed with the Securities and Exchange Commission (Exhibit 10.1)
|
10(aaaa)*
|
Description of Executive Officer Cash Incentive Program Performance Goals for Second and Third Quarter of Fiscal Year 2011
|
Form 8-K, filed February 11, 2011, with the Securities Exchange Commission (Item 5.2(e))
|
10(bbbb)*
|
Updated Form of Named Officer Retention Restricted Stock Unit Award Agreement
|
Form 8-K filed June 24, 2011, with the Securities Exchange Commission (Exhibit 10.1)
|
10(cccc)*
|
Updated Form of Performance Restricted Stock Unit Award Agreement
|
Form 8-K filed June 24, 2011, with the Securities Exchange Commission (Exhibit 10.2)
|
10(dddd)*
|
Description of Named Officer Equity Award Program
|
Form 8-K, filed June 24, 2011, with the Securities Exchange Commission (Item 5.2(e))
|
10(eeee)*
|
Description of Executive Officer Cash Incentive Program for Fiscal Year 2012
|
Form 8-K, filed July 26, 2011, with the Securities Exchange Commission (Item 5.2(e))
|
10(ffff)*
|
Description of Updated Compensation Arrangements for Independent Members of Board of Directors
|
Form 8-K, filed August 19, 2011, with the Securities Exchange Commission (Item 1.1)
|
14
|
Code of Ethics
|
Form 8-K, filed with the Securities and Exchange Commission on August 19, 2011. (Exhibit 14.1)
|
*
|
Denotes management contract or compensatory plan or arrangement.
|
10.1
|
Form of Updated June 2011 Named Officer and Extended Management Team Retention Restricted Stock Unit Award Agreement*
|
10.2
|
Form of Updated June 2011 Non-Extended Management Team Retention Restricted Stock Unit Award Agreement*
|
10.3
|
Form of June 2011 Performance Restricted Stock Unit Award Agreement*
|
10.4
|
Form of Updated August 2011 Non-Employee Director Restricted Stock Unit Award Agreement *
|
10.5
|
Amendment to Relocation Benefits between International Rectifier Corporation and Ilan Daskal dated August 18, 2011.*
|
21
|
List of Subsidiaries
|
23.1
|
Consent of Independent Registered Public Accounting Firm
|
24
|
Power of Attorney
|
31.1
|
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification Pursuant to 18 U.S.C. 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification Pursuant to 18 U.S.C. 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS**
|
XBRL Instance
|
101.SCH**
|
XBRL Taxonomy Extension Schema
|
101.CAL**
|
XBRL Extension Calculation
|
101.LAB**
|
XBRL Extension Labels
|
101.PRE**
|
XBRL Taxonomy Extension Presentation
|
101.DEF**
|
XBRL Taxonomy Extension Definition
|
*
|
Denotes management contract or compensatory plan or arrangement
|
**
|
Furnished, not filed
|
INTERNATIONAL RECTIFIER CORPORATION
(Registrant)
|
||
By:
|
/s/ ILAN DASKAL
|
|
Date: August 22, 2011
|
Ilan Daskal
Chief Financial Officer
(Duly Authorized Officer and Principal Financial
and Accounting Officer)
|
Signatures
|
Title
|
Date
|
||||||||||||
/s/ Richard J. Dahl*
Richard J. Dahl
|
Chairman of the Board
|
August 22, 2011
|
||||||||||||
/s/ Oleg Khaykin*
Oleg Khaykin
|
Director and Chief Executive Officer
(Principal Executive Officer)
|
August 22, 2011
|
||||||||||||
/s/ Robert Attiyeh*
Robert Attiyeh
|
Director
|
August 22, 2011
|
||||||||||||
/s/ Mary B. Cranston*
Mary B. Cranston
|
Director
|
August 22, 2011
|
||||||||||||
/s/ Dwight W. Decker*
Dr. Dwight W. Decker
|
Director
|
August 22, 2011
|
||||||||||||
/s/ Thomas A. Lacey*
Thomas A. Lacey
|
Director
|
August 22, 2011
|
||||||||||||
/s/ James D. Plummer*
James D. Plummer
|
Director
|
August 22, 2011
|
||||||||||||
/s/ Barbara L. Rambo*
Barbara L. Rambo
|
Director
|
August 22, 2011
|
||||||||||||
/s/ Rochus E. Vogt*
Rochus E. Vogt
|
Director
|
August 22, 2011
|
||||||||||||
*By: /s/ Ilan Daskal
Ilan Daskal
Attorney-in-fact
|
August 22, 2011
|
Balance at
beginning of
year
|
Additions
(reductions)
charged to costs
and expenses(1)
|
Deductions
(2)
|
Balance at end
of year
|
|||||||||||||
2011
|
||||||||||||||||
Accounts receivable allowance
|
$ | 3,725 | $ | 2,731 | $ | (4,032 | ) | $ | 2,424 | |||||||
Deferred income tax valuation allowance
|
236,405 | 100 | (53,942 | ) | 182,563 | |||||||||||
2010
|
||||||||||||||||
Accounts receivable allowance
|
$ | 5,102 | $ | 1,910 | $ | (3,287 | ) | $ | 3,725 | |||||||
Deferred income tax valuation allowance
|
248,666 | 1,680 | (13,941 | ) | 236,405 | |||||||||||
2009
|
||||||||||||||||
Accounts receivable allowance
|
$ | 6,525 | $ | 6,660 | $ | (8,083 | ) | $ | 5,102 | |||||||
Deferred income tax valuation allowance
|
78,142 | 184,333 | (13,809 | ) | 248,666 |
(1)
|
Additions charged to costs and expenses relating to accounts receivable are net of reductions to estimated reserves; additions to deferred income tax valuation allowance relating to state deferred tax assets true-up.
|
(2)
|
Deductions relating to accounts receivable allowance include uncollectible accounts written-off, net of recoveries; deductions of deferred income tax valuation allowance relating to decreased deferred tax assets and release of valuation allowance.
|
Number of Stock Units:
|
1
|
Vesting Schedule:
|
One-third of the Stock Units subject to the Award will vest on each of the first three anniversary dates of Award Date1
|
Award Date:
|
_____, 2011
|
Number of Stock Units:
|
1
|
Vesting Schedule:
|
One-third of the Stock Units subject to the Award will vest on each of the first three anniversary dates of Award Date1
|
Award Date:
|
____, 2011
|
Participant Name:
|
||
Number of Stock Units:
|
(1) | |
Vesting Schedule:
|
See vesting set forth in Exhibit A attached hereto(1)
|
|
Award Date:
|
June 23, 2011 |
INTERNATIONAL RECTIFIER
|
PARTICIPANT
|
||
CORPORATION, a Delaware corporation
|
|||
By:
|
|||
Signature
|
|||
Print Name:
|
|||
Address
|
|||
Its:
|
|||
City, State, Zip Code
|
Participant Name: _______
|
|
Number of Stock Units: _____________
|
(1)
|
Vesting Schedule:
|
100% of the Stock Units subject to the Award will vest on the first anniversary of Award Date(1)
|
Award Date: _________
|
|
INTERNATIONAL RECTIFIER
|
PARTICIPANT
|
|||
CORPORATION, a Delaware corporation
|
||||
By:
|
||||
Signature
|
||||
Print Name:
|
||||
Address
|
||||
Its:
|
||||
City, State, Zip Code
|
||||
Signatures
|
Title
|
Date
|
||||||||||||
/s/ Richard J. Dahl
|
Chairman of the Board
|
August 22, 2011
|
||||||||||||
Richard J. Dahl | ||||||||||||||
/s/ Oleg Khaykin
|
Director and Chief Executive Officer (Principal Executive Officer)
|
August 22, 2011
|
||||||||||||
Oleg Khaykin | ||||||||||||||
/s/ Robert Attiyeh
|
Director
|
August 22, 2011
|
||||||||||||
Robert Attiyeh | ||||||||||||||
/s/ Mary B. Cranston
|
Director
|
August 22, 2011
|
||||||||||||
Mary B. Cranston | ||||||||||||||
/s/ Dwight W. Decker
|
Director
|
August 22, 2011
|
||||||||||||
Dwight W. Decker | ||||||||||||||
/s/ Thomas A. Lacey
|
Director
|
August 22, 2011
|
||||||||||||
Thomas A. Lacey | ||||||||||||||
/s/ James D. Plummer
|
Director
|
August 22, 2011
|
||||||||||||
James D. Plummer | ||||||||||||||
/s/ Barbara L. Rambo
|
Director
|
August 22, 2011
|
||||||||||||
Barbara L. Rambo | ||||||||||||||
/s/ Rochus E. Vogt
|
Director
|
August 22, 2011
|
||||||||||||
Rochus E. Vogt |
1.
|
I have reviewed this Annual Report on Form 10-K of International Rectifier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 22, 2011
|
/s/ Oleg Khaykin
Oleg Khaykin
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of International Rectifier Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 22, 2011
|
/s/ ILAN DASKAL
Ilan Daskal
Chief Financial Office
(Principal Financial and
Accounting Officer)
|
|
(i)
|
the Annual Report on Form 10-K of the Company for the fiscal year ended June 26, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Oleg Khaykin
Oleg Khaykin
Chief Executive Officer
(Principal Executive Officer)
|
|
(i)
|
the Annual Report on Form 10-K of the Company for the fiscal year ended June 26, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ ILAN DASKAL
Ilan Daskal
Chief Financial Officer
(Principal Financial and
Accounting Officer)
|
_P
MV_:,^#'_``3,_;5^`_B_]K^']GKXHZQ\(KR+4?[2M/A_X[N_#USX9^'7Q,\2
MZ#K7@WQ*-3\%>$/B7K_@VY\3NG@OQG9P6]S;6NH>&]774;?2M0\I_9UT3P7X
M-_:'^#.DV)_X*/\`[&GQ1U7Q!XO;6/@O^W?^T5\??VPOA[^U+\*3\)/B-/%\
M./AI\4?$/[9?[8O['G@CXP:;X\TK2_CQ9^'_``+\2;;]M"T^&?[-7Q0-Y\,=
M&_9N\>>,?&VK_9.E?\$WOV`?#'@CXQ?#SP%^QG^S5\)O"_[0/PI\8_`_XR1_
M!'X.^!_@=KOCWX3^/M(NM#\6^"=7\8?"+1O!7B^/2=5T^\G4-I^NV5[I]X(-
M4TNZLM4M+2\@J^!OV,-;TOXF?#;XF_&C]L#]I_\`:KN?@UX@USQS\)?"OQKT
M;]D?PEX5\!?$S7_A[XV^$5W\2=//[,'[*G[.OBG7_$$'PI^)_P`4?`5KH?C;
MQ1XI^'JZ=X_U77I_!-QXVT/P/XJ\)@'P!^PO^T+XJ\=_M7?'KXA>)/CCX@?X
M-Z9X@^*.@>-/&GQ6^)>HZ+\$/VBX/VF?VJO".E?\$A?&_P"PU\,?B'K5G'H/
MP?T+]GRS^(?[,/B#XY?"OX6_!/X-?MT_M*ZE:ZQ\*?'?[>GB3PKJ7QJ\'_('
M["GBRR\>_LO_`/!.?QU\!O$W_!5_QI^W'XT\/_\`!/?Q9\6_&/QWUG_@L#XC
M_9?\6>%?$?B#X'ZQ^WIXFU3Q#^UG
Derivative Financial Instruments, Gain or (Loss) Recognized in Earnings on Derivative Instruments (Details) (USD $)
In Thousands |
12 Months Ended | |
---|---|---|
Jun. 26, 2011
|
Jun. 27, 2010
|
|
Derivative Instruments, Gain (Loss) [Line Items] | Â | Â |
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (3,872) | $ 3,428 |
Derivatives Not Designated as Hedging Instruments [Member] | Put Option [Member] | Other Expense [Member]
|
 |  |
Derivative Instruments, Gain (Loss) [Line Items] | Â | Â |
Amount of Gain or (Loss) Recognized in Income on Derivatives | 652 | 2,121 |
Derivatives Not Designated as Hedging Instruments [Member] | Currency Forward Contracts [Member] | Other Expense [Member]
|
 |  |
Derivative Instruments, Gain (Loss) [Line Items] | Â | Â |
Amount of Gain or (Loss) Recognized in Income on Derivatives | (4,682) | 1,334 |
Derivatives Not Designated as Hedging Instruments [Member] | Foreign Currency Swap Contract [Member] | Other Expense [Member]
|
 |  |
Derivative Instruments, Gain (Loss) [Line Items] | Â | Â |
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ 158 | $ (27) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data |
Jun. 26, 2011
|
Jun. 27, 2010
|
---|---|---|
Current assets: | Â | Â |
Allowances for trade accounts receivable | $ 2,424 | $ 3,725 |
Stockholders' equity: | Â | Â |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 330,000,000 | 330,000,000 |
Common stock, shares outstanding (in shares) | 69,899,825 | 70,324,178 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 4,627,248 | 3,193,930 |
Stock-Based Compensation and Employee Benefit Plans (Details) (USD $)
|
12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
Jun. 26, 2011
Amended ESPP [Member]
|
Jun. 26, 2011
Amended 2000 Incentive Plan [Member]
|
Nov. 24, 2004
Amended 2000 Incentive Plan [Member]
|
Jun. 26, 2011
Stock Options [Member]
|
Jun. 27, 2010
Stock Options [Member]
|
Jun. 28, 2009
Stock Options [Member]
|
Jun. 29, 2008
Stock Options [Member]
Granted to Chief Executive Officer [Member]
|
Jun. 26, 2011
Restricted Stock Units [Member]
|
Jun. 27, 2010
Restricted Stock Units [Member]
|
Jun. 28, 2009
Restricted Stock Units [Member]
|
Jun. 26, 2011
Restricted Stock Units [Member]
Granted to Employees [Member]
|
Jun. 26, 2011
Restricted Stock Units [Member]
Granted to Members of the Board of Directors [Member]
|
Jun. 26, 2011
Restricted Stock Units with Performance Based Vesting Criteria [Member]
|
Jun. 27, 2010
Restricted Stock Units with Performance Based Vesting Criteria [Member]
|
Jun. 26, 2011
Restricted Stock Units with Market Based Vesting Criteria [Member]
Granted to Executives and Certain Key Employees [Member]
|
Jun. 29, 2008
Granted to Chief Executive Officer [Member]
|
Jun. 26, 2011
Exercise Prices Per Share - Range 1 [Member]
|
Jun. 26, 2011
Exercise Prices Per Share - Range 2 [Member]
|
Jun. 26, 2011
Exercise Prices Per Share - Range 3 [Member]
|
Jun. 26, 2011
Exercise Prices Per Share - Range 4 [Member]
|
Jun. 26, 2011
General and Administrative Expense [Member]
|
Jun. 27, 2010
General and Administrative Expense [Member]
|
Jun. 28, 2009
General and Administrative Expense [Member]
|
Jun. 26, 2011
Research and Development Expense [Member]
|
Jun. 27, 2010
Research and Development Expense [Member]
|
Jun. 28, 2009
Research and Development Expense [Member]
|
Jun. 26, 2011
Cost of Sales [Member]
|
Jun. 27, 2010
Cost of Sales [Member]
|
Jun. 28, 2009
Cost of Sales [Member]
|
|
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Number of unissued shares in the ESPP (in shares) | Â | Â | Â | 755,542 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Vesting rights of awards granted prior to plan amendment | annual installments of 25 percent beginning on the first anniversary date | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expiration of awards granted prior to plan amendment (in years) | 7 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Vesting rights of awards granted, currently in effect | Â | Â | Â | Â | annual installments of 33 1/3 percent beginning on the first anniversary date, and expire after five years. |
 |  |  |  |  |  |  |  | For the awards made to employees, the vesting of awards generally takes place in equal installments over each of the first three anniversaries of the date of grant. |
The awards made to members of the Board of Directors were made as part of the Board’s annual director compensation program, under which the vesting of awards takes place on the first anniversary of the date of grant. |
 |  | These market-based awards vest (or fail to vest) as of the end of the Company’s fiscal year 2014 but the actual number of these awards which will ultimately vest is based on the average closing market price of the Company’s common stock computed over the Company’s 2014 fiscal year, and otherwise subject to the terms and conditions of the 2000 Plan and applicable award documentation. |
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Expiration of awards granted, currently in effect (in years) | Â | Â | Â | Â | 5 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Authorized shares prior to plan amendment (in shares) | Â | Â | Â | Â | Â | 7,500,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Authorized shares, currently in effect (in shares) | Â | Â | Â | Â | Â | 12,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock option shares activity [Roll Forward] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, beginning of period (in shares) | Â | Â | Â | Â | Â | Â | 5,785,000 | 8,248,000 | 9,360,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Granted (in shares) | Â | Â | Â | Â | Â | Â | 31,000 | 268,000 | 3,151,000 | 750,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Exercised (in shares) | Â | Â | Â | Â | Â | Â | (791,000) | (351,000) | (224,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expired or forfeited (in shares) | Â | Â | Â | Â | Â | Â | (2,033,000) | (2,380,000) | (4,039,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, end of period (in shares) | Â | Â | Â | Â | Â | Â | 2,992,000 | 5,785,000 | 8,248,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock option activity, additional disclosures [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average option exercise price, outstanding, beginning of period (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 27.88 | $ 30.40 | $ 40.43 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average option exercise price, granted (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 23.42 | $ 19.03 | $ 15.16 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average option exercise price, exercised (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 14.42 | $ 16.02 | $ 13.47 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average option exercise price, expired or forfeited (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 42.75 | $ 37.31 | $ 42.71 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average option exercise price, outstanding, end of period (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 21.30 | $ 27.88 | $ 30.40 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average grant date fair value, granted (in dollars per share) | Â | Â | Â | Â | Â | Â | $ 6.66 | $ 6.11 | $ 6.38 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, outstanding, beginning of period | Â | Â | Â | Â | Â | Â | $ 13,946,000 | $ 3,738,000 | $ 2,568,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, exercised | Â | Â | Â | Â | Â | Â | 11,153,000 | 1,674,000 | 411,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, outstanding, end of period | 22,154,000 | Â | Â | Â | Â | Â | Â | 13,946,000 | 3,738,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Proceeds received from the exercise of stock options | 11,400,000 | 5,600,000 | 3,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Tax benefit realized for the tax deductions from stock options exercised | 1,400,000 | 0 | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Restricted Stock Unit Activity [Roll Forward] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, beginning of period (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 452,000 | 355,000 | 1,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Granted (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 250,000 | 1,984,000 | 203,000 | 446,000 | 1,272,730 | 34,335 | 311,212 | 170,000 | 366,100 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Vested (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (342,000) | (101,000) | (92,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expired or forfeited (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (43) | (5,000) | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, end of period (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2,051,000 | 452,000 | 355,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Restricted stock unit activity, additional disclosures [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average grant date fair value per share, outstanding, beginning of period (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 18.49 | $ 17.84 | $ 48.10 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average grant date fair value per share, granted (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 21.37 | $ 19.26 | $ 17.39 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average grant date fair value per share, vested (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 18.73 | $ 19.38 | $ 12.06 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average grant date fair value per share, outstanding, end of period (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 21.22 | $ 18.49 | $ 17.84 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, outstanding, beginning of period | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 9,113,000 | 5,215,000 | 13,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, vested | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 9,719,000 | 1,960,000 | 1,111,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Aggregate intrinsic value, outstanding, end of period | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 53,501,000 | 9,113,000 | 5,215,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Shares withheld to fund grantee income tax withholding obligations (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 124,363 | 39,744 | 41,827 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Additional information relating to stock-based compensation plans [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding options exercisable (in shares) | 1,905,000 | 3,719,000 | 5,179,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Options and RSUs available for grant (in shares) | 510,000 | 3,291,000 | 2,408,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total reserved common stock shares for stock option plans (in shares) | 5,553,000 | 9,528,000 | 11,011,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Forfeiture rate assumed for the majority of the options (in hundredths) | 5.00% | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Compensation cost not yet recognized [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total compensation cost not yet recognized | 38,300,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total compensation cost not yet recognized, period for recognition (excluding award made to CEO and PSU's) (in years) | 3 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total compensation cost not yet recognized, period for recognition (including award made to CEO) (in years) | 1.7 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 5 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Weighted average assumptions [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Method used | Â | Â | Â | Â | Â | Â | Black Scholes | Black Scholes | Black Scholes | Â | Â | Â | Â | Â | Â | Â | Â | Monte Carlo | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expected life (in years) | Â | Â | Â | Â | Â | Â | 3.5 | 3.6 | 3.8 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Risk free interest rate (in hundredths) | Â | Â | Â | Â | Â | Â | 0.84% | 1.31% | 1.99% | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Volatility (in hundredths) | Â | Â | Â | Â | Â | Â | 38.34% | 40.07% | 55.25% | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Dividend yield (in hundredths) | Â | Â | Â | Â | Â | Â | 0.00% | 0.00% | 0.00% | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Range of Exercise Price per Share - lower limit (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 0.0 | $ 13.56 | $ 18.55 | $ 18.62 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Range of Exercise Price per Share - upper limit (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 12.95 | $ 18.35 | $ 18.55 | $ 43.00 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Number Outstanding (in shares) | 2,992,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 854,000 | 143,000 | 966,000 | 1,029,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, Weighted Average Remaining Life (in years) | 2.05 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2.81 | 2.83 | 2.11 | 1.26 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 21.30 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 12.83 | $ 14.38 | $ 18.55 | $ 31.86 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding, Aggregate Intrinsic Value | 22,154,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Exercisable [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Number Exercisable (in shares) | 1,905,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 473,000 | 83,000 | 508,000 | 841,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Exercisable, Weighted Average Remaining Life (in years) | 1.72 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2.80 | 2.63 | 2.11 | 0.80 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 23.99 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 12.81 | $ 13.81 | $ 18.55 | $ 34.57 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Exercisable, Aggregate Intrinsic Value | 11,769,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock-based compensation expense | 15,614,000 | 11,419,000 | 7,405,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 3,800,000 | 1,900,000 | 0 | Â | Â | Â | Â | Â | 9,245,000 | 7,906,000 | 5,182,000 | 3,115,000 | 1,642,000 | 1,773,000 | 3,254,000 | 1,871,000 | 450,000 |
Amount recorded for awardees determined to be potentially eligible for retirement | 800,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Decrease in stock option expense recorded due to correction of an error | Â | Â | 1,800,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Deferred Compensation Plan [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fair value of the assets of deferred compensation plan | 7,800,000 | 7,300,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fair value of the liabilities of deferred compensation plan | 7,600,000 | 6,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net changes in fair value for deferred compensation plan recorded in other expense | 400,000 | 400,000 | 500,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
401k Plan [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Company contributions to the 401(k) plan | $ 2,500,000 | $ 2,900,000 | $ 3,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
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Jun. 26, 2011
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS For the Fiscal Years Ended June 26, 2011, June 27, 2010, and June 28, 2009 (In thousands)
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Document And Entity Information (USD $)
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12 Months Ended |
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Jun. 26, 2011
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Entity Registrant Name | INTERNATIONAL RECTIFIER CORP /DE/ |
Entity Central Index Key | 0000316793 |
Current Fiscal Year End Date | --06-26 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Public Float | $ 2,042,788,060 |
Entity Common Stock, Shares Outstanding | 69,899,825 |
Document Fiscal Year Focus | 2011 |
Document Fiscal Period Focus | FY |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | Jun. 26, 2011 |
Business Acquisitions (Tables)
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Jun. 26, 2011
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Business Acquisitions [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preliminary Allocation of Consideration | The total estimated consideration as shown in the table below is allocated to CHiL’s tangible and intangible assets and liabilities based on their estimated fair value as of the date of the completion of the transaction, March 7, 2011. The Company made adjustments to the preliminary allocation in the fourth quarter of fiscal year 2011 which resulted in changes to consideration transferred, residual amount allocated to goodwill, inventory, intangibles, net working capital and deferred taxes. The estimated consideration is allocated as follows (in thousands):
The total estimated consideration for the Technology Acquisition as shown in the table below is allocated to the tangible and intangible assets and liabilities based on their estimated fair value as of the date of the completion of the transaction, February 3, 2011. Acquisition costs were not material. The consideration is allocated as follows:
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Acquisition-Related Intangible Assets | Identifiable acquisition-related intangible assets and their estimated useful lives are as follows (in thousands):
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Pro Forma Information | The results of operations for CHiL and the Technology Acquisition have been included in the Company’s consolidated statement of operations since the consummation of the acquisitions on March 7, 2011 and February 3, 2011, respectively. The following unaudited pro forma financial information presents the combined results as if the acquisitions had occurred at the beginning of the current and prior fiscal year reporting periods (in thousands):
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Investments (Details) (USD $)
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12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||||||||||||||
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Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
Jun. 26, 2011
Short-Term Investment [Member]
|
Jun. 27, 2010
Short-Term Investment [Member]
|
Jun. 26, 2011
Short-Term Investment [Member]
Corporate Debt [Member]
|
Jun. 26, 2011
Short-Term Investment [Member]
U.S. Government and Agency Obligations [Member]
|
Jun. 27, 2010
Short-Term Investment [Member]
U.S. Government and Agency Obligations [Member]
|
Jun. 26, 2011
Long-Term Investment [Member]
|
Jun. 27, 2010
Long-Term Investment [Member]
|
Jun. 26, 2011
Long-Term Investment [Member]
U.S. Government and Agency Obligations [Member]
|
Jun. 27, 2010
Long-Term Investment [Member]
U.S. Government and Agency Obligations [Member]
|
Jun. 27, 2010
Long-Term Investment [Member]
Mortgage-backed Securities [Member]
|
Jun. 26, 2011
Long-Term Investment [Member]
Asset-backed Securities [Member]
|
Jun. 27, 2010
Long-Term Investment [Member]
Asset-backed Securities [Member]
|
Jun. 28, 2009
Corporate Debt [Member]
|
Jun. 27, 2010
U.S. Government and Agency Obligations [Member]
|
Jun. 27, 2010
Mortgage-backed and Asset-backed Securities [Member]
|
Jun. 28, 2009
Mortgage-backed and Asset-backed Securities [Member]
|
Jun. 26, 2011
Equity Securities [Member]
|
Jun. 27, 2010
Equity Securities [Member]
|
Jun. 28, 2009
Equity Securities [Member]
|
Jun. 26, 2011
Equity Securities Intent and Ability to Hold Investment Indefinitely [Member]
|
Jun. 27, 2010
Equity Securities Intent and Ability to Hold Investment Indefinitely [Member]
|
Sep. 26, 2010
Equity Securities Issuer Initiated Reorganization [Member]
|
Jun. 27, 2010
Equity Securities Issuer Initiated Reorganization [Member]
|
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Schedule of Available-for-sale Securities [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized Costs | Â | Â | Â | $ 185,316,000 | $ 308,469,000 | $ 55,964,000 | $ 129,352,000 | $ 308,469,000 | $ 13,095,000 | $ 38,162,000 | $ 12,501,000 | $ 20,043,000 | $ 9,089,000 | $ 594,000 | $ 9,030,000 | Â | Â | Â | Â | $ 12,963,000 | $ 14,397,000 | Â | Â | Â | Â | Â |
Gross Unrealized Gain | Â | Â | Â | 225,000 | 919,000 | 51,000 | 174,000 | 919,000 | 230,000 | 5,596,000 | 43,000 | 378,000 | 2,689,000 | 187,000 | 2,529,000 | Â | Â | Â | Â | 9,473,000 | 3,791,000 | Â | Â | Â | Â | Â |
Gross Unrealized Loss | Â | Â | Â | 0 | (4,000) | 0 | 0 | (4,000) | 0 | (7,000) | 0 | (3,000) | 0 | 0 | (4,000) | Â | Â | Â | Â | 0 | 0 | Â | Â | Â | Â | Â |
Net Unrealized Gain | Â | Â | Â | 225,000 | 915,000 | 51,000 | 174,000 | 915,000 | 230,000 | 5,589,000 | 43,000 | 375,000 | 2,689,000 | 187,000 | 2,525,000 | Â | Â | Â | Â | 9,473,000 | 3,791,000 | Â | Â | Â | Â | Â |
Market Value | Â | Â | Â | 185,541,000 | 309,384,000 | 56,015,000 | 129,526,000 | 309,384,000 | 13,325,000 | 43,751,000 | 12,544,000 | 20,418,000 | 11,778,000 | 781,000 | 11,555,000 | Â | Â | Â | Â | 22,436,000 | 18,188,000 | Â | Â | Â | Â | Â |
Available-for-sale securities, additional disclosures [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Number of investments in publicly traded foreign companies | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 3 | Â | Â | Â | Â | Â | Â |
Fair value of put option held on one investment | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2,800,000 | Â | Â | Â | Â | Â | Â |
Dividend income from common stock investments | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 100,000 | 100,000 | 300,000 | Â | Â | Â | Â |
Other-than-temporary impairments | 1,400,000 | 3,400,000 | 39,200,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 900,000 | 33,300,000 | 1,400,000 | 2,500,000 | 5,900,000 | 900,000 | 1,200,000 | 500,000 | 1,300,000 |
Number of investments for which other-than-temporary impairment was recognized | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2 | 2 | Â | Â | Â | Â | Â |
Stated maturity, minimum (in years) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 1 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stated maturity, maximum (in years) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 27 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expected maturity, minimum (in months) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 3 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Expected maturity, maximum (in years) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 20 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Continuous unrealized loss position, market value [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Market value, securities held in a loss position for less than 12 months | Â | 27,245,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 27,245,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Market value, securities held in a loss position for 12 months or more | Â | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Market value, total in a loss position | Â | 27,245,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 27,245,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Continuous unrealized loss position, gross unrealized losses [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Gross unrealized losses, securities held in a loss position for less than 12 months | Â | (7,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (7,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Gross unrealized losses, securities held in a loss position for 12 months or more | Â | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Gross unrealized losses, total in a loss position | Â | (7,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (7,000) | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, by contractual maturity [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, Due in 1 year or less | 185,316,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, Due in 1-2 years | 12,501,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, Due in 2-5 years | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, Due after 5 years | 594,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amortized cost, Total investments | 198,411,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, by contractual maturity [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, Due in 1 year or less | 185,541,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, Due in 1-2 years | 12,544,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, Due in 2-5 years | 0 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, Due after 5 years | 781,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Estimated market value, Total investments | 198,866,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Gross realized gains on available-for-sale securities investments | 8,200,000 | 6,500,000 | 5,800,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Gross realized losses on available-for-sale securities investments | 300,000 | 0 | 9,200,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Amount reclassified from accumulated other comprehensive income to earnings | $ 5,600,000 | $ 1,800,000 | $ 37,100,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
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Derivative Financial Instruments
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Derivative Financial Instruments [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | 5. Derivative Financial Instruments The Company is exposed to financial market risks, including fluctuations in interest rates, foreign currency exchange rates and market value risk related to its investments. The Company uses derivative financial instruments primarily to mitigate foreign exchange rate risks but also as part of its strategic investment program. In the normal course of business, the Company also faces risks that are either non-financial or non-quantifiable. Such risks principally include country risk, credit risk and legal risk, and are not discussed or quantified in the following analyses. In prior periods, the Company has designated certain derivatives as fair value hedges or cash flow hedges qualifying for hedge accounting treatment. As of June 26, 2011, however, the Company’s only derivatives were currency forward contracts which were not designated as accounting hedges, a put option on one of the Company’s strategic investments and a call option on the equity of a private domestic company (See Note 4, “Investments”). The private domestic company is a development stage entity and, as such, the Company is unable to determine the fair value the call option at this time. Interest Rates The Company is subject to interest rate risk through its investments. The objectives of the Company’s investments in debt securities are to preserve principal and maintain liquidity while maximizing returns. To achieve these objectives, the returns on the Company’s investments in short-term debt generally will be compared to yields on money market instruments such as U.S. Commercial Paper programs, LIBOR or U.S. Treasury Bills. Investments in long-term debt securities will be generally compared to yields on comparable maturity of U.S. Treasury obligations, investment grade corporate instruments with an equivalent credit rating or an aggregate benchmark index. The Company had no outstanding interest rate derivatives as of June 26, 2011. Foreign Currency Exchange Rates The Company generally hedges the risks of foreign currency-denominated repetitive working capital positions with offsetting foreign currency denominated exchange transactions, and currency forward contracts or currency swaps. Transaction gains and losses on these foreign currency-denominated working capital positions are generally offset by corresponding gains and losses on the related hedging instruments, usually resulting in reduced net exposure. The aggregate foreign currency gains (losses) included in net income for the fiscal years ending June 26, 2011, June 27, 2010 and June 28, 2009 were $(1.2) million, $(1.9) million and $(0.7) million, respectively. A significant amount the Company’s revenues, expense, and capital purchasing transactions are conducted on a global basis in several foreign currencies. At various times, the Company has currency exposure related to the British Pound Sterling, the Euro and the Japanese Yen. For example, in the United Kingdom, the Company has a sales office and a semiconductor wafer fabrication facility with revenues primarily in U.S. Dollars and Euros and expenses in British Pounds Sterling and U.S. Dollars. The Company does not hedge its revenues and expenses against changes in foreign currency exchange rates as it does not perceive the net risk of changes to translated revenues and expenses from changes in exchange rates as significant enough at this time to justify hedging. To protect against exposure to currency exchange rate fluctuations on non-functional currency payables and receivables, the Company has established balance sheet transaction risk hedging program. This risk management program generally uses currency forward contracts. These currency forward contracts are not designated as hedging instruments for accounting purposes. Through these hedging programs the Company seeks to reduce, but does not always entirely eliminate, the impact of currency exchange rate movements. In May 2006, the Company entered into a forward contract for the purpose of reducing the effect of exchange rate fluctuations on forecasted inter-company purchases by its Japan subsidiary. The Company had designated the forward contract as a cash flow hedge. Under the terms of the forward contract, the Company was required to exchange 507.5 million Yen for $5.0 million on a quarterly basis starting in June 2006 and expiring in March 2011. In December 2007, the Company terminated the forward contract and received $2.8 million of cash as part of the settlement. The net gain at the forward contract’s termination date was reported in accumulated other comprehensive income. The Company planned to recognize the gain over the originally specified time period. The Company concluded that beginning in the fourth quarter of fiscal year 2009, the May 2006 forward contract in Yen would not have been an effective hedge. As a result of this ineffectiveness in the hedge on a retroactive basis, the Company reassessed the effectiveness of the hedge on a prospective basis and determined that the hedge was ineffective on a prospective basis. As a result of the determination that the hedge was ineffective, the Company recognized the remaining unamortized balance of the gain of $1.6 million in other income during the first three months of fiscal year 2010. In October 2004, the Company’s Japan subsidiary entered into a currency swap agreement to hedge intercompany payments in U.S. Dollars. The transaction commencement date was in March 2005 and the termination date was in April 2011. Each month, the Company exchanged JPY 9,540,000 for $100,000. When the applicable currency exchange rate is less than or equal to 95.40, the Company exchanged JPY 18,984,600 for $199,000. For its balance sheet transaction risk hedging program, the Company had approximately $77.1 million and $58.3 million in notional amounts of forward contracts not designated as accounting hedges outstanding at June 26, 2011 and June 27, 2010, respectively. Net realized and unrealized foreign-currency gains (losses) related to foreign currency forward contracts not designated as accounting hedges recognized in earnings, as a component of other expense, were $(4.7) million and $1.3 million for the fiscal years ended June 26, 2011 and June 27, 2010, respectively. In the normal course of business, the Company also faces risks that are either non-financial or non-quantifiable. Such risks principally include country risk, credit risk and legal risk and are not discussed or quantified in the preceding analysis. At June 26, 2011, the fair value carrying amount of the Company’s derivative instruments were as follows (in thousands):
At June 27, 2010, the fair value carrying amount of the Company’s derivative instruments were as follows (in thousands):
The gain or (loss) recognized in earnings for the fiscal years ended June 26, 2011 and June 27, 2010 was comprised of the following (in thousands):
Fair Value The following table presents derivative instruments measured at fair value on a recurring basis as of June 26, 2011 (in thousands):
The following table presents derivative instruments measured at fair value on a recurring basis as of June 27, 2010 (in thousands):
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Investments (Tables)
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Jun. 26, 2011
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Jun. 27, 2010
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Investments, Debt and Equity Securities [Abstract] | Â | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Available-for-Sale Securities | Available-for-sale securities as of June 26, 2011 are summarized as follows (in thousands):
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Available-for-sale securities as of June 27, 2010 are summarized as follows (in thousands):
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Fair Value and Gross Unrealized Losses Related to Available-for-sale Securities | Â | The following table summarizes the fair value and gross unrealized losses related to available-for-sale investments, aggregated by type of investment and length of time that individual securities have been held as of June 27, 2010. The unrealized loss position is measured and determined at each fiscal year end (in thousands):
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Amortized Cost and Estimated Fair Value of Investments by Contractual Maturity | The amortized cost and estimated fair value of investments at June 26, 2011, by contractual maturity, are as follows (in thousands):
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Investments Measured at Fair Value on a Recurring Basis | The following tables present the balances of investments measured at fair value on a recurring basis (in thousands):
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The following tables present the balances of investments measured at fair value on a recurring basis (in thousands):
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Business, Basis of Presentation and Summary of Significant Accounting Policies, Change in Accounting Estimate, Stock Repurchase Program, and Allowances (Details) (USD $)
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3 Months Ended | 12 Months Ended | ||||
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Sep. 26, 2010
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Jun. 26, 2011
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Jun. 27, 2010
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Jun. 28, 2009
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Jul. 20, 2010
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Oct. 27, 2008
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Stock Repurchase Program [Abstract] | Â | Â | Â | Â | Â | Â |
Authorized amount of stock repurchase program, prior to revision | Â | Â | Â | Â | Â | $ 100,000,000 |
Additional amount authorized for stock repurchase program | Â | Â | Â | Â | 50,000,000 | Â |
Revised authorized amount for stock repurchase program | 150,000,000 | Â | Â | Â | Â | Â |
Number of shares repurchased during the year (in shares) | Â | 1,433,318 | 1,284,281 | 1,909,649 | Â | Â |
Cost of shares repurchased during the year | Â | 32,574,000 | 25,039,000 | 23,632,000 | Â | Â |
Number of shares repurchased to date (in shares) | Â | 4,627,248 | 3,193,930 | Â | Â | Â |
Cost of shares repurchased to date | Â | 81,245,000 | 48,671,000 | Â | Â | Â |
Allowances [Abstract] | Â | Â | Â | Â | Â | Â |
Allowances for doubtful accounts and pricing disputes | Â | $ 2,424,000 | $ 3,725,000 | Â | Â | Â |
Change in Accounting Method Accounted for as Change in Estimate [Member]
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Change In Accounting Estimate [Abstract] | Â | Â | Â | Â | Â | Â |
Description of change in accounting estimate | Â | Effective December 27, 2010, the Company changed its depreciation method for certain fabrication equipment from the units-of-production method to the straight-line method. The Company considers this change of depreciation method a change in accounting estimate affected by a change in accounting principle. This change in estimate is accounted for prospectively as of the beginning of the third quarter of fiscal year 2011. While the Company believes the units-of-production method, as a function of usage, reasonably reflects the matching of costs and revenues, it requires considerable effort to monitor and track the usage of certain fabrication equipment consistently across all fabrication facilities. The Company believes the straight-line method of depreciation represents a better estimate of the use of the equipment over its productive life and better reflects the pattern of economic consumption. Additionally, the Company believes the new practice is consistent with the predominant industry practice. | Â | Â | Â | Â |
Financial effect of change in accounting estimate | Â | The effects of the change described above to net income and earnings per share was immaterial for the fiscal year ended June 26, 2011. | Â | Â | Â | Â |
Business, Basis of Presentation and Summary of Significant Accounting Policies, Goodwill and Other Intangible Assets (Details) (USD $)
Share data in Millions, unless otherwise specified |
12 Months Ended | ||
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Jun. 26, 2011
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Jun. 26, 2011
Privately Held Domestic Company [Member]
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Jul. 30, 2010
Privately Held Domestic Company [Member]
|
|
Goodwill and Other Intangible Assets [Abstract] | Â | Â | Â |
Discount rate considered for determining discounted cash flows (in hundredths) | 14.00% | Â | Â |
Acquired intangible assets | $ 28,800,000 | Â | Â |
Business acquisition [Abstract] | Â | Â | Â |
Preferred stock acquired (in shares) | Â | 25.00 | 25.00 |
Purchase price of acquisition | Â | Â | 9,000,000 |
Purchase price allocated to intellectual property intangible assets | Â | Â | 7,500,000 |
Purchase price allocated to preferred stock | Â | Â | $ 1,500,000 |
Business, Basis of Presentation and Summary of Significant Accounting Policies (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Jun. 27, 2010
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Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | Â | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest (Income) Expense, Net | Interest (income) expense, net, for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 was as follows (in thousands):
No interest was capitalized for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009. |
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Changes in Operating Assets and Liabilities | Components of the changes of operating assets and liabilities for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 were comprised of the following (in thousands):
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Supplemental Disclosures of Cash Flow Information | Supplemental disclosures of cash flow information (in thousands):
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Financial Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis | Financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of June 26, 2011 (in thousands):
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Financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of June 27, 2010 (in thousands):
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Reconciliation of the Beginning and Ending Balance of Items Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs | The following tables provide a reconciliation of the beginning and ending balance of items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the fiscal year ended June 26, 2011 (in thousands):
At the beginning of the second quarter of fiscal year 2011, equity investments in a private domestic company were transferred out of Level 3 securities. These equity investments, after their initial valuation, have been accounted for on the cost method as they do not have readily determinable fair values. |
The following tables provide a reconciliation of the beginning and ending balance of items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the fiscal year ended June 27, 2010 (in thousands):
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Cash, Restricted Cash, Cash Equivalents and Investments | Cash, restricted cash, cash equivalents and investments as of June 26, 2011 and June 27, 2010 are summarized as follows (in thousands):
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Inventories | Inventories at June 26, 2011 and June 27, 2010, were comprised of the following (in thousands):
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Property, Plant and Equipment | Property, plant and equipment are stated at cost. Any gain or loss on retirement or disposition is included in operating expenses. Depreciation is provided using the straight-line method based on the estimated useful lives of the assets, ranging from three to 40 years. Depreciation and amortization expense for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 was $75.3 million, $68.4 million and $63.8 million, respectively. Property, plant and equipment at June 26, 2011 and June 27, 2010 was comprised of the following (in thousands):
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Acquisition-Related Intangible Assets | At June 26, 2011 and June 27, 2010, acquisition-related intangible assets included the following (in thousands):
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Estimated Amortization Expense | As of June 26, 2011, the following table represents the total estimated amortization of intangible assets for the next five succeeding fiscal years (in thousands):
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Goodwill | The carrying amount of goodwill by ongoing segment as of June 26, 2011 and June 27, 2010 was as follows (in thousands):
As of June 26, 2011, $17.2 million of goodwill is deductible for income tax purposes of which $3.0 million was deducted in the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively. The changes in the carrying amount of goodwill for the fiscal years ended June 26, 2011 and June 27, 2010 were as follows (in thousands):
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Other Accrued Expenses | Other accrued expenses at June 26, 2011 and June 27, 2010 were comprised of the following (in thousands):
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Changes in Warranty Reserve | The following table details the changes in the Company’s warranty reserve for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, which is included in other accrued liabilities in the schedule above (in thousands):
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Other Long-Term Liabilities | Other long-term liabilities at June 26, 2011 and June 27, 2010 were comprised of the following (in thousands):
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Accumulated Other Comprehensive (Loss) Income | The components of accumulated other comprehensive (loss) income as of June 26, 2011, June 27, 2010, and June 28, 2009 were as follows (in thousands):
|
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Income Taxes
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Income Tax Disclosure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 10. Income Taxes Income (loss) before income taxes for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is as follows (in thousands):
The (benefit from) provision for income taxes for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is as follows (in thousands):
The tax benefit from stock-based compensation reduced current or future income taxes payable for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 by $1.4 million, $0.0 million, and $0.0 million, respectively. The Company’s effective tax rate on pretax income (loss) differs from the U.S. federal statutory tax rate for the fiscal years June 26, 2011, June 27, 2010 and June 28, 2009, as follows:
The major components of the net deferred tax assets (liabilities) as of June 26, 2011 and June 27, 2010 are as follows (in thousands):
Realization of deferred tax assets is dependent upon generating sufficient taxable income, carryback of losses, offsetting deferred tax liabilities, and the availability of tax planning strategies. In fiscal year 2011, the Company maintained valuation allowances against most of its net deferred tax assets in the U.S. The Company also determined that the valuation allowance established against its deferred tax assets in the U.K during fiscal year 2009 should be partially released in fiscal year 2011, based upon a change in its activities which provides support to rely on forecasted income, with the balance remaining unreleased. The Company evaluates its net deferred income tax assets quarterly to determine whether it is “more likely than not” the assets will be realized. As cumulative pre-tax losses for the current and prior two years in the Company's U.S. federal consolidated group constitute significant negative evidence, positive evidence of equal or greater significance is needed at a minimum to overcome that negative evidence before a tax benefit is recognized for deductible temporary differences and loss carryforwards. The Company did examine the four sources which allow the realization of deferred tax assets. They are: carrybacks, reversals of existing temporary differences, tax planning strategies, and future taxable income exclusive of reversals of existing temporary differences. Of the four sources, loss carrybacks were the only meaningful one available to support the Company's ability to realize the tax benefit of its remaining U.S. federal deferred tax assets. The Company determined that it would not carryback this taxable loss. Therefore, the Company maintained a full valuation allowance against its U.S. federal deferred tax assets. However, the Company determined that it could release a portion of its U.S. valuation allowance against its California deferred tax assets after the Company, as a California combined filing group, no longer recorded cumulative pre-tax losses for the current and prior two years. The Company concluded that it was more likely than not that $10.3 million of California deferred tax assets would be realized based on all evidence available, resulting in a tax benefit for the current fiscal year. With regards to the Company’s U.K. Newport, Wales subsidiary, the Company completed certain intercompany transactions and intercompany reorganizations during fiscal year 2011. As a result, the Company released a portion of its valuation allowance against its deferred tax assets in the U.K. based on all the available evidence including forecasted future taxable income for the U.K. entity. The Company concluded that $9.6 million of valuation allowance could be released to benefit the current tax provision as the associated deferred tax assets would be more likely than not realized. In addition, the Company reduced its deferred tax assets and associated valuation allowance in the U.K. by $18.4 million due to the taxable income for fiscal year 2011. Furthermore, the Company recorded a deferred charge of $14.6 million in connection with the aforementioned reduction of its deferred tax assets in the U.K. which is offset by the associated valuation allowance, and both balances were reduced by $0.8 million in fiscal year 2011. In fiscal year 2011, the Company completed the Technology Acquisition (See Note 2, “Business Acquisitions”). As a result of this business combination, the Company recorded $0.2 million of both deferred tax assets and deferred tax liabilities including any measurement period adjustment. In fiscal year 2011, the Company completed its acquisition of CHiL Semiconductor Corporation (See Note 2, “Business Acquisitions”). As a result of this business combination, the Company recorded $16.7 million, $6.7 million, $10.1 million, $0.2 million and $0.2 million of deferred tax assets, valuation allowances, deferred tax liabilities, additional goodwill, and other liabilities, respectively, including measurement period adjustments. The Company also expects to utilize the acquired federal net operating losses of $31.7 million and certain credits of $1.1 million pursuant to Sections 382 and 383 of the U.S. Internal Revenue Code, and the acquired Massachusetts operating losses of $0.1 million and certain credits of $0.1 million pursuant to applicable Massachusetts tax laws. During fiscal year 2009, the Company filed amended U.S. federal income tax returns and claimed a refund. Of this refund, the Company received $18.9 million during fiscal year 2010, and $5.2 million during fiscal year 2011. The Company does not expect any additional refund associated with the aforementioned amended U.S. federal income tax returns. During fiscal year 2010, the Company filed amended U.S. state income tax returns and voluntary disclosure agreements and paid approximately $1.3 million in taxes and related interest and penalties to various U.S. state taxing authorities in connection with uncertain tax positions recorded for fiscal years 2001 through 2009. During fiscal year 2011, the Company filed additional amended U.S. state income tax returns and voluntary disclosure agreements and paid $0.8 million in taxes and related interest and penalties as the final part of the state tax return filing process. The Company would not expect to file any additional amended state income tax returns or voluntary disclosure agreements, or make any additional material payments associated with the aforementioned amended U.S. state income tax returns. During the three months ended September 26, 2010, the statutory tax rate in the U.K. was reduced from 28 percent to 27 percent effective April 1, 2011. As a result, the Company reported a $0.2 million impact due to this rate reduction on its deferred tax assets in the U.K in Q1 of fiscal year 2011. In addition, the Company reduced its deferred tax assets with a full valuation allowance in the U.K. by approximately $2.4 million as a result of the reduced statutory rate. Subsequent to the balance sheet date of June 26, 2011 and prior to the issuance of the consolidated financial statements, the statutory tax rate in the U.K. was reduced from 27 percent to 26 percent for calendar year 2011, and further reduced to 25 percent for calendar year 2012, effective April 1, 2011 retrospectively. The Company concluded that the overall impact on the tax provision would be $1.6 million in fiscal year 2012. In addition, the Company expects to reduce the U.K. deferred tax assets and valuation allowance by $3.4 and $2.7 million, respectively, as a result of the reduced statutory rate. Both the overall impact on the tax provision and the reduction of the U.K. deferred tax assets and valuation allowance will be reported on the financial report for the first fiscal quarter of 2012 during which the reduced statutory rate becomes law. During fiscal year 2011, the Company was granted certain incentives by the Singapore Economic Development Board. As a result, the Company started to operate under a tax holiday in Singapore, effective from December 27, 2010 through December 26, 2020. The tax holidays are conditional upon the Company meeting certain employment and investment thresholds. The impact of the Singapore tax holidays decreased the Singapore subsidiary’s deferred taxes by $2.0 million in fiscal year 2011 which benefitted the tax provision. The benefit of the tax holidays on net income per share (diluted) was $0.03 for fiscal year 2011. The Company operated in multiple foreign jurisdictions with lower statutory tax rates, and its operation in Singapore had the most significant impact on the effective tax rate for the fiscal year 2011. In addition to the $2.0 million benefit due to the tax holiday, the Company was subject to an effective tax rate of 15 percent in Singapore for fiscal year 2011. A reconciliation of unrecognized tax benefits from June 28, 2009 to June 26, 2011 is as follows (in thousands):
As of June 26, 2011, the liability for income tax associated with uncertain tax positions was $17.1 million. If recognized, the liability associated with uncertain tax positions would result in a benefit to income taxes on the consolidated statement of operations of $11.2 million which would reduce the Company’s future effective tax rate. For fiscal year 2011, $2.9 million of increases to uncertain tax positions, if recognized, would affect the effective tax rate; however, it would be in the form of long-term deferred tax assets which would attract a full valuation allowance. The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. The Company had accrued interest and penalties related to uncertain tax positions as of June 26, 2011 and June 27, 2010 of $2.9 million and $4.2 million, respectively. The change in interest and penalties during fiscal year 2011 was primarily the result of the lapsing of certain foreign jurisdictions’ statute of limitations. The change in interest and penalties during fiscal year 2010 was primarily the result of a favorable ruling from the Joint Committee on Taxation for prior year refund claims, the filing of certain state tax returns for fiscal years 2005 – 2009, amended state tax returns for fiscal years 2001 – 2007, and the lapsing of certain foreign jurisdictions’ statute of limitations. The uncertain tax positions are expected to increase by $2.5 million during the next twelve months primarily due to certain domestic positions expected to be taken and increases in uncertain tax position in certain foreign tax jurisdictions, offset by small decreases due to lapses of statute of limitations in certain foreign tax jurisdictions. The Company anticipates that there will be other changes to the unrecognized tax benefit associated with uncertain tax positions due to the expiration of statutes of limitation, payment of tax on amended returns, audit settlements and other changes in reserves. However, due to the uncertainty regarding the timing of these events, a current estimate of the range of other changes that may occur within the next twelve months cannot be made. The Company’s major tax jurisdictions are U.S. Federal, California, Japan, United Kingdom, Singapore, Germany, Hong Kong and Mexico. In the ordinary course of business, the Company is subject to examination by taxing authorities. As of June 26, 2011, the Company is no longer subject to U.S. federal income tax examinations for years before the fiscal year ended June 28, 2009; California income tax examinations before the fiscal year ended July 2, 2006; Japan income tax examinations before the fiscal year ended June 30, 2006; United Kingdom before the fiscal year ended July 2, 2006; Germany tax examinations before the fiscal year ended July 2, 2006; Singapore tax examination for the year of assessment 2007 and before; Mexico tax examination for the assessment year ended December 31, 2001; and Hong Kong profits tax examinations before the assessment year ended March 31, 2005. As a matter of course, the Company is regularly audited by various taxing authorities. Unfavorable settlement of any particular issue may require the use of cash. Favorable resolution may be recognized as a reduction to the effective tax rate in the year of resolution or a reduction of goodwill if it relates to purchased tax liabilities. The Company’s interest and penalties associated with income taxes are included in both accrued income taxes and long-term income taxes payable, as appropriate. The Company has federal, state and foreign net operating loss carryforwards. The federal net operating loss of $25.7 million will expire in 2029 through 2032, and the California net operating loss of $85.0 million will expire in 2015 through 2029. The foreign net operating losses of $6.8 million have no expiration. The Company has foreign tax credits of $45.0 million that will expire from 2019 through 2021. The Company also has federal research credits of $13.1 million that will expire in 2026 thru 2032, and California research credits of $39.7 million that have no expiration. As of June 26, 2011, U.S. income taxes have not been provided on approximately $79.1 million of undistributed earnings of foreign subsidiaries since those earnings are considered to be invested indefinitely. Determination of the amount of unrecognized deferred tax liabilities for temporary differences related to investments in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. There has been a change in the Company’s position on undistributed earnings regarding the pending liquidation of a foreign subsidiary into the U.S. consolidated group. The Company has not recorded a deferred tax liability on any potential gain as the earnings and profits of the subsidiary had been recognized as U.S. income in previous periods. Pursuant to Sections 382 and 383 of the U.S. Internal Revenue Code, the utilization of operating loss carryforward and other tax attributes may be subject to limitations if certain ownership changes occur during a three-year testing period. The Company does not believe an ownership change has occurred as of June 26, 2011 that would limit the Company’s utilization of any operating loss carryforward or other tax attributes. |
Business, Basis of Presentation and Summary of Significant Accounting Policies
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Jun. 26, 2011
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Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business, Basis of Presentation and Summary of Significant Accounting Policies | 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business International Rectifier Corporation (“IR” or the “Company”) designs, manufactures and markets power management semiconductors. Power management semiconductors address the core challenges of power management, power performance and power conservation, by increasing system efficiency, allowing more compact end-products, improving features on electronic devices, and prolonging battery life. The Company’s products include power metal oxide semiconductor field effect transistors (“MOSFETs”), high voltage analog and mixed signal integrated circuits (“HVICs”), low voltage analog and mixed signal integrated circuits (“LVICs”), digital integrated circuits (“ICs”), radiation-resistant (“RAD-Hard”) power MOSFETs, insulated gate bipolar transistors (“IGBTs”), high reliability DC-DC converters, digital controllers and automotive products packages. Basis of Presentation and Consolidation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries, which are located in North America, Europe, and Asia. Intercompany balances and transactions have been eliminated in consolidation. Reclassification The Company has reclassified net settlement of restricted stock units from cash flow from operating activities to cash flow from financing activities in the consolidated statement of cash flow for the prior year periods to conform to current year presentation. Prior period amounts have been adjusted to conform to current year presentation. Fiscal Year The Company operates on a 52-53 week fiscal year with the fiscal year ending on the last Sunday in June. Fiscal year 2011 consisted of 52 weeks ending June 26, 2011, fiscal year 2010 consisted of 52 weeks ending June 27, 2010 and fiscal year 2009 consisted of 52 weeks ending June 28, 2009. Fiscal quarters consist of 13 weeks ending on the last Sunday of the calendar quarter. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results may differ from those estimates. Subsequent Events The Company evaluates events subsequent to the end of the fiscal year through the date the financial statements are filed with the Securities and Exchange Commission for recognition or disclosure in the consolidated financial statements. Events that provide additional evidence about material conditions that existed at the date of the balance sheet are evaluated for recognition in the consolidated financial statements. Events that provide evidence about conditions that did not exist at the date of the balance sheet but occurred after the balance sheet date are evaluated for disclosure in the notes to the consolidated financial statements. Revenue Recognition and Allowances Revenue is recognized when there is persuasive evidence of an arrangement, the price to the buyer is fixed or determinable, collection is reasonably assured, and delivery or performance of service has occurred. The Company recognizes revenue upon shipment or upon delivery, depending on specific contractual terms and/or shipping terms with the customer. If title transfer and risk of loss are addressed explicitly in a customer contract or by reference to the standard terms and conditions, those stated terms determine whether the recognition of revenue on product sales to that customer shall be upon either shipment or delivery. If the contract is silent and lacks reference to the Company's standard terms and conditions, and barring other contrary information, transfer of title and risk of loss will follow the historical shipping terms for that customer. If revenue is to be recognized upon delivery, such delivery date is tracked through information provided by the third party shipping company used by the Company to deliver the product to the customer. Generally, the Company recognizes revenue on sales to distributors using the "sell in" method (i.e. when product is sold to the distributor) rather than the "sell through" method (i.e. when the product is sold by the distributor to the end user). Certain distributors and other customers have limited rights of return (including stock rotation rights) and/or are entitled to price protection, where a rebate credit may be provided to the customer if the Company lowers its price on products held in the distributor's inventory. Additionally, in certain limited cases, the Company may pre-approve a credit to a distributor to facilitate a particular sale by the distributor to an end customer. The Company estimates and establishes allowances for expected future product returns at the time of sale. The Company records a reduction in revenue for estimated future product returns and future credits to be issued to the customer in the period in which revenues are recognized, and for future credits to be issued in relation to price protection at the time the Company makes changes to its distributor price book. The estimate of future returns and credits is based on historical sales returns, analysis of credit memo data, and other factors known at the time of revenue recognition. The Company monitors product returns and potential price adjustments on an ongoing basis. The Company also maintains consignment inventory arrangements with certain of its customers. Pursuant to these arrangements, the Company delivers products to a customer or a designated third party warehouse based upon the customer's projected needs, but does not recognize revenue unless and until the customer reports that it has removed the product from the warehouse to incorporate into its end products, assuming all the other revenue recognition criteria are met. The Company recognizes royalty revenue in accordance with agreed upon terms when performance obligations are satisfied, the amount is fixed or determinable, and collectability is reasonably assured. The amount of royalties recognized is often calculated based on the licensees' periodic reporting to the Company. Any upfront payments are recognized as revenue only if there is no continuing performance obligation when the license commences and collectability is reasonably assured. Otherwise, revenue is amortized over the life of the license or according to performance obligations outlined in the license agreement. If the Company’s customers’ contracts contain substantive acceptance provisions the Company recognizes revenue in accordance with the specific contract acceptance provisions in these circumstances. Sales and other taxes directly imposed on revenue-producing transactions are reported on a net (excluded from revenue) basis. Shipping Costs Outbound customer shipping costs are expensed as incurred and are included in selling, general and administrative expense. The expense for outbound customer shipments for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 was $8.2 million, $6.8 million, and $6.0 million, respectively. Advertising Costs Advertising costs are expensed as incurred and are included in selling, general and administrative expense. Advertising expense for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 was $2.8 million, $3.0 million and $3.0 million, respectively. Research and Development Costs Research and development (“R&D”) costs, including salaries, departmental general overhead, and allocated expenses, are expensed as incurred. Environmental Costs The Company accrues for costs associated with environmental remediation obligations when such losses are probable and reasonably estimable and adjusts its estimates as new facts and circumstances come to its attention. Costs incurred to investigate and remediate contaminated sites are expensed when these costs are identified and estimable and are not discounted to their present value. Interest (Income) Expense, Net Interest (income) expense, net, for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 was as follows (in thousands):
No interest was capitalized for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009. Income Taxes Deferred income taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted rates in effect during the year in which the differences are expected to reverse. This process requires estimating both the Company’s geographic mix of taxable income, and its current tax exposures in each jurisdiction where it operates. These estimates involve complex issues, require extended periods of time to resolve, and require the Company to make judgments, such as anticipating the positions that it will take on tax returns prior to actually preparing the returns and the outcomes of disputes with tax authorities. The Company is also required to measure and record deferred tax assets and liabilities and estimate the period of time over which the deferred tax assets will be realized. Realization of deferred tax assets is dependent upon generating sufficient taxable income, carryback of losses offsetting deferred tax liabilities, and the availability of tax planning strategies. Valuation allowances are established for the deferred tax assets that the Company believes do not meet the “more likely than not” criteria. Judgments regarding future taxable income may be revised due to changes in market conditions, tax laws, or other factors. If the Company’s assumptions and estimates change in the future, the valuation allowances established may be increased, resulting in increased income tax expense. Conversely, if the Company is ultimately able to use all or a portion of the deferred tax assets for which a valuation allowance has been established, the related portion of the valuation allowance will be released to reduce income tax expense or goodwill, credit other comprehensive income, or credit additional paid-in capital, as applicable. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities recorded in the Company’s tax provision. The Company recognizes any interest and penalties associated with income taxes in income tax expense. As of June 26, 2011, U.S. income taxes have not been provided on approximately $79.1 million of undistributed earnings of foreign subsidiaries since those earnings are considered to be invested indefinitely. Determination of the amount of unrecognized deferred tax liabilities for temporary differences related to investments in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. The Company recognizes certain tax liabilities for anticipated tax audit findings in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which additional taxes would be due. If the audit findings result in actual taxes owed more or less than what the Company had anticipated, its income tax expense would be increased or decreased, accordingly, in the period of the determination. Net Income (Loss) per Common Share Net income (loss) per common share—basic is computed using the two-class method with net income (loss) available to common stockholders (the numerator) divided by the weighted average number of common shares outstanding (the denominator) during the period. In general, the computation of net (loss) income per common share—diluted is similar to the computation of net income per common share—basic except that the denominator is increased to include the number of additional common shares that would have been outstanding upon the exercise of stock options and vesting of restricted stock units using the treasury stock method. Under the treasury stock method, the Company reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options assumed to be exercised and restricted stock units vested, and related unrecognized compensation. Net income available to common stockholders is determined using the two-class method which requires that net income be allocated between the weighted average common shares outstanding and the weighted average participating securities outstanding for the period. For fiscal years 2011, 2010, and 2009, the Company’s participating securities are the unvested, outstanding restricted stock units (“RSUs”) that have the right to receive dividend equivalents. For periods with net losses, participating securities are anti-dilutive and are not allocated net losses. Statements of Cash Flows Components of the changes of operating assets and liabilities for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 were comprised of the following (in thousands):
Supplemental disclosures of cash flow information (in thousands):
Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels (with Level 3 being the lowest) defined as follows:
Financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of June 26, 2011 (in thousands):
Financial assets and liabilities measured and recorded at fair value on a recurring basis in the Company’s consolidated balance sheet as of June 27, 2010 (in thousands):
The fair value of investments, derivatives, and other assets and liabilities are disclosed in Notes 2, 4, 5, and 7, respectively. Cash and cash equivalents included $16.0 million of commercial paper as of June 26, 2011 and $26.6 million of commercial paper and $0.6 million of corporate notes as of June 27, 2010. For the fiscal year ended June 26, 2011, the Company measured at fair value the assets and liabilities acquired in (i) the acquisition of CHiL Semiconductor Corporation, (ii) the acquisition of tangible personal and intellectual property of a privately held domestic corporation and (iii) the purchase of intellectual property, including patent and patent rights, as well as 25.0 million shares of preferred stock, from another privately held domestic company as described in Note 2 on a nonrecurring basis using significant unobservable inputs or Level 3 inputs. As of June 27, 2010, the Company had no significant measurements of assets or liabilities at fair value on a nonrecurring basis. For the fiscal year ended June 26, 2011, for each class of assets and liabilities, there were no transfers between those valued using quoted prices in active markets for identical assets (Level 1) and those valued using significant other observable inputs (Level 2). The Company determines at the end of each reporting period whether a given financial asset or liability is valued using Level 1, Level 2 or Level 3 inputs. As of June 26, 2011, the Company’s investments fair valued using Level 2 inputs included commercial paper, corporate debt securities and U.S. government agency obligations. These assets and liabilities were valued primarily using an independent valuation firm based on the market approach using various inputs such as trade data, broker/dealer quotes, observable market prices for similar securities and other available data. The Company also fair values its foreign currency forward contracts using Level 2 inputs based on readily observable market parameters for all substantial terms of derivatives. Level 3 Valuations The following tables provide a reconciliation of the beginning and ending balance of items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the fiscal year ended June 26, 2011 (in thousands):
At the beginning of the second quarter of fiscal year 2011, equity investments in a private domestic company were transferred out of Level 3 securities. These equity investments, after their initial valuation, have been accounted for on the cost method as they do not have readily determinable fair values. The following tables provide a reconciliation of the beginning and ending balance of items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the fiscal year ended June 27, 2010 (in thousands):
When at least one significant valuation model assumption or input used to measure the fair value of financial assets or liabilities is unobservable in the market, they are deemed to be measured using Level 3 inputs. These Level 3 inputs may include pricing models, discounted cash flow methodologies or similar techniques where at least one significant model assumption or input is unobservable. The Company uses Level 3 inputs to value financial assets that include a non-transferable put option on a strategic investment and a liability for an acquisition-related contingent consideration arrangement. Level 3 inputs are also used to value investment securities that include certain mortgage-backed securities and asset-backed securities for which there is a decreased observability of market pricing for these investments. At June 26, 2011, these securities were valued primarily using an independent valuation firm or broker pricing models that incorporate transaction details such as maturity, timing and the amount of future cash flows, as well as assumptions about liquidity and credit valuation adjustments of marketplace participants at June 26, 2011. Gains and losses attributable to financial assets whose fair value is determined by using Level 3 inputs and included in earnings consist of mark-to-market adjustments for derivatives and other-than-temporary impairments on investments. These gains and losses are included in other (income) expense, net. Realized gains or losses on the sale of securities are included in interest (income)/expense, net. Other-Than-Temporary Impairments of Investments The Company evaluates securities for other-than-temporary impairment on a quarterly basis. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which the market value has been less than cost, the financial condition and near-term prospects of the issuer of the securities, the Company’s intent to sell, or whether it is more likely than not that it will be required to sell, the investment before anticipated recovery in fair value. If, based upon the analysis, it is determined that the impairment is other-than-temporary, the security is written down to fair value, and a loss is recognized through earnings as a component of other (income)/expense, net. Cash, Restricted Cash, Cash Equivalents, and Investments The Company classifies all highly liquid investments purchased with original or remaining maturities of ninety days or less at the date of purchase to be cash equivalents. The cost of these investments approximates their fair value. The Company invests excess cash in marketable securities consisting of available-for-sale fixed income securities, as well as strategic investments in the common stock and preferred stock of publicly traded foreign companies. Unrealized gains and losses on these investments are included in other comprehensive income, a separate component of stockholders’ equity, net of any related tax effect. Realized gains and losses are included in other expense. Declines in value of these investments judged by management to be other-than-temporary, if any, are included in other expense, net. Investments in non-marketable securities are carried at cost as the Company does not exert significant influence over any of its investments. The Company evaluates the carrying value of its investments for impairment on a periodic basis. Marketable and non-marketable equity securities are classified as long-term assets in the Company’s consolidated balance sheet. The Company manages its total portfolio to encompass a diversified pool of investment-grade securities. The Company’s investment policy is to manage its total cash and investments balances to preserve principal and maintain liquidity while maximizing the returns on the investment portfolio. Cash, restricted cash, cash equivalents and investments as of June 26, 2011 and June 27, 2010 are summarized as follows (in thousands):
Restricted cash of $1.0 million at June 27, 2010 was maintained to secure the Company’s remaining indemnity obligations, if any, pursuant to the terms of the of the sale of the Company’s former Power Control Systems business (“PCS Business”) to Vishay Intertechnology, Inc. (“Vishay”) (the “Divestiture”). The restricted cash was held by Union Bank of California, as escrow agent. The escrow account was closed in fiscal year 2011. See Note 3, “Gain on Divestiture”. In addition, the Company had $1.6 and $2.4 million in a short-term deposit account with Bank of America as collateral for an outstanding letter of credit at June 26, 2011 and June 27, 2010, respectively, and approximately $0.5 million and $0.3 million with Citibank at June 26, 2011 and June 27, 2010, respectively, as collateral for travel card transactions. Inventories Inventories are stated at the lower of cost (generally first-in, first-out) or market. Inventories are reviewed for excess or obsolescence based upon demand forecasts for a specific time horizon and reserves are established accordingly. Manufacturing costs deemed to be abnormal, such as idle facility expense, excessive spoilage, double freight and re-handling costs are charged as cost of sales in the period incurred. Inventories at June 26, 2011 and June 27, 2010, were comprised of the following (in thousands):
Property, Plant and Equipment Property, plant and equipment are stated at cost. Any gain or loss on retirement or disposition is included in operating expenses. Depreciation is provided using the straight-line method based on the estimated useful lives of the assets, ranging from three to 40 years. Depreciation and amortization expense for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 was $75.3 million, $68.4 million and $63.8 million, respectively. Property, plant and equipment at June 26, 2011 and June 27, 2010 was comprised of the following (in thousands):
Amortization of improvements to leased premises is recorded using the straight-line method over the shorter of the remaining term of the lease or estimated useful lives of the improvements. Capital leases included in property, plant and equipment were not material at June 26, 2011 and June 27, 2010. Repairs and maintenance costs are charged to expense as incurred. In the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, repairs and maintenance expenses were $50.1 million, $51.0 million and $31.9 million, respectively. The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events and circumstances include, but are not limited to:
The Company evaluates the recoverability of long-lived assets based on the expected undiscounted cash flows for their asset group. Goodwill and Acquisition-Related Intangible Assets The Company classifies the difference between the consideration transferred and the fair value of any noncontrolling interest in the acquiree and the fair value of net assets acquired at the date of acquisition as goodwill. The Company classifies intangible assets apart from goodwill if the assets have contractual or other legal rights, or if the assets can be separated and sold, transferred, licensed, rented or exchanged. Depending on the nature of the assets acquired, the amortization period may range from two to 15 years for those acquisition-related intangible assets subject to amortization. The Company evaluates the carrying value of long-lived assets, including goodwill, on an ongoing basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill and Other Intangible Assets The Company evaluates the carrying value of the goodwill and other intangible assets annually during the fourth quarter of each fiscal year and more frequently if it believes indicators of impairment exist. In evaluating goodwill, a two-step goodwill impairment test is applied to each reporting unit. The Company identifies reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. In the first step of the impairment test, the Company estimates the fair value of the reporting unit. If the fair value of the reporting unit is less than the carrying value of the reporting unit, the Company performs the second step which compares the implied fair value of goodwill with the carrying amount of goodwill and writes down the carrying amount of the goodwill to the implied fair value. The fair value of the Company’s reporting units is determined using the income approach, which estimates fair value of its reporting units based on a discounted cash flow approach. The discount rate the Company utilized for determining discounted cash flows was 14% based upon its assessment of the risks associated with the projected cash flows and market based estimates of capital costs. In completing the goodwill impairment analysis, the Company tests the appropriateness of reporting units estimated fair value by reconciling the aggregate reporting units fair values with its market capitalization. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions. These estimates and assumptions include estimates of future revenues and expense growth rates, capital expenditures and the depreciation and amortization, changes in working capital, discount rates, and the selection of appropriate control premiums. Due to the inherent uncertainty involved in making these estimates, actual future results related to assumed variables could differ from these estimates. Changes in assumptions regarding future results or other underlying assumptions would have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge. The Company’s annual evaluation during fiscal years 2011 and 2010 indicated that the fair value of the reporting units was more than their carrying value indicating no impairment. However, during the third quarter of fiscal year 2009 the Company concluded that events and changes in circumstances, including performance against business plan and the outlook for the business and industry, warranted an interim impairment analysis of goodwill. Based on the results of this interim goodwill impairment analysis the Company concluded that the Automotive Products and Intellectual Property segments carrying value exceeded their fair value. As a result the Company recorded a goodwill impairment charge of $23.9 million, $20.1 million of which related to the Intellectual Property segment and $3.8 million related to the Automotive Products segment, during the third quarter of fiscal year 2009. As discussed in Note 2, “Business Acquisitions”, as a result of two acquisitions in fiscal year 2011, the Company recorded acquisition-related intangible assets of $28.8 million and goodwill of $46.6 million. Goodwill recognized from these acquisitions was assigned to the Company’s Enterprise Power business segment. In addition, on July 30, 2010, the Company acquired certain intellectual property, including patent and patent rights, as well as 25.0 million shares of preferred stock, from a privately held domestic company for a total of $9.0 million. Of the $9.0 million, $7.5 million was allocated to the intellectual property and $1.5 million was allocated to the preferred stock. The allocation was based upon the estimated fair value of the intellectual property and preferred stock as of the acquisition date. The estimated fair values of the acquired patents and patent rights were determined based upon discounted after-tax cash flows adjusted for the probabilities of successful development and commercialization of the related technology. The $7.5 million allocated to the patents and patent rights will be amortized on a straight-line basis over the estimated life of the patents of 11 years. At June 26, 2011 and June 27, 2010, acquisition-related intangible assets included the following (in thousands):
As of June 26, 2011, the following table represents the total estimated amortization of intangible assets for the next five succeeding fiscal years (in thousands):
The carrying amount of goodwill by ongoing segment as of June 26, 2011 and June 27, 2010 was as follows (in thousands):
As of June 26, 2011, $17.2 million of goodwill is deductible for income tax purposes of which $3.0 million was deducted in the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively. The changes in the carrying amount of goodwill for the fiscal years ended June 26, 2011 and June 27, 2010 were as follows (in thousands):
Other Accrued Expenses Other accrued expenses at June 26, 2011 and June 27, 2010 were comprised of the following (in thousands):
Warranty The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under the terms of its warranty agreements. The specific warranty terms and conditions vary depending upon product sold and the country in which the Company does business. In general, for standard products, the Company will replace defective parts not meeting the Company’s published specifications at no cost to the customers. Factors that affect the liability include historical and anticipated failure rates of products sold, and cost per claim to satisfy the warranty obligation. If actual results differ from the estimates, the Company revises its estimated warranty liability to reflect such changes. The following table details the changes in the Company’s warranty reserve for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, which is included in other accrued liabilities in the schedule above (in thousands):
Other Long-Term Liabilities Other long-term liabilities at June 26, 2011 and June 27, 2010 were comprised of the following (in thousands):
At June 26, 2011, the Company had $2.0 million of accrued asset retirement obligations, of which $1.8 million is included in “Other” in the table above with the remainder in other accrued expenses, related to future obligations to remove leasehold improvements and obligations for the closure of certain owned and leased manufacturing facilities. Depreciation and accretion expense was $0.1 million and $0.6 million for fiscal years 2011 and 2010, respectively. Of these charges, in fiscal year 2011, $0.1 million was recorded in selling, general and administrative expense, and in fiscal year 2010, $0.3 million and $0.3 million were recorded in cost of sales and selling, general and administrative expense, respectively. Derivative Financial Instruments The Company’s primary objectives for holding derivative financial instruments are to hedge non-functional currency risks. The Company’s derivative instruments are recorded at fair value and are included in other long-term assets and other accrued liabilities. The Company’s accounting policies for derivative financial instruments are based on the criteria for designation of a hedging transaction as an accounting hedge, either as cash flow or fair value hedges. A cash flow hedge refers to the hedge of the exposure to variability in the cash flows of an asset or a liability, or of a forecasted transaction. A fair value hedge refers to the hedge of the exposure to changes in fair value of an asset or a liability, or of an unrecognized firm commitment. The criteria for designating a derivative as a hedge include the instrument’s effectiveness in risk reduction and, in most cases, a one-to-one matching of the derivative instrument to its underlying transaction. Gains and losses from derivatives designated as fair value accounting hedges generally offset changes in the values of the hedged assets or liabilities over the life of the hedge. The Company recognizes gains and losses on derivatives that are not currently designated as hedges for accounting purposes in earnings in other (income) expense, net. As of June 26, 2011 and June 27, 2010, the Company had no derivative instruments designated as accounting hedges. As such, all gains and losses on derivatives for the years ended June 26, 2011 and June 27, 2010 were recognized in earnings. Foreign Currency Translation In most cases, the functional currency of a foreign operation is deemed to be the local country’s currency. Assets and liabilities of operations outside the United States are translated into U.S. reporting currency using current exchange rates. Revenues and expenses denominated in foreign functional currencies are translated at the average exchange rates during the period. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income within stockholders’ equity. Accumulated Other Comprehensive (Loss) Income The components of accumulated other comprehensive (loss) income as of June 26, 2011, June 27, 2010, and June 28, 2009 were as follows (in thousands):
Change in Accounting Estimate Effective December 27, 2010, the Company changed its depreciation method for certain fabrication equipment from the units-of-production method to the straight-line method. The Company considers this change of depreciation method a change in accounting estimate affected by a change in accounting principle. This change in estimate is accounted for prospectively as of the beginning of the third quarter of fiscal year 2011. While the Company believes the units-of-production method, as a function of usage, reasonably reflects the matching of costs and revenues, it requires considerable effort to monitor and track the usage of certain fabrication equipment consistently across all fabrication facilities. The Company believes the straight-line method of depreciation represents a better estimate of the use of the equipment over its productive life and better reflects the pattern of economic consumption. Additionally, the Company believes the revised practice is consistent with the predominant industry practice. The effects of the change described above to net income and net income per share was immaterial for the fiscal year ended June 26, 2011. Stock-Based Compensation The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The amount of expense attributed to awards is based on the estimated forfeiture rate, which is updated based on the Company’s actual forfeiture rates. This option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, pre-vesting forfeiture rate and an option’s expected life. The financial statements include amounts that are based on the Company’s best estimates and judgments. Prior to fiscal year 2011, the Company used the “simplified” method to estimate the expected term for share option grants as the Company did not have enough historical experience to provide a reasonable estimate. Currently, the Company estimates the expected term of options using historical exercise and forfeiture data. The Company believes that this historical data is the best estimate of the expected life of a new option, and that generally all groups of the Company’s employees exhibit similar exercise behavior. The Company uses market implied volatility of options to estimate expected volatility. The Company believes implied volatility is a better indicator of expected volatility because it considers option trader’s forecast of future stock price volatility. The Company grants RSU’s with three types of vesting schedules: (i) service-based, (ii) performance-based or (iii) market-based. The fair value for service-based and performance-based RSU’s is determined using the fair value of the Company’s common stock on the date of grant. The fair value of market-based RSU’s is estimated using the Monte Carlo Simulation method which takes into account the probability that the market conditions of these awards will be achieved. Compensation expense for awards with service-based conditions is amortized over the requisite service period of the award on a straight-line basis. Compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met. If the performance condition is not considered probable of being achieved, no expense is recognized until such time as the performance condition is considered probable of being met, if ever. Compensation expense for RSU awards with market-based condition is recognized over the service period using the straight-line method. Compensation expense related to awards with a market-based condition is recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. Business Combinations The Company currently uses the acquisition method to account for business combinations. The acquisition method requires the Company to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree, and recognize and measure goodwill or a gain from a bargain purchase. The Company must also determine whether a transaction is a business combination by evaluating if the assets acquired and liabilities assumed constitute a business. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. If the assets acquired are not a business, the Company shall account for the transaction or other event as an asset acquisition. Stock Repurchase Program On October 27, 2008, the Company announced that its Board of Directors authorized a stock repurchase program of up to $100.0 million. On July 20, 2010, the Company announced that its Board of Directors had authorized an increase in the limit of the stock repurchase program by $50.0 million, thereby increasing the total authorization for the plan to $150.0 million. Stock repurchases under this program may be made in the open market or through privately negotiated transactions. The timing and actual number of shares repurchased depend on market conditions and other factors. The stock repurchase program may be suspended at any time without prior notice. The Company has used and plans to continue to use existing cash to fund the repurchases. All of the shares repurchased by the Company through the program were purchased in open market transactions. For the fiscal year ended June 26, 2011, the Company repurchased approximately 1.4 million shares for approximately $32.6 million, and to date the Company has purchased approximately 4.6 million shares for approximately $81.2 million under the program. As of June 26, 2011, the Company had not cancelled the repurchased shares of common stock, and as such, they are reflected as treasury stock in the June 26, 2011 and June 27, 2010 consolidated balance sheets. Concentration of Risk The Company is subject to concentrations of credit risk in its investments, derivatives and trade accounts receivable. The Company maintains cash, cash equivalents, and other securities with high credit quality financial institutions based upon the Company’s analysis of that financial institution’s relative credit standing. The Company’s investment policy is designed to limit exposure to any one institution. The Company also is exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments. The counterparties to all derivative transactions are major financial institutions with investment grade credit ratings. However, this does not eliminate the Company’s exposure to credit risk with these institutions. This credit risk is generally limited to the unrealized gains in such contracts should any of these counterparties fail to perform as contracted. The Company considers the risk of counterparty default to be minimal. The Company sells its products to distributors and original equipment manufacturers involved in a variety of industries including computing, consumer, communications, automotive and industrial. The Company has adopted credit policies and standards to accommodate industry growth and inherent risk. The Company performs continuing credit evaluations of its customers’ financial condition and requires collateral as deemed necessary. Reserves are provided for estimated amounts of accounts receivable that may not be collected. The Company maintains allowances for doubtful accounts and pricing disputes. These allowances as of fiscal years ended June 26, 2011 and June 27, 2010 were $2.4 million and $3.7 million, respectively. Adoption of Recent Accounting Standards in the Fiscal Year Ended June 26, 2011 In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) update No. 2009-13, “Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force.” This amendment establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. The amendments also replace the term “fair value” in the revenue allocation guidance with “selling price” to clarify that the allocation of revenue is based on entity-specific assumptions rather than assumptions of a marketplace participant. In addition, the amendments eliminate the residual method of allocation and require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method. The relative selling price method allocates any discount in the arrangement proportionally to each deliverable on the basis of each deliverable’s selling price. The Company adopted ASC update No. 2009-13 as of the beginning of fiscal year 2011, and the adoption did not have a material impact on the Company’s financial statements. Recent Accounting Standards In December 2010, the FASB issued ASC update No. 2010-28, “Intangibles-Goodwill and Other (Topic 350), When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts, a consensus of the FASB Emerging Issues Task Force.” This amendment modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. The qualitative factors that an entity should consider when evaluating whether it is more likely than not that a goodwill impairment exists are consistent with the existing guidance for determining whether an impairment exists between annual tests. The Company does not believe that adoption of this update will have a material impact on its financial statements. This update is effective for fiscal periods beginning after December 15, 2010. In December 2010, the FASB issued ASC update No. 2010-29, “Business Combinations (Topic 805), Disclosure of Supplementary Pro Forma Information for Business Combinations, a consensus of the FASB Emerging Issues Task Force.” This amendment clarifies the periods for which pro forma financial information is presented. The disclosures include pro forma revenue and earnings of the combined entity for the current reporting period as though the acquisition date for all business combinations that occurred during the year had been as of the beginning of the annual reporting period. If comparative financial statements are presented, the pro forma revenue and earnings of the combined entity for the comparable prior reporting period should be reported as though the acquisition date for all business combinations that occurred during the current year had been as of the beginning of the comparable prior annual reporting period. The Company does not believe that adoption of this update will have a material impact on its financial statements. This update is effective for fiscal periods beginning after December 15, 2010. In May 2011, the FASB issued ASC update No. 2011-04, “Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. The amendments in this update result in common fair value measurement and disclosure requirements in US generally accepted accounting principles ("U.S. GAAP") and International Financial Reporting Standards ("IFRS"). Consequently, the amendments converge the fair value measurement guidance in U.S. GAAP and IFRS. Some of the amendments clarify the application of existing fair value measurement requirements, while other amendments change a particular principle in ASC 820. The amendments in this update that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements include the following: 1) measuring the fair value of financial instruments that are managed within a portfolio, 2) application of premiums and discounts in a fair value measurement, and 3) additional disclosures about fair value measurements. The amendments in this update are to be applied prospectively and are effective during interim and annual periods beginning after December 15, 2011. The Company does not believe that adoption of this update will have a material impact on its financial statements. In June 2011, the FASB issued ASC update No. 2011-05, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income”. The FASB decided to eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, among other amendments in this update. The amendments require that all non-owner changes in stockholder’s equity be presented in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, the Company is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The statement of other comprehensive income should immediately follow the statement of net income and include the components of other comprehensive income and total for other comprehensive income, along with a total for comprehensive income. The entity is also required to present of the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the components of net income and the components of comprehensive income are presented. The amendments in this update should be applied retrospectively, and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. |
Quarterly Financial Data (Unaudited) (Tables)
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Jun. 26, 2011
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Jun. 27, 2010
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Quarterly Financial Data (Unaudited) [Abstract] | Â | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal year ended June 26, 2011 (in thousands, except per share data):
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The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal year ended June 27, 2010 (in thousands, except per share data):
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Stock-Based Compensation and Employee Benefit Plans
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Jun. 26, 2011
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Compensation and Retirement Disclosure [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Employee Benefit Plans | 7. Stock-Based Compensation and Employee Benefit Plans Stock Incentive Plans For the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, stock-based compensation awards were granted under Amended and Restated 2000 Incentive Plan (“2000 Plan”) and awards remained outstanding under this 2000 Plan and the 1997 Employee Stock Incentive Plan (“1997 Plan”). Options granted under the Company's stock-based compensation plans before November 22, 2004, generally became exercisable in annual installments of 25 percent beginning on the first anniversary date, and expire after seven years. Options granted after November 22, 2004, generally became exercisable in annual installments of 331/3 percent beginning on the first anniversary date, and expire after five years. Under the 1997 Plan, options to purchase shares of the Company’s common stock may be granted to the Company’s employees and consultants. In addition, other stock-based awards (e.g., restricted stock units (“RSUs”), share appreciation rights and performance shares) may be granted, among other awards. As noted below, on November 22, 2004, the Company’s stockholders approved an amendment to the 2000 Plan to increase the authorized number of shares from 7,500,000 to 12,000,000 and discontinued further grants under the 1997 Plan. Under the 2000 Plan, options to purchase shares of the Company’s common stock and other stock-based awards (including without limitation, RSUs) may be granted to the Company’s employees, consultants, officers and directors. The terms of the 2000 Plan were substantially similar to those under the 1997 Plan. On November 22, 2004, the Company’s stockholders approved an amendment to the 2000 Plan which, among other things, increased the authorized number of shares to be granted from 7,500,000 to 12,000,000. The amendment also changed the maximum expiration term on future option awards to five years, and contained certain limitations on the maximum number of shares that may be awarded to an individual. No awards may be made under the 2000 Plan after August 24, 2014. As of June 26, 2011, there were 509,616 shares available for future awards under the 2000 Plan. The Company issues new shares to fulfill the obligations under all of its stock-based compensation awards. Such shares are subject to registration under applicable securities laws, including pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (“SEC”), unless an applicable exemption applies. The following table summarizes the stock option activity for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 (in thousands, except per share price data):
For the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, the Company received proceeds of $11.4 million, $5.6 million and $3.0 million, respectively, as a result of the exercise of stock options. The tax benefit realized for the tax deductions from stock-based awards was $1.4 million for fiscal year ended June 26, 2011 and zero for the fiscal years ended June 27, 2010 and June 28, 2009, respectively. The following table summarizes the stock options outstanding at June 26, 2011, and the related weighted average price and life information (in thousands, except year and price data):
The following table summarizes the RSU activity for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 (in thousands, except per share price data):
The Company's stock-based compensation plan permits the reduction of a participant’s RSUs for purposes of settling a participant’s income tax withholding obligation. During the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, the Company withheld RSUs representing 124,363, 39,744 and 41,827 shares, respectively, to fund participant income tax withholding obligations. Starting in fiscal year 2010, the Company has made awards of RSUs with performance vesting (non-market-based) criteria to executives and certain key employees pursuant to the 2000 Plan. The awards were granted at the market price of the underlying share of the Company’s common stock on the date of grant. Any vesting of such awards would take place upon the achievement of certain performance goals, and otherwise subject to the terms and conditions of the 2000 Plan and applicable award documentation. The performance goals for the awards vary depending on the executive officer or key employee. For grants made in fiscal 2011, performance goals must be achieved generally on or before the end of the Company’s fiscal year 2012 for the awards to vest, although some of the awards provide for achievement of performance goals on or before earlier dates. The Company granted 311,212 and 170,000 RSUs with performance vesting criteria in fiscal years 2011 and 2010, respectively. The Company recognized $3.8 million and $1.9 million of expense for these awards during fiscal years 2011 and fiscal 2010, respectively, based on actual achievement or the determination that the achievement of certain of the performance goals was probable within the time established for the awards. In the fourth quarter of fiscal year 2011, the Company granted RSUs with market-based vesting criteria to executives and certain key employees pursuant to the 2000 Plan. These market-based awards vest (or fail to vest) as of the end of the Company’s fiscal year 2014 but the actual number of these awards which will ultimately vest is based on the average closing market price of the Company’s common stock computed over the Company’s 2014 fiscal year, and otherwise subject to the terms and conditions of the 2000 Plan and applicable award documentation. The fair value of these awards was estimated using the Monte Carlo Simulation method which takes into account the probability that the market conditions of these awards will be achieved. Compensation costs related to awards with a market-based condition are recognized regardless of whether the market conditions are satisfied, provided that the requisite service has been provided. The Company granted 366,100 RSUs with market-based vesting criteria in fiscal 2011. Due to the timing of the grant of the award at the end of the fourth quarter of fiscal 2011, there was no expense associated with these awards recognized by the Company in fiscal 2011. In addition to the performance and market-based RSUs, during the year ended June 26, 2011, the Company made awards of 1,272,730 RSUs to employees, and 34,335 RSUs to members of the Board of Directors, in each case under the 2000 Plan, and which awards provided for vesting over a period of service, subject to the terms and conditions of the 2000 Plan and applicable award documentation. For the awards made to employees, the vesting of awards generally takes place in equal installments over each of the first three anniversaries of the date of grant. The awards made to members of the Board of Directors were made as part of the Board’s annual director compensation program, under which the vesting of awards takes place on the first anniversary of the date of grant. Additional information relating to the stock-based compensation plans, including employee stock options and RSUs, at June 26, 2011, June 27, 2010, and June 28, 2009, is as follows (in thousands):
Forfeitures are estimated at the time of grant. Based on the Company’s historical exercise and termination data, a five percent forfeiture rate is assumed for the majority of the options. For the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, stock-based compensation expense associated with the Company’s stock options and RSUs, is as follows (in thousands):
During fiscal year 2009, a one-time $1.8 million decrease in stock option expense was recorded due to a correction of an error in accounting for stock options issued in 2008. This one-time decrease primarily affected selling, general and administrative expense. Certain of the Company’s RSU and option award agreements provide for the vesting of one or more installments upon the satisfaction of certain conditions, among them certain conditions for an awardees’ retirement from service from the Company. For the year ended June 26, 2011, the Company recorded an aggregate of $0.8 million for awardees determined to be potentially eligible for retirement under applicable award agreements and such amount is included in the total selling, general and administrative, research and development, and cost of sales expense lines above. The total unrecognized compensation expense for outstanding stock options and RSUs was $38.3 million as of June 26, 2011, and will be recognized, in general, over three years, except for performance-based RSUs, and one stock option award and RSU award made to the Chief Executive Officer (“the CEO”). The awards to the CEO (which are included in the awards disclosed above), include an option to purchase 750,000 shares and an award of RSUs in the amount of 250,000 shares made to the CEO during fiscal year 2008 as provided for under his employment agreement. The compensation expense for the CEO’s awards made during fiscal year 2008 is being recognized over five years. The unrecognized compensation expense for the outstanding performance based RSUs will be recognized when it is determined that it is probable the goals will be achieved or upon achievement of the goals, whichever event occurs first. The weighted average number of years to recognize the total compensation expense (including that of the CEO) is 1.7 years. The fair value of the stock options associated with the above compensation expense for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively, was determined at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:
During the period from April 2007 through August 2008 (“Suspension Period”), the Company was unable to issue registered shares to settle stock option exercises as the Company was not current with its periodic filings with the SEC as a result of the Audit Committee’s investigation of the Company’s accounting practices. As such, the Company applied the “simplified” method to determine the expected life of stock options at the date of grant as it could not rely on its historical exercise data due to the impact the Suspension Period had on the historical exercise data. Beginning in fiscal 2011, the Company estimates the expected term of options using historical exercise and forfeiture data. The risk-free interest rate is based on U.S. Treasury securities with maturities equal to the expected life of the option. With respect to volatility, the Company has certain financial instruments that are publicly traded from which it can derive the implied volatility. The Company uses market implied volatility of options for valuing its stock options. The Company believes implied volatility is a better indicator of expected volatility because it considers option trader’s forecast of future stock price volatility. Employee Stock Participation Plan The Company’s amended 1984 Employee Stock Participation Plan (“Amended ESPP”), has been suspended since April 2007. Participation in the Amended ESPP has remained suspended through fiscal year 2011. No shares have been issued during the suspension of the Amended ESPP and 755,542 shares remained unissued at June 26, 2011. Deferred Compensation Plan The Company has a deferred compensation plan which provides directors, executive management and other key employees with the ability to defer the receipt of compensation in order to accumulate retirement funds on a tax deferred basis. The Company does not make contributions to the deferred compensation plan or guarantee returns on the investments. Participant deferrals and investment gains and losses remain the Company’s assets and are subject to claims of general creditors. The assets and liabilities of the deferred compensation plan are recorded at fair value each reporting period with the changes in fair value recorded in other income (expense). As of June 26, 2011 and June 27, 2010, the fair value of the assets was $7.8 million and $7.3 million, respectively, and the fair value of the liabilities was $7.6 million and $6.0 million. The Company recorded net changes in fair value for the deferred compensation plan in other expense, net of $0.4 million, $0.4 million and $0.5 million for fiscal years 2011, 2010 and 2009, respectively. Employee Savings Plan - 401(k) Plan The Company sponsors a 401(k) plan which provides participating employees with an opportunity to accumulate funds for retirement. The Company’s contributions to the 401(k) plan were $2.5 million, $2.9 million, and $3.0 million for fiscal years 2011, 2010 and 2009, respectively. |
Environmental Matters
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Jun. 26, 2011
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Environmental Matters [Abstract] | Â |
Environmental Matters | 12. Environmental Matters Federal, state, local and foreign laws and regulations impose various restrictions and controls on the storage, use and discharge of certain materials, chemicals and gases used in semiconductor manufacturing processes, and on the operation of the Company's facilities and equipment. The Company believes it uses reasonable efforts to maintain a system of compliance and controls for these laws and regulations. Despite its efforts and controls, from time to time, issues may arise with respect to these matters. Additionally, under some of these laws and regulations, the Company could be held financially responsible for remedial measures if properties are contaminated or if waste is sent to a landfill or recycling facility that becomes contaminated. Also, the Company may be subject to common law claims if released substances damage or harm third parties. The Company cannot make assurances that changes in environmental laws and regulations will not require additional investments in capital equipment and the implementation of additional compliance programs in the future, which could have a material adverse effect on the Company's results of operations, financial position or cash flows, as could any failure by or violation of the Company to comply with any prior, current or future environmental laws and regulations. During negotiations for the Company’s April 2007 divestiture of the Company’s Power Control Systems business to Vishay Intertechnology, Inc., certain chemical compounds were discovered in the groundwater underneath one of the Company's former manufacturing plants in Italy, and that the Company has advised appropriate governmental authorities at about the time of such divestiture. In August 2010, the Company received a letter from the relevant local authority requiring a confirmation of intention to proceed with preparation of a plan of characterization in relation to the site in question. The Company has restated to local authorities its prior position from the period following such divestiture that it had not committed to take further action with respect to the site. The Company has not been assessed any penalties with respect to the site, and it is too early to assess whether any such penalties will be assessed in the future. In December 2010, the owner by foreclosure of a property in El Segundo, California has notified the Company of its claim that the Company is a potentially responsible party for the remediation of hazardous materials allegedly discovered by that owner at the property. The Company has also been contacted by the California Department of Toxic Substances Control in respect of such notice. The Company intends to vigorously defend against the claims asserted in the notice. In November 2007, the Company was named as one of approximately 100 defendants in Angeles Chemical Company, Inc. et al. v. Omega Chemical PRP Group, LLC et al., No. EDCV07-1471 (TJH) (JWJx) (C.D. Cal.) (the "Angeles Case"). Angeles Chemical Company, Inc. and related entities ("Plaintiffs") own or operate a facility (the "Angeles Facility") which is located approximately one and a half miles down gradient of the Omega Chemical Superfund Site (the "Omega Site") in Whittier, California. Numerous parties, including the Company, allegedly disposed of wastes at the Omega Site. Plaintiffs claim that contaminants from the Omega Site migrated in groundwater from the Omega Site to the Angeles Facility, thereby causing damage to the Angeles Facility. In addition, they claim that the EPA considers them to be responsible for the groundwater plume near the Angeles Facility, which Plaintiffs contend was caused by disposal activities at the Omega Site. Plaintiffs filed claims based on CERCLA, nuisance and trespass, and also seek declaratory relief. Plaintiffs seek to require the defendants to investigate and clean-up the contamination and to recover damages. The case has been stayed by the court pending the Environmental Protection Agency's completion of its remedial investigation. The Company previously entered into a settlement with other parties associated with the Omega Site pursuant to which the Company paid those entities money in exchange for an agreement to defend and indemnify the Company with regard to certain environmental claims (the "Omega Indemnification"). In that agreement, it was estimated that the Company's volumetric share of wastes sent to the Omega Site was in the range of 0.08 percent. The Company believes that much, if not all, of the risks associated with the Angeles Case should be covered by the Omega Indemnification. In addition, the Company has tendered the complaint to several of its insurance carriers, one of which has agreed to defend under a reservation of rights. Therefore, the Company does not expect its out-of-pocket defense costs to be significant. In addition, in light of the Omega Indemnification, the potential for insurance coverage and the fact that its volumetric share of Omega Site wastes was less than 0.1 percent, the Company does not believe that an adverse judgment against the Company would be material. IR and Rachelle Laboratories, Inc. ("Rachelle"), a subsidiary of the Company that discontinued operations in 1986, were each named a potentially responsible party ("PRP") in connection with the investigation by the United States Environmental Protection Agency ("EPA") of the disposal of allegedly hazardous substances at a major superfund site in Monterey Park, California ("OII Site"). Certain PRPs who settled certain claims with the EPA under consent decrees filed suit in Federal Court in May 1992 against a number of other PRPs, including IR, for cost recovery and contribution under the provisions of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). The Company has settled all outstanding claims that have arisen against IR relating to the OII Site. No claims against Rachelle have been settled. The Company has taken the position that none of the wastes generated by Rachelle were hazardous. Counsel for Rachelle received a letter dated August 2001 from the U.S. Department of Justice, directed to all or substantially all PRPs for the OII Site, offering to settle claims against such parties for all work performed through and including the final remedy for the OII Site. The offer required a payment from Rachelle in the amount of approximately $9.3 million in order to take advantage of the settlement. Rachelle did not accept the offer. It remains the position of Rachelle that its wastes were not hazardous. In addition, Rachelle operated as an independent corporation and the Company did not believe that a complaining party would be successful in reaching the assets of IR even if it could prevail on a claim against Rachelle. Because Rachelle has not been sued, none of the Company’s insurers has accepted liability, although at least one of the Company’s insurers previously reimbursed IR for defense costs for the lawsuit filed against IR. The Company received a letter in June 2001 from a law firm representing UDT Sensors, Inc. ("UDT") relating to environmental contamination (chlorinated solvents such as trichlorethene) purportedly found in UDT's properties in Hawthorne, California. The letter alleges that the Company operated a manufacturing business at that location in the 1970's and/or 1980's and that it may have liability in connection with the claimed contamination. The Company has made no accrual for any potential losses since there has been no assertion of specific facts on which to form the basis for determination of liability. |
Asset Impairment, Restructuring and Other Charges (Recoveries)
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Jun. 26, 2011
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Asset Impairment, Restructuring and Other Charges (Recoveries) [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment, Restructuring and Other Charges (Recoveries) | 8. Asset Impairment, Restructuring and Other Charges (Recoveries) Asset impairment, restructuring and other charges reflect the impact of various cost reduction programs and initiatives implemented by the Company. These programs and initiatives include the closing of facilities, the termination and relocation of employees and other related activities. Asset impairment, restructuring and other charges include program-specific exit costs, severance benefits pursuant to an ongoing benefit arrangement, and special termination benefits. Severance costs unrelated to the Company's restructuring initiatives are recorded as an element of cost of sales, research and development or selling, general and administrative expense, depending upon the classification and function of the employee terminated. Restructuring costs were expensed during the period in which all requirements of recognition were met. Asset write-downs are principally related to facilities and equipment that will not be used subsequent to the completion of exit or downsizing activities being implemented, and cannot be sold for amounts in excess of carrying value. In determining the asset groups for the purpose of calculating write-downs, the Company groups assets at the lowest level for which identifiable cash flow information is largely independent of the cash flows of other assets and liabilities. In determining whether an asset was impaired, the Company evaluates estimated undiscounted future cash flows and other factors such as changes in strategy and technology. An impairment loss exists if the estimated undiscounted future cash flows from the initial analysis are less than the carrying amount of the asset group. The Company then determines the fair value of the asset group using the present value technique, by applying to the estimated future cash flows a discount rate that is consistent with the rate used when analyzing potential acquisitions. Asset impairment, restructuring and other charges represent costs related primarily to the following:
The following table summarizes restructuring charges incurred during the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 related to the restructuring initiatives discussed below. These charges were recorded in asset impairment, restructuring and other charges (recoveries) (in thousands):
In addition to the amounts in the table above, $1.0 million and $0.7 million of workforce reduction expense related to retention bonuses was recorded in cost of sales during the fiscal years 2010 and 2009, respectively, related to the restructuring initiatives. In fiscal year 2011, as a result of its decision to suspend its El Segundo Fabrication Facility Closure Initiative, the Company recorded a net credit to cost of sales for approximately $1.0 million to accrued workforce reduction costs related to retention bonuses. In addition costs were incurred to relocate and install equipment of $0.2 million, $2.1 million and $3.7 million for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, respectively. These costs are not considered restructuring costs and were recorded in costs of sales. The following table summarizes changes in the Company's restructuring related accruals for fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 which are included in other accrued expenses on the balance sheet (in thousands):
The following table summarizes the total asset impairment, restructuring and other charges (recoveries) by initiative for the fiscal years 2011, 2010 and 2009:
Newport, Wales Fabrication Facility Consolidation Initiative The Company adopted a plan during the second quarter of fiscal year 2009 to consolidate its wafer manufacturing operations in Newport, Wales to reduce manufacturing costs and reduce capacity as a result of a decline in market demand. Subsequent to initiating the plan and exiting certain portions of the facility, there was a significant recovery in demand during the second half of fiscal year 2009. To service this unforeseen demand, the Company reopened much of the space previously designated for closure as part of this initiative. The total pre-tax cost of the consolidation plan is approximately $52.4 million, of which $48.9 million represents non-cash charges. These charges consisted of severance and other workforce reduction costs of $1.8 million, asset impairment charges of $48.9 million and other costs incurred to close or consolidate the facility of $1.7 million. Through the end of fiscal year 2009, the Company had recorded $52.0 million of the estimated costs to complete the initiative. During the year ended June 27, 2010, the Company recorded $0.5 million of costs related to moving and installing equipment. These costs were charged to cost of sales. Cash payments for this initiative were approximately $0.9 million during fiscal year 2010, and $3.2 million during fiscal year 2009. There were no costs incurred or cash payments made for this initiative during fiscal year 2011. El Segundo, California Facility Closure Initiative The Company adopted a plan for the closure of its El Segundo, California fabrication facility during fiscal year 2009. The expectation was that the plan would be carried out through calendar year 2010 with a revised estimated total pre-tax cost of $12.1 million of which approximately $0.4 million would be non-cash charges. These estimated charges consisted of severance and other workforce reduction costs of $5.9 million and other costs incurred to close or consolidate the facility of $6.2 million. Approximately $1.0 million of the additional costs related to equipment relocation and installation and the reconfiguration of ventilation systems. These costs are being charged to operating expense as incurred. The restructuring charges recorded through fiscal year 2010 under this initiative included $4.0 million of severance, $1.7 million of other workforce reduction costs and $3.9 million of other charges for this initiative. Due to continued higher demand than at the time the plan was adopted, in mid-fiscal year 2011 the Company suspended, for the foreseeable future, the closure of this facility. As a result of suspending this closure initiative, the Company has recorded a credit to asset impairment, restructuring and other charges for approximately $3.5 million for previously accrued severance costs. Cash payments for this initiative were approximately $0.2 million, $1.6 million and $3.5 million during the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, respectively. The Company intends to pay the remaining $0.5 million of accrued retention bonuses under this initiative in the first quarter of fiscal year 2012. Research and Development Facility Closure Initiative In the third quarter of fiscal year 2008, the Company adopted a plan for the closure of its Oxted, England research and development facility and its El Segundo, California research and development fabrication facility. The costs associated with closing and exiting these facilities and severance costs are currently estimated to total approximately $9.0 million. Of this amount, approximately $5.4 million represents the cash outlay related to this initiative. The Company has completed the closure of the Oxted, England facility, and intends to sell the underlying real property. The El Segundo, California research and development fabrication facility is no longer used as a research and development fabrication facility. It is now used only as an R&D test and office facility. As previously noted, the initiative to close the adjoining El Segundo, California fabrication facility has been suspended for the foreseeable future, and the final exit from the El Segundo, California research and development fabrication facility will likely not occur until that time. Through fiscal year 2010, the Company incurred approximately $7.4 million of the total estimated costs under this initiative. Restructuring related cash payments were approximately $0.1 million, $0.3 million and $1.7 million during the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, respectively. Other Activities and Charges On January 15, 2009, the Company received written notification from Vishay terminating certain wafer processing services under the TPSA effective April 30, 2009. As a result, the Company recorded a charge for severance related to the partial termination of the contract during the third quarter of fiscal year 2009 of $0.9 million. The total cost related to the partial termination of the contract was $0.9 million, all of which were cash charges. Actions related to the partial termination of the contract were completed by the end of fiscal year 2009. Other Impairment Charges In addition to the Newport facility asset impairment of $48.9 million, during fiscal year 2009, the Company recorded an asset impairment of $2.8 million related to assets removed from service in its Tijuana, Mexico facility and certain contract manufacturing facilities and other facilities. Since the decision to remove these assets from service was in response to a reduction in demand and not related to an exit activity, the associated asset impairment charge was recorded in cost of sales, not in asset impairment, restructuring and other charges. |
Income Taxes (Tables)
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Jun. 26, 2011
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Income Tax Disclosure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic and Foreign Income (Loss) From Continuing Operations Before Income Taxes | Income (loss) before income taxes for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is as follows (in thousands):
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(Benefit From) Provision For Income Taxes From Continuing Operations | The (benefit from) provision for income taxes for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is as follows (in thousands):
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Effective Tax Rate Reconciliation On Pretax Income (Loss) From Continuing Operations | The Company’s effective tax rate on pretax income (loss) differs from the U.S. federal statutory tax rate for the fiscal years June 26, 2011, June 27, 2010 and June 28, 2009, as follows:
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Major Components of Net Deferred Tax Assets (Liabilities) | The major components of the net deferred tax assets (liabilities) as of June 26, 2011 and June 27, 2010 are as follows (in thousands):
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Reconciliation of Unrecognized Tax Benefits | A reconciliation of unrecognized tax benefits from June 28, 2009 to June 26, 2011 is as follows (in thousands):
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Bank Letters of Credit
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Jun. 26, 2011
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Debt Disclosure [Abstract] | Â |
Bank Letters of Credit | 6. Bank Letters of Credit As of June 26, 2011 and June 27, 2010 the Company had $1.6 million and $2.4 million, respectively, of outstanding letters of credit with a bank. These letters of credit were secured by cash collateral provided by the Company in an amount equal to their face amount. |
Bank Letters of Credit (Details) (USD $)
In Millions |
Jun. 26, 2011
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Jun. 27, 2010
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Bank Letters of Credit [Abstract] | Â | Â |
Outstanding letters of credit | $ 1.6 | $ 2.4 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) (USD $)
In Thousands, except Share data |
12 Months Ended | ||
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Jun. 26, 2011
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Jun. 28, 2009
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Other comprehensive loss: | Â | Â | Â |
Net unrealized gains (losses) on available-for-sale securities, deferred tax provision | $ 149 | $ 1,772 | $ 3,013 |
Issuance of common shares: | Â | Â | Â |
Exercise of stock options and vesting of RSU's (in shares) | 1,009,415 | 416,617 | 274,633 |
Repurchase of common stock (in shares) | 1,433,318 | 1,284,281 | 1,909,649 |
Business Acquisitions
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Jun. 26, 2011
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Business Acquisitions [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisitions | 2. Business Acquisitions CHiL Semiconductor Corporation On February 24, 2011, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) by and among International Rectifier Corporation, a Delaware corporation, Cancun Merger Corp., a Delaware corporation (“Cancun”) wholly-owned subsidiary of the Company, and CHiL Semiconductor Corporation, a Delaware corporation (“CHiL”) (collectively, the “Merger”). Pursuant to the Merger and related documents, the Company agreed to acquire CHiL for $75 million in cash subject to a working capital adjustment by means of a merger of Cancun with and into CHiL, with CHiL becoming a wholly-owned subsidiary of the Company. The Merger was closed on March 7, 2011. CHiL designs, develops and markets intelligent mixed-signal products using digital power techniques. The results of CHiL are included in the Company’s Enterprise Power (“EP”) business segment. The acquisition of CHiL has been accounted for as a business combination and has been included in the Company’s results of operations from March 7, 2011, the date the Merger was closed. CHiL contributed revenues of $2.8 million and a net loss of $3.2 million to the Company’s results for the period from acquisition through June 26, 2011. The total estimated consideration as shown in the table below is allocated to CHiL’s tangible and intangible assets and liabilities based on their estimated fair value as of the date of the completion of the transaction, March 7, 2011. The Company made adjustments to the preliminary allocation in the fourth quarter of fiscal year 2011 which resulted in changes to consideration transferred, residual amount allocated to goodwill, inventory, intangibles, net working capital and deferred taxes. The estimated consideration is allocated as follows (in thousands):
Pursuant to the Merger Agreement, $11.3 million of the cash consideration was placed in an indemnification escrow account. Subject to deductions for certain claims, net working capital adjustments and the settlement of pre-closing tax liabilities, the escrow cash will be released and distributed to the former CHiL shareholders one year after the acquisition closing date. Pursuant to the Merger Agreement, to the extent funds remain in the escrow following satisfaction of the Company’s claims and conditions set forth in the Merger Agreement are satisfied, funds would be used by the Company to pay bonuses of up to $0.8 million to certain CHiL employees if the employees remain employed by the Company in good standing one year after the acquisition closing date. These retention bonuses, if paid, would be recorded as compensation expense over the service period. Subject to the satisfaction of conditions set forth in the Merger Agreement, any portion of the $0.8 million not paid as retention bonus will be distributed to the former CHiL shareholders. Identifiable acquisition-related intangible assets and their estimated useful lives are as follows (in thousands):
The fair value of the identified intangible assets was estimated by performing a discounted cash flow analysis utilizing the “income” approach and are Level 3 measurements as described in Note 1. This approach is based on a probability weighted forecast of revenues and cash expenses associated with the respective intangible assets. The net cash flows attributable to the identified intangible assets were discounted to their present value using a rate determined by the Company based on its evaluation of the risks related to the cash flows. The useful lives of the completed technology rights are based on the number of years for which these technologies are expected to provide cash inflows. The useful life of the customer lists is based on historical patterns, the customer’s industry and the potential for growth in the customer base. The useful life of the trade name was based on the period for which the trade name will provide a benefit to the Company and the useful life of the non-compete agreement was based on the estimated period of utility of the agreement. The allocation of the purchase price resulted in the Company recognizing $46.6 million of goodwill in the EP business segment related to the acquisition. The goodwill is not deductible for tax purposes. The factors that contributed to the recognition of goodwill for this acquisition include the expansion of the Company’s product offerings in the EP segment to include digital solutions, the Company’s expectation that the acquisition will improve the cost structure and efficiencies of the CHiL operations and the premium paid for the acquisition of CHiL. Transaction costs related to the acquisition of CHiL were immaterial. Technology Acquisition On February 3, 2011, the Company entered into a Purchase and Sale Agreement (“the Agreement”) with a privately held domestic corporation, and its shareholders, to acquire tangible personal property and intellectual property (the “Technology Acquisition”) for $2.5 million in cash plus semiannual payments of $0.4 million for a period of three years and additional amounts contingent upon the achievement of certain financial and other operating results. The semiannual payments are contingent upon the continued employment of the shareholders to be employed by the Company and will be expensed as compensation expense as incurred. Any portion of the semi-annual payments not paid to the shareholders will be retained by the Company. The seller was a development stage enterprise engaged in the development of power management technology solutions. The Technology Acquisition has been accounted for as a business combination and is included in the Company’s results of operations from February 3, 2011, the date the Technology Acquisition closed. The revenues and expenses for the Technology Acquisition during this period were immaterial. The operating results of the Technology Acquisition are included in the Company’s Energy Saving Products (“ESP”) segment from the date of acquisition. The total estimated consideration for the Technology Acquisition as shown in the table below is allocated to the tangible and intangible assets and liabilities based on their estimated fair value as of the date of the completion of the transaction, February 3, 2011. Acquisition costs were not material. The consideration is allocated as follows:
The contingent consideration arrangement requires the Company to pay additional consideration to the shareholders of the seller in the Technology Acquisition based on a percentage of cumulative pro forma earnings net of cumulative losses. The fair value of the contingent consideration was estimated using a probability weighted discounted cash flow model and is a Level 3 measurement as described in Note 1. The key assumptions in applying the income approach were a discount rate of 46 percent and estimated net cash flows from operations. As of June 26, 2011, there were no significant changes in the semi-annual payments or in the range of outcomes for the contingent consideration recognized as a result of the technology acquisition. The Company identified one type of intangible asset acquired in the Technology Acquisition, completed technology rights. The fair value of the completed technology was estimated utilizing a discounted cash flow analysis using the “income” approach, a Level 3 measurement, which estimates the fair value of the asset based on a discounted cash flow approach. The completed technology has an estimated fair value of $2.9 million and will be amortized on a straight-line basis over the estimated useful life of the technology of 5 years. The useful lives of the completed technology rights are based on the number of years for which cash flows have been projected. Pro Forma Information (unaudited) The results of operations for CHiL and the Technology Acquisition have been included in the Company’s consolidated statement of operations since the consummation of the acquisitions on March 7, 2011 and February 3, 2011, respectively. The following unaudited pro forma financial information presents the combined results as if the acquisitions had occurred at the beginning of the current and prior fiscal year reporting periods (in thousands):
These amounts have been calculated after adjusting the results of CHiL and the Technology Acquisition to include the additional amortization expense that would have been charged assuming the fair value adjustments to intangible assets had been applied as of the beginning of the fiscal years 2011 and 2010. |
Segment Information (Tables)
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Jun. 26, 2011
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Segment Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue and Gross Margin by Reportable Segments | For the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, revenues and gross margin by reportable segments were as follows (in thousands, except percentages):
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Geographic Information | Revenues from unaffiliated customers are based on the location in which the sale originated. The Company includes in long-lived assets, all long-term assets excluding long-term investments, restricted cash, long-term deferred income taxes, goodwill and acquisition-related intangibles. Geographic information for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is presented below (in thousands):
During the fiscal year ended June 26, 2011, sales to two of the Company’s distribution customers were approximately 12.7 and 11.8 percent, respectively, of consolidated revenues. During the fiscal year ended June 27, 2010, sales to two of the Company’s distribution customers were approximately 13.2 and 11.2 percent, respectively, of consolidated revenues. No single customer accounted for more than ten percent of the Company’s consolidated revenues for the fiscal year ended June 28, 2009. |
Income Taxes, Tax Credit Carryforwards (Details) (USD $)
In Millions |
12 Months Ended |
---|---|
Jun. 26, 2011
|
|
Foreign Country [Member]
|
 |
Tax Credit Carryforward [Line Items] | Â |
Tax credit carryforwards | $ 45.0 |
Tax credit carryforwards, expiration dates | 2019 through 2021 |
Federal [Member] | Research Credits [Member]
|
 |
Tax Credit Carryforward [Line Items] | Â |
Tax credit carryforwards | 13.1 |
Tax credit carryforwards, expiration dates | 2026 thru 2032 |
California [Member] | Research Credits [Member]
|
 |
Tax Credit Carryforward [Line Items] | Â |
Tax credit carryforwards | 39.7 |
Tax credit carryforwards, expiration dates | no expiration |
Undistributed Earnings of Foreign Subsidiaries Considered to be Invested Indefinitely [Member]
|
 |
Deferred Tax Liability Not Recognized [Line Items] | Â |
Amount of unrecognized deferred tax liability | $ 79.1 |
Environmental Matters (Details) (USD $)
In Millions, unless otherwise specified |
Apr. 30, 2007
Former Manufacturing Plant in Italy [Member]
|
Jun. 26, 2011
OII Site [Member]
|
Aug. 31, 2001
OII Site [Member]
|
Jun. 26, 2011
Omega Site [Member]
|
---|---|---|---|---|
Site Contingency [Line Items] | Â | Â | Â | Â |
Number of former manufacturing plants where chemical compounds were discovered | 1 | Â | Â | Â |
Settlement offer received and not accepted | Â | Â | $ 9.3 | Â |
Minimum number of insurers who provided reimbursement for defense costs | Â | 1 | Â | Â |
Approximate number of defendants in litigation matter | Â | Â | Â | 100 |
Approximate distance of plaintiff's facility from Omega Site (in miles) | Â | Â | Â | 1.5 |
Estimated volumetric share of wastes sent to Omega Site (in hundredths) | Â | Â | Â | 0.08% |
Number of insurance carriers who have agreed to defend the Entity under a reservation of rights | Â | Â | Â | 1 |
Maximum volumetric share wastes sent to Omega Site (in hundredths) | Â | Â | Â | 0.10% |
Gain on Divestiture
|
12 Months Ended |
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Jun. 26, 2011
|
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Gain on Divestiture [Abstract] | Â |
Gain on Divestiture | 3. Gain on Divestiture On April 1, 2007, the Company completed the sale of its PCS Business to Vishay. After the consummation of the Divestiture, a number of matters developed that raised uncertainties under applicable accounting standards and guidance as to the determination of the gain on the Divestiture. Consequently, the Company deferred recognition of the gain from continuing operations of $116.1 million. On June 25, 2009 the Company and Vishay entered into a settlement agreement which resolved the parties’ disputes related to the Divestiture as well as the uncertainties which resulted in the deferral of the gain on Divestiture. Pursuant to the settlement agreement, the Company paid Vishay $30.0 million to settle certain claims made by Vishay and an additional $0.5 million for certain quality claims related to products manufactured by the PCS Business prior to the closing of the Divestiture transaction. Approximately $14.0 of the $15.0 million of restricted cash then held in an escrow account to secure the Company’s indemnity obligations related to the Divestiture was released and included in the $30.0 million payment to Vishay in fiscal year 2009. As a result of the resolution of the uncertainties related to the determination of the gain, the Company recognized a gain in continuing operations of $96.1 million in fiscal year 2009. The escrow account was closed in fiscal year 2011 with approximately $0.5 million being released to the Company. The Company also entered into certain transition services agreements for the sale and purchase of specified products, wafer and packaging services, manufacturing and other support services, for up to three years following the date of the Divestiture. The fair value of these transition agreements was recorded at $20.0 million for the transition services the Company was to provide to Vishay, and $3.4 million for the transition services Vishay was to provide to the Company. As a result of the partial termination of the transition services agreements and the settlement agreement with Vishay, the unamortized balances of the fair value of these agreements were reclassified to the gain on Divestiture. |
Derivative Financial Instruments (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Jun. 27, 2010
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Derivative Financial Instruments [Abstract] | Â | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Carrying Amount of Derivative Instruments | At June 26, 2011, the fair value carrying amount of the Company’s derivative instruments were as follows (in thousands):
|
At June 27, 2010, the fair value carrying amount of the Company’s derivative instruments were as follows (in thousands):
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Gain or (Loss) Recognized in Earnings on Derivative Instruments | The gain or (loss) recognized in earnings for the fiscal years ended June 26, 2011 and June 27, 2010 was comprised of the following (in thousands):
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Derivative Instruments Measured at Fair Value on a Recurring Basis | The following table presents derivative instruments measured at fair value on a recurring basis as of June 26, 2011 (in thousands):
|
The following table presents derivative instruments measured at fair value on a recurring basis as of June 27, 2010 (in thousands):
|
Quarterly Financial Data (Unaudited) (Details) (USD $)
In Thousands, except Per Share data |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Dec. 27, 2009
|
Sep. 27, 2009
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
|
Quarterly Financial Data (Unaudited) [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | $ 317,249 | $ 296,717 | $ 281,744 | $ 280,867 | $ 263,796 | $ 241,886 | $ 210,244 | $ 179,371 | $ 1,176,577 | $ 895,297 | $ 740,419 |
Cost of sales | 199,375 | 179,534 | 160,733 | 172,043 | 168,684 | 154,576 | 147,426 | 132,014 | 711,685 | 602,700 | 515,563 |
Gross profit | 117,874 | 117,183 | 121,011 | 108,824 | 95,112 | 87,310 | 62,818 | 47,357 | 464,892 | 292,597 | 224,856 |
Selling, general and administrative expense | 52,141 | 46,680 | 46,617 | 48,310 | 45,188 | 43,135 | 37,285 | 43,582 | 193,748 | 169,190 | 262,068 |
Research and development expense | 32,502 | 30,733 | 28,544 | 27,560 | 26,619 | 25,649 | 24,215 | 22,827 | 119,339 | 99,310 | 98,211 |
Impairment of goodwill | Â | Â | Â | Â | Â | Â | Â | Â | 0 | 0 | 23,867 |
Amortization of acquisition-related intangible assets | 2,612 | 1,695 | 1,242 | 1,219 | 1,094 | 1,093 | 1,094 | 1,094 | 6,768 | 4,375 | 4,408 |
Asset impairment, restructuring and other charges (recoveries) | Â | (3,489) | (4) | 134 | 35 | 117 | (30) | 167 | (3,359) | 289 | 56,493 |
Gain on divestiture | Â | Â | Â | Â | Â | Â | Â | Â | 0 | 0 | 96,136 |
Operating income (loss) | 30,619 | 41,564 | 44,612 | 31,601 | 22,176 | 17,316 | 254 | (20,313) | 148,396 | 19,433 | (124,055) |
Other expense (income), net | (954) | (1,348) | 1,708 | 1,312 | (86) | 318 | 1,009 | 778 | 718 | 2,019 | 39,717 |
Interest (income) expense, net | (1,859) | (2,694) | (4,152) | (1,409) | (2,190) | (2,573) | (2,488) | (3,970) | (10,114) | (11,221) | (11,694) |
Income (loss) before income taxes | 33,432 | 45,606 | 47,056 | 31,698 | 24,452 | 19,571 | 1,733 | (17,121) | 157,792 | 28,635 | (152,078) |
Benefit (provision) for income taxes | (6,202) | (3,879) | 3,127 | (1,800) | (4,570) | (20,816) | (26,585) | (221) | (8,754) | (52,192) | 95,339 |
Net income (loss) | $ 39,634 | $ 49,485 | $ 43,929 | $ 33,498 | $ 29,022 | $ 40,387 | $ 28,318 | $ (16,900) | $ 166,546 | $ 80,827 | $ (247,417) |
Basic [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net income (loss) per common share (in dollars per share) | $ 0.56 | $ 0.70 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.57 | $ 0.40 | $ (0.24) | $ 2.35 | $ 1.13 | $ (3.42) |
Diluted [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net income (loss) per common share (in dollars per share) | $ 0.55 | $ 0.69 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.56 | $ 0.39 | $ (0.24) | $ 2.33 | $ 1.13 | $ (3.42) |
Average common shares outstanding - basic (in shares) | 69,827 | 69,854 | 69,587 | 70,165 | 70,553 | 70,850 | 71,605 | 71,218 | 69,858 | 70,958 | 72,295 |
Average common shares and potentially dilutive securities outstanding - diluted (in shares) | 70,522 | 70,601 | 70,235 | 70,483 | 71,014 | 71,176 | 71,827 | 71,218 | 70,523 | 71,248 | 72,295 |
Net Income per Common Share (Tables)
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Net Income per Common Share [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Numerator and Denominator for Basic and Diluted Per-Share Computations | The table below provides a reconciliation of the numerator and denominator for the basic and diluted per-share computations for fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 (in thousands, except per share amounts):
For the fiscal years ended June 26, 2011 and June 27, 2010, 762,186 and 2,734,860 of common stock equivalents were anti-dilutive and were not included in the computation of diluted earnings per share for these periods, respectively, as the exercise price for these common stock equivalents was greater than the average market price of the common stock of the Company during these periods. For the fiscal year ended June 28, 2009, as a result of the net loss reported for that fiscal period, 8,144,217 of common stock equivalents were anti-dilutive and were not included in the computation of diluted earnings per share during that period. In addition, for the fiscal year ended June 26, 2011, 366,100 of contingently issuable restricted stock units for which all necessary conditions had not been met were not included in the computation of diluted earnings per share. |
Business, Basis of Presentation and Summary of Significant Accounting Policies, Goodwill, Other Accrued Expenses, and Warranty (Details) (USD $)
|
12 Months Ended | ||
---|---|---|---|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
|
Goodwill [Line Items] | Â | Â | Â |
Total goodwill | $ 74,955,000 | Â | Â |
Total goodwill | 121,570,000 | 74,955,000 | Â |
Changes in the carrying amount of goodwill [Roll Forward] | Â | Â | Â |
Impairment | 0 | 0 | (23,867,000) |
Goodwill deductible for income tax purposes | 17,200,000 | Â | Â |
Goodwill deducted for income tax purposes | 3,000,000 | 3,000,000 | 3,000,000 |
Other Accrued Expenses [Abstract] | Â | Â | Â |
Sales returns | 34,112,000 | 27,306,000 | Â |
Accrued accounting and legal costs | 9,943,000 | 10,855,000 | Â |
Deferred revenue | 16,329,000 | 10,200,000 | Â |
Accrued employee benefits | 3,733,000 | 3,422,000 | Â |
Accrued divestiture liability | 0 | 295,000 | Â |
Accrued warranty | 3,457,000 | 2,293,000 | Â |
Accrued utilities | 1,840,000 | 1,483,000 | Â |
Accrued repurchase obligation | 3,099,000 | 3,518,000 | Â |
Accrued sales and other taxes | 2,829,000 | 2,329,000 | Â |
Accrued enterprise resource planning system costs | 8,110,000 | 176,000 | Â |
Severance liability | 214,000 | 4,249,000 | Â |
Other | 13,736,000 | 9,133,000 | Â |
Total other accrued expenses | 97,402,000 | 75,259,000 | Â |
Changes in warranty reserve [Roll Forward] | Â | Â | Â |
Accrued warranty, beginning of period | 2,293,000 | 1,767,000 | 2,672,000 |
Accruals for warranties issued during the year | 5,005,000 | 4,000,000 | 3,574,000 |
Changes in estimates related to pre-existing warranties | (1,228,000) | (1,324,000) | 1,024,000 |
Warranty claim settlements | (2,613,000) | (2,150,000) | (5,503,000) |
Accrued warranty, end of period | 3,457,000 | 2,293,000 | 1,767,000 |
Energy-Saving Products [Member]
|
 |  |  |
Goodwill [Line Items] | Â | Â | Â |
Total goodwill | 33,190,000 | 33,190,000 | Â |
HiRel [Member]
|
 |  |  |
Goodwill [Line Items] | Â | Â | Â |
Total goodwill | 18,959,000 | 18,959,000 | Â |
Enterprise Power [Member]
|
 |  |  |
Goodwill [Line Items] | Â | Â | Â |
Total goodwill | 22,806,000 | Â | Â |
Total goodwill | 69,421,000 | Â | Â |
Changes in the carrying amount of goodwill [Roll Forward] | Â | Â | Â |
Additions due to acquisitions | 46,615,000 | Â | Â |
Automotive Products [Member]
|
 |  |  |
Changes in the carrying amount of goodwill [Roll Forward] | Â | Â | Â |
Impairment | Â | Â | (3,800,000) |
Intellectual Property [Member]
|
 |  |  |
Changes in the carrying amount of goodwill [Roll Forward] | Â | Â | Â |
Impairment | Â | Â | $ (20,100,000) |
Asset Impairment, Restructuring and Other Charges (Recoveries) (Tables)
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Jun. 26, 2011
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Asset Impairment, Restructuring and Other Charges (Recoveries) [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment, Restructuring and Other Charges (Recoveries) | The following table summarizes restructuring charges incurred during the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 related to the restructuring initiatives discussed below. These charges were recorded in asset impairment, restructuring and other charges (recoveries) (in thousands):
The following table summarizes the total asset impairment, restructuring and other charges (recoveries) by initiative for the fiscal years 2011, 2010 and 2009:
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Accrued Severance and Workforce Reduction Costs | The following table summarizes changes in the Company's restructuring related accruals for fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 which are included in other accrued expenses on the balance sheet (in thousands):
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Net Income per Common Share
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Jun. 26, 2011
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Net Income per Common Share [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income per Common Share | 11. Net Income per Common Share The table below provides a reconciliation of the numerator and denominator for the basic and diluted per-share computations for fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 (in thousands, except per share amounts):
For the fiscal years ended June 26, 2011 and June 27, 2010, 762,186 and 2,734,860 of common stock equivalents were anti-dilutive and were not included in the computation of diluted earnings per share for these periods, respectively, as the exercise price for these common stock equivalents was greater than the average market price of the common stock of the Company during these periods. For the fiscal year ended June 28, 2009, as a result of the net loss reported for that fiscal period, 8,144,217 of common stock equivalents were anti-dilutive and were not included in the computation of diluted earnings per share during that period. In addition, for the fiscal year ended June 26, 2011, 366,100 of contingently issuable restricted stock units for which all necessary conditions had not been met were not included in the computation of diluted earnings per share. |
Income Taxes (Details) (USD $)
|
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 26, 2011
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Jun. 26, 2011
|
Mar. 27, 2011
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Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Dec. 27, 2009
|
Sep. 27, 2009
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
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Income (loss) from continuing operations before income taxes [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Domestic | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 81,587,000 | $ (19,787,000) | $ (130,566,000) |
Foreign | Â | Â | Â | Â | Â | Â | Â | Â | Â | 76,205,000 | 48,422,000 | (21,512,000) |
Income (loss) before income taxes | Â | 33,432,000 | 45,606,000 | 47,056,000 | 31,698,000 | 24,452,000 | 19,571,000 | 1,733,000 | (17,121,000) | 157,792,000 | 28,635,000 | (152,078,000) |
Current income taxes [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Domestic | Â | Â | Â | Â | Â | Â | Â | Â | Â | 190,000 | (31,307,000) | (15,008,000) |
Foreign | Â | Â | Â | Â | Â | Â | Â | Â | Â | 10,749,000 | (15,000,000) | 6,246,000 |
Total current income tax (benefit) provision | Â | Â | Â | Â | Â | Â | Â | Â | Â | 10,939,000 | (46,307,000) | (8,762,000) |
Deferred income taxes [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Domestic | Â | Â | Â | Â | Â | Â | Â | Â | Â | (6,551,000) | (4,983,000) | 78,117,000 |
Foreign | Â | Â | Â | Â | Â | Â | Â | Â | Â | (13,142,000) | (902,000) | 25,984,000 |
Total deferred income tax (benefit) provision | Â | Â | Â | Â | Â | Â | Â | Â | Â | (19,693,000) | (5,885,000) | 104,101,000 |
Total (benefit) provision | 1,600,000 | Â | Â | Â | Â | Â | Â | Â | Â | (8,754,000) | (52,192,000) | 95,339,000 |
Tax benefit from options exercised | Â | Â | Â | Â | Â | Â | Â | Â | Â | 1,400,000 | 0 | 0 |
Effective tax rate reconciliation [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Statutory tax rate (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 35.00% | 35.00% | (35.00%) |
State taxes, net of federal benefit (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (6.00%) | 6.00% | Â |
Change in valuation allowance (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (19.20%) | (8.60%) | 105.10% |
Multijurisdictional taxation (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (9.50%) | (35.70%) | (4.70%) |
Actual and deemed foreign dividends (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2.10% | 51.30% | 23.90% |
Foreign tax credit (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (5.80%) | (21.50%) | (12.30%) |
Research and development credit (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (4.70%) | (3.10%) |
Uncertain tax positions (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (2.20%) | (205.10%) | (14.60%) |
Goodwill impairment (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 3.60% |
Other, net (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 1.00% | (0.20%) |
Effective tax rate (benefit) (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | (5.60%) | (182.30%) | 62.70% |
Deferred tax assets [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Accrued expenses | Â | 14,436,000 | Â | Â | Â | 16,348,000 | Â | Â | Â | 14,436,000 | 16,348,000 | Â |
Accrued compensation | Â | 22,717,000 | Â | Â | Â | 18,501,000 | Â | Â | Â | 22,717,000 | 18,501,000 | Â |
Property, plant and equipment | Â | 50,053,000 | Â | Â | Â | 63,975,000 | Â | Â | Â | 50,053,000 | 63,975,000 | Â |
Unrealized loss on securities | Â | Â | Â | Â | Â | 318,000 | Â | Â | Â | Â | 318,000 | Â |
Losses carryforward | Â | 55,784,000 | Â | Â | Â | 58,477,000 | Â | Â | Â | 55,784,000 | 58,477,000 | Â |
Research and experimental credits | Â | 43,463,000 | Â | Â | Â | 39,302,000 | Â | Â | Â | 43,463,000 | 39,302,000 | Â |
Other tax credits | Â | 22,683,000 | Â | Â | Â | 25,752,000 | Â | Â | Â | 22,683,000 | 25,752,000 | Â |
Other | Â | 1,332,000 | Â | Â | Â | 22,350,000 | Â | Â | Â | 1,332,000 | 22,350,000 | Â |
Total deferred tax assets | Â | 210,468,000 | Â | Â | Â | 245,023,000 | Â | Â | Â | 210,468,000 | 245,023,000 | Â |
Valuation allowance | Â | (182,563,000) | Â | Â | Â | (236,405,000) | Â | Â | Â | (182,563,000) | (236,405,000) | Â |
Deferred tax liabilities [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Unrealized gain on securities | Â | (4,637,000) | Â | Â | Â | (4,682,000) | Â | Â | Â | (4,637,000) | (4,682,000) | Â |
Prepaid expenses | Â | (1,538,000) | Â | Â | Â | Â | Â | Â | Â | (1,538,000) | Â | Â |
Other | Â | (224,000) | Â | Â | Â | (1,133,000) | Â | Â | Â | (224,000) | (1,133,000) | Â |
Total deferred tax liabilities | Â | (6,399,000) | Â | Â | Â | (5,815,000) | Â | Â | Â | (6,399,000) | (5,815,000) | Â |
Net deferred tax assets | Â | 21,506,000 | Â | Â | Â | 2,803,000 | Â | Â | Â | 21,506,000 | 2,803,000 | Â |
Change in deferred tax assets [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Deferred charge recorded | Â | Â | Â | Â | Â | Â | Â | Â | Â | 14,600,000 | Â | Â |
Reduction in deferred tax asset due to deferred charge | Â | Â | Â | Â | Â | Â | Â | Â | Â | 14,600,000 | Â | Â |
Reduction in associated valuation allowance due to deferred charge | Â | Â | Â | Â | Â | Â | Â | Â | Â | 800,000 | Â | Â |
Income tax adjustments [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Federal income tax refunds received | Â | Â | Â | Â | Â | Â | Â | Â | Â | 5,200,000 | 18,900,000 | Â |
State taxes and related interest and penalties paid | Â | Â | Â | Â | Â | Â | Â | Â | Â | 800,000 | 1,300,000 | Â |
Reduction of statutory tax rate in U.K. [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Statutory tax rate in the U.K., prior to reduction (in hundredths) | 27.00% | Â | Â | Â | 28.00% | Â | Â | Â | Â | Â | Â | Â |
Statutory tax rate in the U.K., subsequent to reduction (in hundredths) | 26.00% | Â | Â | Â | 27.00% | Â | Â | Â | Â | Â | Â | Â |
Statutory tax rate in the U.K., further reduction (in hundredths) | 25.00% | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Impact of rate reduction on deferred tax assets | 3,400,000 | Â | Â | Â | 200,000 | Â | Â | Â | Â | Â | Â | Â |
Impact of rate reduction on valuation allowance | 2,700,000 | Â | Â | Â | 2,400,000 | Â | Â | Â | Â | Â | Â | Â |
Reconciliation of unrecognized tax benefits [Roll Forward] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Beginning balance | 46,057,000 | Â | Â | Â | 45,212,000 | Â | Â | Â | 66,224,000 | 45,212,000 | 66,224,000 | Â |
Increases for positions taken in current year | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2,708,000 | 23,738,000 | Â |
Increases for positions taken in a prior year | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2,347,000 | 6,506,000 | Â |
Decreases for positions taken in a prior year | Â | Â | Â | Â | Â | Â | Â | Â | Â | (1,810,000) | 11,548,000 | Â |
Decreases for settlements with taxing authorities | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 35,275,000 | Â |
Decreases for lapses in the applicable statute of limitation | Â | Â | Â | Â | Â | Â | Â | Â | Â | (2,400,000) | 4,433,000 | Â |
Unrecognized tax benefits | Â | 46,057,000 | Â | Â | Â | 45,212,000 | Â | Â | Â | 46,057,000 | 45,212,000 | 66,224,000 |
Liability for income tax associated with uncertain tax positions | Â | 17,100,000 | Â | Â | Â | Â | Â | Â | Â | 17,100,000 | Â | Â |
Benefit to income taxes if the liability associated with uncertain tax positions were recognized | Â | Â | Â | Â | Â | Â | Â | Â | Â | 11,200,000 | Â | Â |
Increases to uncertain tax positions that would affect effective tax rate, if recognized | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2,900,000 | Â | Â |
Accrued interest and penalties related to uncertain tax positions | Â | 2,900,000 | Â | Â | Â | 4,200,000 | Â | Â | Â | 2,900,000 | 4,200,000 | Â |
Expected increase (decrease) in uncertain tax positions during the next twelve months | Â | 2,500,000 | Â | Â | Â | Â | Â | Â | Â | 2,500,000 | Â | Â |
California deferred tax assets, portion more likely than not to be realized [Member]
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 |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Valuation allowance, deferred tax asset, change in amount | Â | Â | Â | Â | Â | Â | Â | Â | Â | 10,300,000 | Â | Â |
Deferred tax assets in U.K., portion more likely than not to be realized [Member]
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 |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Valuation allowance, deferred tax asset, change in amount | Â | Â | Â | Â | Â | Â | Â | Â | Â | 9,600,000 | Â | Â |
Deferred tax assets in U.K., portion reduced due to taxable income [Member]
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 |  |  |  |  |  |  |  |  |  |  |  |
Valuation Allowance [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Valuation allowance, deferred tax asset, change in amount | Â | Â | Â | Â | Â | Â | Â | Â | Â | 18,400,000 | Â | Â |
Technology Acquisition [Member]
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Business Acquisition [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Deferred tax assets recorded from business combination, gross | Â | 200,000 | Â | Â | Â | Â | Â | Â | Â | 200,000 | Â | Â |
Deferred tax liabilities recorded from business combination | Â | 200,000 | Â | Â | Â | Â | Â | Â | Â | 200,000 | Â | Â |
CHiL Semiconductor Corporation [Member]
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Business Acquisition [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Deferred tax assets recorded from business combination, gross | Â | 16,700,000 | Â | Â | Â | Â | Â | Â | Â | 16,700,000 | Â | Â |
Valuation allowance recorded from business combination | Â | 6,700,000 | Â | Â | Â | Â | Â | Â | Â | 6,700,000 | Â | Â |
Deferred tax liabilities recorded from business combination | Â | 10,055,000 | Â | Â | Â | Â | Â | Â | Â | 10,055,000 | Â | Â |
Additional goodwill recorded from business combination | Â | 200,000 | Â | Â | Â | Â | Â | Â | Â | 200,000 | Â | Â |
Other liabilities recorded from business combination | Â | 160,000 | Â | Â | Â | Â | Â | Â | Â | 160,000 | Â | Â |
Federal operating losses acquired | Â | 31,700,000 | Â | Â | Â | Â | Â | Â | Â | 31,700,000 | Â | Â |
Federal tax credits acquired | Â | 1,100,000 | Â | Â | Â | Â | Â | Â | Â | 1,100,000 | Â | Â |
State operating losses acquired - Massachusetts | Â | 100,000 | Â | Â | Â | Â | Â | Â | Â | 100,000 | Â | Â |
State tax credits acquired - Massachusetts | Â | 100,000 | Â | Â | Â | Â | Â | Â | Â | 100,000 | Â | Â |
Singapore [Member]
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Income Tax Holiday [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Benefit due to holiday | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 2,000,000 | Â | Â |
Benefit on net income per share (diluted) (in dollars per share) | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 0.03 | Â | Â |
Effective tax rate (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 15.00% | Â | Â |
Commitments and Contingencies (Details) (USD $)
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12 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2011
Real Estate and Equipment [Member]
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Jun. 27, 2010
Real Estate and Equipment [Member]
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Jun. 28, 2009
Real Estate and Equipment [Member]
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Jun. 26, 2011
Power Control Systems [Member]
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Jul. 01, 2007
Power Control Systems [Member]
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Jun. 27, 2010
Power Control Systems [Member]
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Jun. 28, 2009
Power Control Systems [Member]
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Jun. 29, 2008
Power Control Systems [Member]
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Jun. 26, 2011
Capital Expenditures [Member]
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Jun. 26, 2011
Inventories Under 2011 Agreement [Member]
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Feb. 03, 2011
Technology Acquisition [Member]
|
|
Operating lease, rent expense [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total rental expense on all operating leases | $ 9,800,000 | $ 10,200,000 | $ 11,500,000 | Â | Â | Â | Â | Â | Â | Â | Â |
Minimum fixed rentals required under operating leases [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fiscal year 2012 | 9,400,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fiscal year 2013 | 4,200,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fiscal year 2014 | 2,900,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fiscal year 2015 | 2,100,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Fiscal year 2016 | 1,100,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Thereafter | 2,100,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Total | 21,800,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Divested entities tax obligations [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Provision recorded for certain tax obligations with respect to divested entities | Â | Â | Â | Â | 18,600,000 | Â | Â | Â | Â | Â | Â |
Net release recorded in tax obligations related to divested entities | Â | Â | Â | 1,500,000 | Â | Â | Â | Â | Â | Â | Â |
Balance of the divested entities tax obligations | Â | Â | Â | 4,000,000 | Â | 5,500,000 | 7,300,000 | 20,700,000 | Â | Â | Â |
Long-term Purchase Commitment [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Outstanding purchase commitment amount | Â | Â | Â | Â | Â | Â | Â | Â | 23,500,000 | Â | Â |
Number of external foundries with which agreements were made to secure wafer fabrication capacity | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2 | Â |
Amount advanced to the foundries on account of future purchases | Â | Â | Â | Â | Â | Â | Â | Â | Â | 5,800,000 | Â |
Time period of agreements to purchase minimum quantities of wafers each quarter (in years) | Â | Â | Â | Â | Â | Â | Â | Â | Â | 2Y | Â |
Amount subject to provisions requiring forfeiture if minimum purchase commitment is not met | Â | Â | Â | Â | Â | Â | Â | Â | Â | 4,800,000 | Â |
Business Acquisition, Contingent Consideration [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Contingent consideration liability resulting from acquisition | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | $ 400,000 |
Investments
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Jun. 26, 2011
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Investments, Debt and Equity Securities [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | 4. Investments Available-for-sale investments are carried at fair value, inclusive of unrealized gains and losses, and net of discount accretion and premium amortization computed using the level yield method. Net unrealized gains and losses are included in other comprehensive income (loss) net of applicable income taxes. Gains or losses on sales of available-for-sale investments are recognized on the specific identification basis. Available-for-sale securities as of June 26, 2011 are summarized as follows (in thousands):
Available-for-sale securities as of June 27, 2010 are summarized as follows (in thousands):
The Company manages its total portfolio to encompass a diversified pool of investment-grade securities. The investment policy is to manage its total cash and investments balances to preserve principal and maintain liquidity while maximizing the returns on the investment portfolio. The Company holds as strategic investments the common stock of three publicly traded foreign companies and the common stock and preferred stock of a privately held domestic company. The common stock and preferred stock of the privately held domestic company are carried at cost of $1.5 million in other assets. In addition, the Company has a note payable from a privately held company which it carries at cost of $0.4 million. These investments are carried at cost as the Company has determined that it is not practicable to estimate the fair value of these investments given that the issuers are start-up companies whose securities are not publicly traded. As of June 26, 2011, there have been no developments which would indicate the value of these investments has been impaired. The common stock of the three publicly traded foreign companies are shown as “Equity Securities” in the table above and are included in other assets on the consolidated balance sheets. The common shares of the publicly traded companies are traded on either the Tokyo Stock Exchange or the Taiwan Stock Exchange. The Company holds an option on one of the strategic investments to put the associated number of common shares back to the issuer at a fixed price in local currency. The put option became effective September 1, 2009 and is reported at fair value. As of June 26, 2011, the fair value of the option was $2.8 million, with changes in fair value recorded in other (income)/expense, net (See Note 5, “Derivative Financial Instruments”). Dividend income from these investments was $0.1 million, $0.1 million, and $0.3 million for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively. The Company evaluates securities for other-than-temporary impairment on a quarterly basis. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer of the securities; and the intent and ability of the Company to retain the security in order to allow for an anticipated recovery in fair value. If, based upon the analysis, it is determined that the impairment is other-than-temporary, the security is written down to fair value, and a loss is recognized through earnings. Other-than-temporary impairments relating to certain available-for-sale securities for the fiscal year ended June 26, 2011, June 27, 2010 and June 28, 2009 were $1.4 million, $3.4 million and $39.2 million, respectively. During fiscal 2011, the Company determined that two equity investments were other-than-temporarily impaired and recorded impairment charges of $1.4 million. During fiscal year 2010, the Company recorded impairment charges related to the mortgage-backed and asset-backed securities of $0.9 million and $2.5 million related to two equity investments, respectively. During fiscal year 2009, the Company determined that mortgage-backed securities, asset-backed securities, and corporate bonds with stated maturities ranging from 1 to 27 years (expected maturity from 3 months to 20 years) and an equity investment were other-than-temporarily impaired and, as a result, recorded impairment charges of $33.3 million related to its investment in mortgage-back securities and asset-backed securities and $5.9 million related to its equity investment. In connection with the Company's quarterly fiscal year 2010 reviews of its available-for-sale securities, the Company noted that the issuer of one of the Company’s equity investments had initiated a reorganization. As a result of this reorganization, the Company did not believe the security will recover its value. The Company determined that the security was other-than-temporarily impaired and recorded an impairment charge of $1.3 million during the fourth quarter of fiscal year 2010. During fiscal year 2011, the Company performed a similar analysis of this investment and recorded an additional impairment charge of $0.5 million in the first quarter of fiscal 2011. In addition, the Company determined, during the first quarter of fiscal year 2010 that another of its equity investments was significantly below the original purchase cost and had been for a prolonged period of time. The Company has the intent and ability to hold this investment indefinitely. However, in the Company's judgment, the security's value may not recover to its purchase cost. Accordingly, the Company has determined that this investment was other-than-temporarily impaired due to the prolonged downturn in the overall market and recorded impairment charges of $1.2 million in fiscal year 2010 and $0.9 million in fiscal year 2011. In reaching its conclusion, the Company reviewed the financial statements of the issuer investment activity in the issuer and price trends for the security. During the third quarter of fiscal year 2009 the Company performed a similar analysis of another equity investment and determined that the investment was other-than-temporarily impaired and recorded an impairment charge of $5.9 million. As of June 26, 2011, the Company had no available-for-sale investments that were in gross unrealized loss position. The following table summarizes the fair value and gross unrealized losses related to available-for-sale investments, aggregated by type of investment and length of time that individual securities have been held as of June 27, 2010. The unrealized loss position is measured and determined at each fiscal year end (in thousands):
The amortized cost and estimated fair value of investments at June 26, 2011, by contractual maturity, are as follows (in thousands):
In accordance with the Company’s investment policy which limits the length of time that cash may be invested, the expected disposal dates may be less than the contractual maturity dates as indicated in the table above. Gross realized gains and (losses) were $8.2 million and $(0.3) million, respectively, for the fiscal year ended June 26, 2011. Gross realized gains and (losses) were $6.5 million and $0 million, respectively, for the fiscal year ended June 27, 2010. Gross realized gains and (losses) were $5.8 million and $(9.2) million, respectively, for the fiscal year ended June 28, 2009. The cost of marketable securities sold was determined by the first-in, first-out method. During the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 as a result of sales of available-for-sale securities and recognition of other-than-temporary impairments on available-for-sale securities, the Company reclassified $5.6 million, $1.8 million and $37.1 million, respectively, from accumulated other comprehensive income to earnings either as a component of interest expense (income) or other expense depending on the nature of the gain (loss). Fair Value of Investments The following tables present the balances of investments measured at fair value on a recurring basis (in thousands):
The following tables present the balances of investments measured at fair value on a recurring basis (in thousands):
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Litigation
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12 Months Ended |
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Jun. 26, 2011
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Litigation [Abstract] | Â |
Litigation | 14. Litigation Litigation from Vishay Proposal. In August 2008, shortly after the Company's disclosure that Vishay Intertechnology, Inc. ("Vishay") had made an unsolicited, non-binding proposal to acquire all outstanding shares of the Company, a purported class action complaint captioned Hui Zhao v. International Rectifier Corporation, No. BC396461, was filed in the Superior Court of the State of California for the County of Los Angeles. The complaint named as defendants the Company and all of its directors and alleged that the Vishay proposal was unfair and that acceptance of the offer would constitute a breach of fiduciary duty by the Board. In October 2008, the case was consolidated with five other substantially similar complaints seeking the same relief. Later in October 2008, plaintiffs filed a consolidated amended complaint purporting to allege claims for breach of fiduciary duty on behalf of a putative class of investors based on the theory that the Board breached its fiduciary duty by rejecting the Vishay proposal. In April 2009, the Superior Court sustained the Company’s demurrer to the amended complaint on the ground that the action should have been brought not as a class action but as a shareholder derivative action, and ordered the action to be dismissed with prejudice. In June 2009, plaintiffs filed a notice of appeal from the final judgment of dismissal. On June 20, 2011, the Court of Appeal affirmed the Superior Court’s order sustaining the demurrer, but reversed the portion of the order that dismissed the action with prejudice. The Court of Appeal remanded the case to the Superior Court with directions to permit plaintiffs leave to file a second amended complaint to attempt to plead a shareholder derivative action. If plaintiffs choose to file an amended complaint, their deadline for doing so is approximately September 21, 2011. In the event plaintiffs file an amended complaint per the Court of Appeal’s direction, the Company expects that the members of the Board of Directors who may be named as defendants in that action will defend themselves vigorously. EPC/Lidow Litigation. In September 2008, the Company filed suit in the U.S. District Court for the Central District of California against Efficient Power Conversion Corp. ("EPC"), certain of EPC's employees and other defendants (including Alex Lidow, a former chief executive officer and director of the Company, and now a principal of EPC) alleging improper and unauthorized use and/or misappropriation of certain Company confidential information, trade secrets and technology related to the Company's Gallium Nitride development program. In March 2009, the Company refiled the suit in the Los Angeles Superior Court, Case No. BC409749, and in March 2009, Alex Lidow and EPC filed suit in the Los Angeles Superior Court, Case No. BC409750, against the Company alleging claims arising out of Lidow's employment with and separation from the Company, for violations of the California Labor Code and California Business and Professions Code, and alleging the Company unfairly competed and interfered with EPC. In September 2009, EPC dismissed its claims from the complaint in Case No. BC409750, and refiled its claims as a cross-complaint in case No. BC409749. Discovery is ongoing in those cases and no trial date is currently set. The Company intends to vigorously pursue its rights in and defend against both actions. Angeles. v. Omega. See Note 12, "Environmental Matters." In addition to the above, the Company is involved in certain legal matters that arise in the ordinary course of business. The Company intends to pursue its rights and defend against any claims brought by third parties vigorously. However, because of the nature and inherent uncertainties of litigation, should the outcome of these actions be unfavorable, the Company's business, financial condition, results of operations or cash flows could be materially and adversely affected. |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) (USD $)
In Thousands |
12 Months Ended | ||
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Jun. 26, 2011
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Jun. 27, 2010
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Jun. 28, 2009
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Movement in valuation allowances and reserves [Roll Forward] | Â | Â | Â |
Balance at end of year | $ 2,424 | Â | Â |
Accounts Receivable Reserve [Member]
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Movement in valuation allowances and reserves [Roll Forward] | Â | Â | Â |
Balance at beginning of year | 3,725 | 5,102 | 6,525 |
Additions (reductions) charged to costs and expenses | 2,731 | 1,910 | 6,660 |
Deductions | (4,032) | (3,287) | (8,083) |
Balance at end of year | 2,424 | 3,725 | 5,102 |
Deferred Income Tax Valuation Allowance [Member]
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Movement in valuation allowances and reserves [Roll Forward] | Â | Â | Â |
Balance at beginning of year | 236,405 | 248,666 | 78,142 |
Additions (reductions) charged to costs and expenses | 100 | 1,680 | 184,333 |
Deductions | (53,942) | (13,941) | (13,809) |
Balance at end of year | $ 182,563 | $ 236,405 | $ 248,666 |
Business, Basis of Presentation and Summary of Significant Accounting Policies, Acquisition-Related Intangible Assets (Details) (Privately Held Domestic Company [Member])
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12 Months Ended |
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Jun. 26, 2011
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Privately Held Domestic Company [Member]
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Acquired Finite-Lived Intangible Assets [Line Items] | Â |
Estimated life of acquired intangible assets (in years) | 11 |
Stock-Based Compensation and Employee Benefit Plans (Tables)
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Jun. 26, 2011
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Compensation and Retirement Disclosure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | The following table summarizes the stock option activity for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 (in thousands, except per share price data):
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Restricted Stock Unit Activity | The following table summarizes the RSU activity for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009 (in thousands, except per share price data):
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Summary of Stock Options By Exercise Price Range | The following table summarizes the stock options outstanding at June 26, 2011, and the related weighted average price and life information (in thousands, except year and price data):
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Additional Information Relating to Stock Options and RSU's | Additional information relating to the stock-based compensation plans, including employee stock options and RSUs, at June 26, 2011, June 27, 2010, and June 28, 2009, is as follows (in thousands):
Forfeitures are estimated at the time of grant. Based on the Company’s historical exercise and termination data, a five percent forfeiture rate is assumed for the majority of the options. |
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Stock-Based Compensation Expense | For the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, stock-based compensation expense associated with the Company’s stock options and RSUs, is as follows (in thousands):
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Stock Options Valuation Assumptions | The fair value of the stock options associated with the above compensation expense for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively, was determined at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:
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Quarterly Financial Data (Unaudited)
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Jun. 26, 2011
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Quarterly Financial Data (Unaudited) [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | 15. Quarterly Financial Data (Unaudited) The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal year ended June 26, 2011 (in thousands, except per share data):
The following table sets forth a summary of the Company’s quarterly financial information for each of the four quarters in the fiscal year ended June 27, 2010 (in thousands, except per share data):
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Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies)
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12 Months Ended | |||||||||
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Jun. 26, 2011
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Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | Â | |||||||||
Basis of Presentation and Consolidation | The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries, which are located in North America, Europe, and Asia. Intercompany balances and transactions have been eliminated in consolidation. |
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Fiscal Year | The Company operates on a 52-53 week fiscal year with the fiscal year ending on the last Sunday in June. Fiscal quarters consist of 13 weeks ending on the last Sunday of the calendar quarter. |
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Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported revenues and expenses during the reporting period. Actual results may differ from those estimates. |
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Subsequent Events | The Company evaluates events subsequent to the end of the fiscal year through the date the financial statements are filed with the Securities and Exchange Commission for recognition or disclosure in the consolidated financial statements. Events that provide additional evidence about material conditions that existed at the date of the balance sheet are evaluated for recognition in the consolidated financial statements. Events that provide evidence about conditions that did not exist at the date of the balance sheet but occurred after the balance sheet date are evaluated for disclosure in the notes to the consolidated financial statements. |
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Revenue Recognition and Allowances | Revenue is recognized when there is persuasive evidence of an arrangement, the price to the buyer is fixed or determinable, collection is reasonably assured, and delivery or performance of service has occurred. The Company recognizes revenue upon shipment or upon delivery, depending on specific contractual terms and/or shipping terms with the customer. If title transfer and risk of loss are addressed explicitly in a customer contract or by reference to the standard terms and conditions, those stated terms determine whether the recognition of revenue on product sales to that customer shall be upon either shipment or delivery. If the contract is silent and lacks reference to the Company's standard terms and conditions, and barring other contrary information, transfer of title and risk of loss will follow the historical shipping terms for that customer. If revenue is to be recognized upon delivery, such delivery date is tracked through information provided by the third party shipping company used by the Company to deliver the product to the customer. Generally, the Company recognizes revenue on sales to distributors using the "sell in" method (i.e. when product is sold to the distributor) rather than the "sell through" method (i.e. when the product is sold by the distributor to the end user). Certain distributors and other customers have limited rights of return (including stock rotation rights) and/or are entitled to price protection, where a rebate credit may be provided to the customer if the Company lowers its price on products held in the distributor's inventory. Additionally, in certain limited cases, the Company may pre-approve a credit to a distributor to facilitate a particular sale by the distributor to an end customer. The Company estimates and establishes allowances for expected future product returns at the time of sale. The Company records a reduction in revenue for estimated future product returns and future credits to be issued to the customer in the period in which revenues are recognized, and for future credits to be issued in relation to price protection at the time the Company makes changes to its distributor price book. The estimate of future returns and credits is based on historical sales returns, analysis of credit memo data, and other factors known at the time of revenue recognition. The Company monitors product returns and potential price adjustments on an ongoing basis. The Company also maintains consignment inventory arrangements with certain of its customers. Pursuant to these arrangements, the Company delivers products to a customer or a designated third party warehouse based upon the customer's projected needs, but does not recognize revenue unless and until the customer reports that it has removed the product from the warehouse to incorporate into its end products, assuming all the other revenue recognition criteria are met. The Company recognizes royalty revenue in accordance with agreed upon terms when performance obligations are satisfied, the amount is fixed or determinable, and collectability is reasonably assured. The amount of royalties recognized is often calculated based on the licensees' periodic reporting to the Company. Any upfront payments are recognized as revenue only if there is no continuing performance obligation when the license commences and collectability is reasonably assured. Otherwise, revenue is amortized over the life of the license or according to performance obligations outlined in the license agreement. If the Company’s customers’ contracts contain substantive acceptance provisions the Company recognizes revenue in accordance with the specific contract acceptance provisions in these circumstances. Sales and other taxes directly imposed on revenue-producing transactions are reported on a net (excluded from revenue) basis. |
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Shipping Costs | Outbound customer shipping costs are expensed as incurred and are included in selling, general and administrative expense. | |||||||||
Advertising Costs | Advertising costs are expensed as incurred and are included in selling, general and administrative expense. | |||||||||
Research and Development Costs | Research and development (“R&D”) costs, including salaries, departmental general overhead, and allocated expenses, are expensed as incurred. |
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Environmental Costs | The Company accrues for costs associated with environmental remediation obligations when such losses are probable and reasonably estimable and adjusts its estimates as new facts and circumstances come to its attention. Costs incurred to investigate and remediate contaminated sites are expensed when these costs are identified and estimable and are not discounted to their present value. |
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Income Taxes | Deferred income taxes are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted rates in effect during the year in which the differences are expected to reverse. This process requires estimating both the Company’s geographic mix of taxable income, and its current tax exposures in each jurisdiction where it operates. These estimates involve complex issues, require extended periods of time to resolve, and require the Company to make judgments, such as anticipating the positions that it will take on tax returns prior to actually preparing the returns and the outcomes of disputes with tax authorities. The Company is also required to measure and record deferred tax assets and liabilities and estimate the period of time over which the deferred tax assets will be realized. Realization of deferred tax assets is dependent upon generating sufficient taxable income, carryback of losses offsetting deferred tax liabilities, and the availability of tax planning strategies. Valuation allowances are established for the deferred tax assets that the Company believes do not meet the “more likely than not” criteria. Judgments regarding future taxable income may be revised due to changes in market conditions, tax laws, or other factors. If the Company’s assumptions and estimates change in the future, the valuation allowances established may be increased, resulting in increased income tax expense. Conversely, if the Company is ultimately able to use all or a portion of the deferred tax assets for which a valuation allowance has been established, the related portion of the valuation allowance will be released to reduce income tax expense or goodwill, credit other comprehensive income, or credit additional paid-in capital, as applicable. Income tax expense is the tax payable for the period and the change during the period in deferred tax assets and liabilities recorded in the Company’s tax provision. The Company recognizes any interest and penalties associated with income taxes in income tax expense. |
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Unremitted Earnings in Foreign Investment | Determination of the amount of unrecognized deferred tax liabilities for temporary differences related to investments in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. |
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Income Tax Uncertainties | The Company recognizes certain tax liabilities for anticipated tax audit findings in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which additional taxes would be due. If the audit findings result in actual taxes owed more or less than what the Company had anticipated, its income tax expense would be increased or decreased, accordingly, in the period of the determination. |
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Net Income (Loss) per Common Share | Net income (loss) per common share—basic is computed using the two-class method with net income (loss) available to common stockholders (the numerator) divided by the weighted average number of common shares outstanding (the denominator) during the period. In general, the computation of net (loss) income per common share—diluted is similar to the computation of net income per common share—basic except that the denominator is increased to include the number of additional common shares that would have been outstanding upon the exercise of stock options and vesting of restricted stock units using the treasury stock method. Under the treasury stock method, the Company reduces the gross number of dilutive shares by the number of shares purchasable from the proceeds of the options assumed to be exercised and restricted stock units vested, and related unrecognized compensation. Net income available to common stockholders is determined using the two-class method which requires that net income be allocated between the weighted average common shares outstanding and the weighted average participating securities outstanding for the period. For fiscal years 2011, 2010, and 2009, the Company’s participating securities are the unvested, outstanding restricted stock units (“RSUs”) that have the right to receive dividend equivalents. For periods with net losses, participating securities are anti-dilutive and are not allocated net losses. |
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Fair Value of Financial Instruments | Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels (with Level 3 being the lowest) defined as follows:
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Other-Than-Temporary Impairments of Investments | The Company evaluates securities for other-than-temporary impairment on a quarterly basis. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include the length of time and extent to which the market value has been less than cost, the financial condition and near-term prospects of the issuer of the securities, the Company’s intent to sell, or whether it is more likely than not that it will be required to sell, the investment before anticipated recovery in fair value. If, based upon the analysis, it is determined that the impairment is other-than-temporary, the security is written down to fair value, and a loss is recognized through earnings as a component of other (income)/expense, net. |
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Cash, Restricted Cash, Cash Equivalents, and Investments | The Company classifies all highly liquid investments purchased with original or remaining maturities of ninety days or less at the date of purchase to be cash equivalents. The cost of these investments approximates their fair value. The Company invests excess cash in marketable securities consisting of available-for-sale fixed income securities, as well as strategic investments in the common stock and preferred stock of publicly traded foreign companies. Unrealized gains and losses on these investments are included in other comprehensive income, a separate component of stockholders’ equity, net of any related tax effect. Realized gains and losses are included in other expense. Declines in value of these investments judged by management to be other-than-temporary, if any, are included in other expense, net. Investments in non-marketable securities are carried at cost as the Company does not exert significant influence over any of its investments. The Company evaluates the carrying value of its investments for impairment on a periodic basis. Marketable and non-marketable equity securities are classified as long-term assets in the Company’s consolidated balance sheet. The Company manages its total portfolio to encompass a diversified pool of investment-grade securities. The Company’s investment policy is to manage its total cash and investments balances to preserve principal and maintain liquidity while maximizing the returns on the investment portfolio. |
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Inventories | Inventories are stated at the lower of cost (generally first-in, first-out) or market. Inventories are reviewed for excess or obsolescence based upon demand forecasts for a specific time horizon and reserves are established accordingly. Manufacturing costs deemed to be abnormal, such as idle facility expense, excessive spoilage, double freight and re-handling costs are charged as cost of sales in the period incurred. |
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Property, Plant and Equipment | Property, plant and equipment are stated at cost. Any gain or loss on retirement or disposition is included in operating expenses. Amortization of improvements to leased premises is recorded using the straight-line method over the shorter of the remaining term of the lease or estimated useful lives of the improvements. Repairs and maintenance costs are charged to expense as incurred. The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Such events and circumstances include, but are not limited to:
The Company evaluates the recoverability of long-lived assets based on the expected undiscounted cash flows for their asset group. |
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Goodwill and Intangible Assets | The Company classifies the difference between the consideration transferred and the fair value of any noncontrolling interest in the acquiree and the fair value of net assets acquired at the date of acquisition as goodwill. The Company classifies intangible assets apart from goodwill if the assets have contractual or other legal rights, or if the assets can be separated and sold, transferred, licensed, rented or exchanged. Depending on the nature of the assets acquired, the amortization period may range from two to 15 years for those acquisition-related intangible assets subject to amortization. The Company evaluates the carrying value of long-lived assets, including goodwill, on an ongoing basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company evaluates the carrying value of the goodwill and other intangible assets annually during the fourth quarter of each fiscal year and more frequently if it believes indicators of impairment exist. In evaluating goodwill, a two-step goodwill impairment test is applied to each reporting unit. The Company identifies reporting units and determines the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. In the first step of the impairment test, the Company estimates the fair value of the reporting unit. If the fair value of the reporting unit is less than the carrying value of the reporting unit, the Company performs the second step which compares the implied fair value of goodwill with the carrying amount of goodwill and writes down the carrying amount of the goodwill to the implied fair value. The fair value of the Company’s reporting units is determined using the income approach, which estimates fair value of its reporting units based on a discounted cash flow approach. The discount rate the Company utilized for determining discounted cash flows was 14% based upon its assessment of the risks associated with the projected cash flows and market based estimates of capital costs. In completing the goodwill impairment analysis, the Company tests the appropriateness of reporting units estimated fair value by reconciling the aggregate reporting units fair values with its market capitalization. The determination of the fair value of the reporting units requires the Company to make significant estimates and assumptions. These estimates and assumptions include estimates of future revenues and expense growth rates, capital expenditures and the depreciation and amortization, changes in working capital, discount rates, and the selection of appropriate control premiums. Due to the inherent uncertainty involved in making these estimates, actual future results related to assumed variables could differ from these estimates. Changes in assumptions regarding future results or other underlying assumptions would have a significant impact on either the fair value of the reporting unit or the amount of the goodwill impairment charge. |
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Warranty | The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under the terms of its warranty agreements. The specific warranty terms and conditions vary depending upon product sold and the country in which the Company does business. In general, for standard products, the Company will replace defective parts not meeting the Company’s published specifications at no cost to the customers. Factors that affect the liability include historical and anticipated failure rates of products sold, and cost per claim to satisfy the warranty obligation. If actual results differ from the estimates, the Company revises its estimated warranty liability to reflect such changes. |
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Derivative Financial Instruments | The Company’s primary objectives for holding derivative financial instruments are to hedge non-functional currency risks. The Company’s derivative instruments are recorded at fair value and are included in other long-term assets and other accrued liabilities. The Company’s accounting policies for derivative financial instruments are based on the criteria for designation of a hedging transaction as an accounting hedge, either as cash flow or fair value hedges. A cash flow hedge refers to the hedge of the exposure to variability in the cash flows of an asset or a liability, or of a forecasted transaction. A fair value hedge refers to the hedge of the exposure to changes in fair value of an asset or a liability, or of an unrecognized firm commitment. The criteria for designating a derivative as a hedge include the instrument’s effectiveness in risk reduction and, in most cases, a one-to-one matching of the derivative instrument to its underlying transaction. Gains and losses from derivatives designated as fair value accounting hedges generally offset changes in the values of the hedged assets or liabilities over the life of the hedge. The Company recognizes gains and losses on derivatives that are not currently designated as hedges for accounting purposes in earnings in other (income) expense, net. | |||||||||
Foreign Currency Translation | In most cases, the functional currency of a foreign operation is deemed to be the local country’s currency. Assets and liabilities of operations outside the United States are translated into U.S. reporting currency using current exchange rates. Revenues and expenses denominated in foreign functional currencies are translated at the average exchange rates during the period. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income within stockholders’ equity. |
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Stock-Based Compensation | The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The amount of expense attributed to awards is based on the estimated forfeiture rate, which is updated based on the Company’s actual forfeiture rates. This option pricing model requires the input of subjective assumptions, including the expected volatility of the Company’s common stock, pre-vesting forfeiture rate and an option’s expected life. The financial statements include amounts that are based on the Company’s best estimates and judgments. Prior to fiscal year 2011, the Company used the “simplified” method to estimate the expected term for share option grants as the Company did not have enough historical experience to provide a reasonable estimate. Currently, the Company estimates the expected term of options using historical exercise and forfeiture data. The Company believes that this historical data is the best estimate of the expected life of a new option, and that generally all groups of the Company’s employees exhibit similar exercise behavior. The Company uses market implied volatility of options to estimate expected volatility. The Company believes implied volatility is a better indicator of expected volatility because it considers option trader’s forecast of future stock price volatility. The Company grants RSU’s with three types of vesting schedules: (i) service-based, (ii) performance-based or (iii) market-based. The fair value for service-based and performance-based RSU’s is determined using the fair value of the Company’s common stock on the date of grant. The fair value of market-based RSU’s is estimated using the Monte Carlo Simulation method which takes into account the probability that the market conditions of these awards will be achieved. Compensation expense for awards with service-based conditions is amortized over the requisite service period of the award on a straight-line basis. Compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met. If the performance condition is not considered probable of being achieved, no expense is recognized until such time as the performance condition is considered probable of being met, if ever. Compensation expense for RSU awards with market-based condition is recognized over the service period using the straight-line method. Compensation expense related to awards with a market-based condition is recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. |
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Business Combinations | The Company currently uses the acquisition method to account for business combinations. The acquisition method requires the Company to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree, and recognize and measure goodwill or a gain from a bargain purchase. The Company must also determine whether a transaction is a business combination by evaluating if the assets acquired and liabilities assumed constitute a business. A business consists of inputs and processes applied to those inputs that have the ability to create outputs. If the assets acquired are not a business, the Company shall account for the transaction or other event as an asset acquisition. |
Segment Information
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Jun. 26, 2011
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Segment Information [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 9. Segment Information The Company reports in six segments which correspond to the way the Company manages its business and interacts with customers. These reportable segments, which correspond to operating segments include: Power Management Devices (“PMD”) - The PMD segment targets power supply, data processing, and industrial and commercial battery-powered system applications with the Company’s Trench HEXFET®MOSFETs, Discrete HEXFET®MOSFETs, Dual HEXFET®MOSFETs, FETKY®s, and DirectFET®s products. Energy Saving Products (“ESP”) -The ESP segment targets solutions in motor control appliances, industrial automation, lighting and display, audio and video with the Company’s HVICs and IGBT platforms, digital control ICs and IRAM integrated power modules. These products provide multiple technologies to deliver completely integrated design platforms specific to these customers. Automotive Products (“AP”) - The AP segment products are focused solely on automotive customers and applications that require a high level of reliability, quality and performance and consist of the Company’s automotive qualified HVICs, intelligent power switch ICs, power MOSFETs including DirectFET® and IGBTs . The Company’s automotive product portfolio provides high performance and energy saving solutions for a broad variety of automotive systems, ranging from typical 12V power net applications up to 1200V hybrid electric vehicle power management solutions. Enterprise Power (“EP”) – The EP segment’s primary applications include servers, storage, routers, switches, infrastructure equipment, notebooks, graphic cards, and gaming counsels. The Company offers a broad portfolio of power management system products that deliver benchmark power density, efficiency and performance. These products include DirectFET® discrete products, digital controllers, power monitoring products, XPhase®, SupIRBuckTM and iPOWIR® voltage regulators, Low voltage ICs, and PowIRstagesTM. HiRel - The HiRel segment includes the Company’s RAD-Hard discretes, RAD-Hard ICs, power management modules and DC-DC converters as well as other high-reliability power components that address power management requirements in mission critical applications including satellites and space exploration vehicles, military hardware and other high- reliability applications such as commercial aircraft, undersea telecommunications, and oil drilling in heavy industry and products used in biomedical applications. HiRel’s strategy is to apply multiple technologies to deliver highly efficient power delivery in applications that operate in naturally harsh environments like space and undersea as well as applications that require a high level of reliability to address issues of safety, cost of failure or difficulty in replacement, like medical applications. Intellectual Property (“IP”) - The IP segment includes revenues from the sale of the Company’s technologies and manufacturing process know-how, in addition to the operating results of the Company’s patent licensing and settlements of claims brought against third parties. With the expiration of the Company’s broadest MOSFET patents, most of its IP segment revenues ceased during the fourth quarter of fiscal year 2008; however, the Company continues, from time to time, to enter into opportunistic licensing arrangements that it believes are consistent with its business strategy. Transition Services (“TS”) - The TS segment consists of the operating results of the transition services, including wafer fabrication, assembly, product supply, test and other manufacturing-related support services being supplied to Vishay as part of the Divestiture. After ongoing ramp-down in many of such services, Vishay terminated most wafer processing services under the TPSA effective April 30, 2009. The revenues from such terminating services represents all but an immaterial amount of the remaining revenues reported under the TS segment. The immaterial amounts of remaining sales to Vishay have been included in the Company’s PMD segment results as of the beginning of fiscal year 2010. The Company does not allocate assets, sales and marketing, information systems, finance and administrative costs and asset impairment, restructuring and other charges (recoveries) to the operating segments, as these are not meaningful statistics to the CEO in making resource allocation decisions or in evaluating performance of the operating segments. Because operating segments are generally defined by the products they design and sell, they do not make sales to each other. The Company does not directly allocate assets to its operating segments, nor does the CEO evaluate operating segments using discrete asset information. However, depreciation and amortization related to the manufacturing of goods is included in gross profit for the segments as part of manufacturing overhead. Due to the Company’s methodology for cost build up at the product level, it is impractical to determine the amount of depreciation and amortization included in each segment’s gross profit. The Company’s “ongoing customer segments” include PMD, ESP, AP, EP and HiRel reporting segments and its “ongoing segments” include the ongoing customer segments as well as the IP reporting segment. For the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009, revenues and gross margin by reportable segments were as follows (in thousands, except percentages):
Revenues from unaffiliated customers are based on the location in which the sale originated. The Company includes in long-lived assets, all long-term assets excluding long-term investments, restricted cash, long-term deferred income taxes, goodwill and acquisition-related intangibles. Geographic information for the fiscal years ended June 26, 2011, June 27, 2010 and June 28, 2009 is presented below (in thousands):
During the fiscal year ended June 26, 2011, sales to two of the Company’s distribution customers were approximately 12.7 and 11.8 percent, respectively, of consolidated revenues. During the fiscal year ended June 27, 2010, sales to two of the Company’s distribution customers were approximately 13.2 and 11.2 percent, respectively, of consolidated revenues. No single customer accounted for more than ten percent of the Company’s consolidated revenues for the fiscal year ended June 28, 2009. |
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Jun. 26, 2011
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Mar. 27, 2011
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Dec. 26, 2010
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Sep. 26, 2010
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Jun. 27, 2010
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Mar. 28, 2010
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Dec. 27, 2009
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Sep. 27, 2009
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Jun. 26, 2011
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Jun. 27, 2010
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Jun. 28, 2009
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Segment Information [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Number of reportable segments | Â | Â | Â | Â | Â | Â | Â | Â | 6 | Â | Â |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | $ 317,249 | $ 296,717 | $ 281,744 | $ 280,867 | $ 263,796 | $ 241,886 | $ 210,244 | $ 179,371 | $ 1,176,577 | $ 895,297 | $ 740,419 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 100.00% | 100.00% | 100.00% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 39.50% | Â | 30.40% |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues from unaffiliated customers, excluding royalties | Â | Â | Â | Â | Â | Â | Â | Â | 1,169,156 | 885,850 | 712,745 |
Royalties (unallocated) | Â | Â | Â | Â | Â | Â | Â | Â | 7,421 | 9,447 | 27,674 |
Long-lived assets | 507,178 | Â | Â | Â | 394,363 | Â | Â | Â | 507,178 | 394,363 | 423,624 |
Concentration Risk [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Maximum percentage of consolidated revenue accounted for by a single customer (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 10.00% |
Ongoing Customer Segments [Member]
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 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 1,169,156 | 885,850 | 674,627 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 99.40% | 98.90% | 91.10% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 39.10% | 32.00% | 29.90% |
Power Management Devices [Member]
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 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 456,764 | 345,610 | 233,737 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 38.80% | 38.60% | 31.60% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 31.60% | 16.50% | 10.90% |
Energy-Saving Products [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 275,044 | 185,404 | 151,090 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 23.40% | 20.70% | 20.40% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 44.70% | 40.30% | 36.70% |
Automotive Products [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 112,174 | 72,932 | 54,061 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 9.50% | 8.10% | 7.30% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 29.90% | 24.20% | 21.50% |
Enterprise Power [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 134,627 | 128,691 | 87,473 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 11.50% | 14.40% | 11.80% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 44.10% | 42.30% | 37.10% |
HiRel [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 190,547 | 153,213 | 148,266 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 16.20% | 17.10% | 20.00% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 51.20% | 51.70% | 51.70% |
Ongoing segments [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 1,176,577 | 895,297 | 702,300 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 100.00% | 100.00% | 94.90% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 39.50% | 32.70% | 32.60% |
Intellectual Property [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | 7,421 | 9,447 | 27,673 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 0.60% | 1.10% | 3.70% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | 100.00% | 100.00% | 100.00% |
TS [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Schedule of Segment Reporting Information [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 38,119 |
Percentage of total (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 5.10% |
Gross margin (in hundredths) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | (11.30%) |
The United States [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues from unaffiliated customers, excluding royalties | Â | Â | Â | Â | Â | Â | Â | Â | 254,593 | 204,474 | 218,781 |
Long-lived assets | 306,741 | Â | Â | Â | 235,021 | Â | Â | Â | 306,741 | 235,021 | 247,546 |
Asia [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues from unaffiliated customers, excluding royalties | Â | Â | Â | Â | Â | Â | Â | Â | 674,654 | 516,993 | 364,795 |
Long-lived assets | 44,695 | Â | Â | Â | 28,139 | Â | Â | Â | 44,695 | 28,139 | 30,388 |
Europe [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Revenues from External Customers and Long-Lived Assets [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues from unaffiliated customers, excluding royalties | Â | Â | Â | Â | Â | Â | Â | Â | 239,909 | 164,383 | 129,169 |
Long-lived assets | $ 155,742 | Â | Â | Â | $ 131,203 | Â | Â | Â | $ 155,742 | $ 131,203 | $ 145,690 |
Consolidated Revenues [Member] | Distribution Customer 1 Concentration Risk [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Concentration Risk [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Concentration risk (in hundredths) | 12.70% | Â | Â | Â | 13.20% | Â | Â | Â | 12.70% | 13.20% | Â |
Distribution Customer 2 Concentration Risk [Member]
|
 |  |  |  |  |  |  |  |  |  |  |
Concentration Risk [Line Items] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Concentration risk (in hundredths) | 11.80% | Â | Â | Â | 11.20% | Â | Â | Â | 11.80% | 11.20% | Â |
Net Income per Common Share (Details) (USD $)
In Thousands, except Share data |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Dec. 27, 2009
|
Sep. 27, 2009
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
|
Net Income per Common Share [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net income (loss) | $ 39,634 | $ 49,485 | $ 43,929 | $ 33,498 | $ 29,022 | $ 40,387 | $ 28,318 | $ (16,900) | $ 166,546 | $ 80,827 | $ (247,417) |
Less: Income allocated to participating securities | Â | Â | Â | Â | Â | Â | Â | Â | 2,562 | 465 | 0 |
Income available to common stockholders | Â | Â | Â | Â | Â | Â | Â | Â | $ 163,984 | $ 80,362 | $ (247,417) |
Earnings per common share - basic [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Basic weighted average shares outstanding (in shares) | 69,827,000 | 69,854,000 | 69,587,000 | 70,165,000 | 70,553,000 | 70,850,000 | 71,605,000 | 71,218,000 | 69,858,000 | 70,958,000 | 72,295,000 |
Basic income (loss) per share (in dollars per share) | $ 0.56 | $ 0.70 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.57 | $ 0.40 | $ (0.24) | $ 2.35 | $ 1.13 | $ (3.42) |
Earnings per common share - diluted [Abstract] | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Basic weighted average shares outstanding (in shares) | 69,827,000 | 69,854,000 | 69,587,000 | 70,165,000 | 70,553,000 | 70,850,000 | 71,605,000 | 71,218,000 | 69,858,000 | 70,958,000 | 72,295,000 |
Effect of dilutive securities - stock options and RSU's (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | 665,000 | 290,000 | 0 |
Diluted weighted-average shares (in shares) | 70,522,000 | 70,601,000 | 70,235,000 | 70,483,000 | 71,014,000 | 71,176,000 | 71,827,000 | 71,218,000 | 70,523,000 | 71,248,000 | 72,295,000 |
Diluted income (loss) per share (in dollars per share) | $ 0.55 | $ 0.69 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.56 | $ 0.39 | $ (0.24) | $ 2.33 | $ 1.13 | $ (3.42) |
Antidilutive securities excluded from computation of earnings per share (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | 762,186 | 2,734,860 | 8,144,217 |
Potentially dilutive restricted stock units excluded from computation of earnings per share (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | 366,100 | Â | Â |
Commitments and Contingencies (Tables)
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Commitments and Contingencies [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||
Minimum Fixed Rentals Required Under Operating Leases | As of June 26, 2011, minimum fixed rentals required for the next five years and thereafter under operating leases are as follows (in millions):
|
Commitments and Contingencies
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 26, 2011
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Commitments and Contingencies [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 13. Commitments and Contingencies The Company has operating leases for the use of certain real estate and equipment. Substantially all operating leases are non-cancelable or cancelable only by the payment of penalties. All lease payments are based on the lapse of time but include, in some cases, payments for insurance, maintenance and property taxes. There are no purchase options on operating leases at favorable terms, but most real estate leases have one or more renewal options. Certain leases on real estate are subject to annual escalations for increases in utilities and property taxes. Total rental expense on all operating leases totaled $9.8 million, $10.2 million and $11.5 million for the fiscal years ended June 26, 2011, June 27, 2010, and June 28, 2009, respectively. The Company had outstanding purchase commitments for capital expenditures of approximately $23.5 million at June 26, 2011. The Company had no capital lease obligations as of June 26, 2011. As of June 26, 2011, minimum fixed rentals required for the next five years and thereafter under operating leases are as follows (in millions):
During fiscal year 2011, the Company entered into agreements with two external foundries to secure wafer fabrication capacity. Under these agreements the Company advanced to the foundries approximately $5.8 million on account of future purchases. These advances were recorded in prepaid expenses and other receivables and other assets and will be credited against future purchases from the foundries to the extent the Company purchases certain minimum quantities of wafers each quarter during the next two years. Of the $5.8 million in advances, $4.8 million is subject to provisions that require the forfeiture of the portion of the prepayment applicable to a given fiscal quarter if the Company does not purchase the minimum required amounts for that quarter. The Company will assess the recoverability of the advanced payments on a quarterly basis. In connection with the Divestiture, in fiscal year 2007 the Company recorded a provision of $18.6 million for certain tax obligations with respect to divested entities. In fiscal year 2008, the divested entities’ tax obligations increased to $20.7 million due to the impact of foreign currency translation on the underlying obligation partially offset by a decrease in the obligation resulting from the lapsing of a statute of limitation in a foreign tax jurisdiction. In fiscal year 2009, the divested entities tax obligations decreased to $7.3 million due to settlement of tax audits, lapsing of statute of limitations, and the decrease from foreign currency redetermination on the underlying obligation partially offset by an increase in adjustments arising from the filing of amended tax returns. In fiscal year 2010, the divested entities tax obligations decreased to $5.5 million due to lapsing of statute of limitations and the decrease from foreign currency redetermination of the underlying obligation. In fiscal 2011, a net release of $1.5 million was recorded and was primarily due to the lapse of applicable statutes of limitations. The balance of the divested entities tax obligations is $4.0 million. On February 3, 2011, the Company completed the Technology Acquisition. The transaction agreement related to the Technology Acquisition includes contingent consideration payable upon the achievement of certain financial operating results. The Company has accrued a liability of $0.4 million for the contingent consideration based upon a discounted cash flow analysis (See Note 2, “Business Acquisitions”). |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 26, 2011
|
Mar. 27, 2011
|
Dec. 26, 2010
|
Sep. 26, 2010
|
Jun. 27, 2010
|
Mar. 28, 2010
|
Dec. 27, 2009
|
Sep. 27, 2009
|
Jun. 26, 2011
|
Jun. 27, 2010
|
Jun. 28, 2009
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revenues | $ 317,249 | $ 296,717 | $ 281,744 | $ 280,867 | $ 263,796 | $ 241,886 | $ 210,244 | $ 179,371 | $ 1,176,577 | $ 895,297 | $ 740,419 |
Cost of sales | 199,375 | 179,534 | 160,733 | 172,043 | 168,684 | 154,576 | 147,426 | 132,014 | 711,685 | 602,700 | 515,563 |
Gross profit | 117,874 | 117,183 | 121,011 | 108,824 | 95,112 | 87,310 | 62,818 | 47,357 | 464,892 | 292,597 | 224,856 |
Selling, general and administrative expense | 52,141 | 46,680 | 46,617 | 48,310 | 45,188 | 43,135 | 37,285 | 43,582 | 193,748 | 169,190 | 262,068 |
Research and development expense | 32,502 | 30,733 | 28,544 | 27,560 | 26,619 | 25,649 | 24,215 | 22,827 | 119,339 | 99,310 | 98,211 |
Impairment of goodwill | Â | Â | Â | Â | Â | Â | Â | Â | 0 | 0 | 23,867 |
Amortization of acquisition-related intangible assets | 2,612 | 1,695 | 1,242 | 1,219 | 1,094 | 1,093 | 1,094 | 1,094 | 6,768 | 4,375 | 4,408 |
Asset impairment, restructuring and other charges (recoveries) | Â | (3,489) | (4) | 134 | 35 | 117 | (30) | 167 | (3,359) | 289 | 56,493 |
Gain on divestiture | Â | Â | Â | Â | Â | Â | Â | Â | 0 | 0 | (96,136) |
Operating income (loss) | 30,619 | 41,564 | 44,612 | 31,601 | 22,176 | 17,316 | 254 | (20,313) | 148,396 | 19,433 | (124,055) |
Other expense, net | (954) | (1,348) | 1,708 | 1,312 | (86) | 318 | 1,009 | 778 | 718 | 2,019 | 39,717 |
Interest income, net | (1,859) | (2,694) | (4,152) | (1,409) | (2,190) | (2,573) | (2,488) | (3,970) | (10,114) | (11,221) | (11,694) |
Income (loss) before income taxes | 33,432 | 45,606 | 47,056 | 31,698 | 24,452 | 19,571 | 1,733 | (17,121) | 157,792 | 28,635 | (152,078) |
(Benefit from) provision for income taxes | (6,202) | (3,879) | 3,127 | (1,800) | (4,570) | (20,816) | (26,585) | (221) | (8,754) | (52,192) | 95,339 |
Net income (loss) | $ 39,634 | $ 49,485 | $ 43,929 | $ 33,498 | $ 29,022 | $ 40,387 | $ 28,318 | $ (16,900) | $ 166,546 | $ 80,827 | $ (247,417) |
Basic: | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net income (loss) per common share (in dollars per share) | $ 0.56 | $ 0.70 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.57 | $ 0.40 | $ (0.24) | $ 2.35 | $ 1.13 | $ (3.42) |
Diluted: | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Net income (loss) per common share (in dollars per share) | $ 0.55 | $ 0.69 | $ 0.62 | $ 0.47 | $ 0.41 | $ 0.56 | $ 0.39 | $ (0.24) | $ 2.33 | $ 1.13 | $ (3.42) |
Average common shares outstanding - basic (in shares) | 69,827 | 69,854 | 69,587 | 70,165 | 70,553 | 70,850 | 71,605 | 71,218 | 69,858 | 70,958 | 72,295 |
Average common shares and potentially dilutive securities outstanding - diluted (in shares) | 70,522 | 70,601 | 70,235 | 70,483 | 71,014 | 71,176 | 71,827 | 71,218 | 70,523 | 71,248 | 72,295 |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Tables)
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Jun. 27, 2010
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts and Reserves |
|