-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WAzUa3tcdde/tvoQ26CcEMQMlUdDKb6lhXA2gVmuQ1cKTLVE/5bVhr4L/QT8Qyqs Ao4XXqcEF8H5dmwPOlFFVA== 0000912057-95-009964.txt : 19951119 0000912057-95-009964.hdr.sgml : 19951119 ACCESSION NUMBER: 0000912057-95-009964 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL RECTIFIER CORP /DE/ CENTRAL INDEX KEY: 0000316793 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 951528961 STATE OF INCORPORATION: DE FISCAL YEAR END: 0629 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07935 FILM NUMBER: 95592358 BUSINESS ADDRESS: STREET 1: 233 KANSAS ST CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3103223331 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 ------------------------------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO -------------------- ---------------------- COMMISSION FILE NO. 1-7935 ----------------------------------------------------------- INTERNATIONAL RECTIFIER CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 95-1528961 - ---------------------------------- ----------------------------- (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION INCORPORATION OR ORGANIZATION) NUMBER) 233 KANSAS STREET EL SEGUNDO, CALIFORNIA 90245 - ---------------------------------- ----------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 322-3331 NO CHANGE - ------------------------------------------------------------------------------- (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO ----- ------ THERE WERE 25,235,645 SHARES OF $1 PAR VALUE COMMON STOCK OUTSTANDING AT NOVEMBER 13, 1995. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE REFERENCE ITEM 1. FINANCIAL STATEMENTS Unaudited Consolidated Statement of Income for the Three Month Periods Ended September 30, 1995 and 1994 2 Consolidated Balance Sheet as of September 30, 1995 (unaudited) and June 30, 1995 3 Unaudited Consolidated Statement of Cash Flows for the Three Month Periods Ended September 30, 1995 and 1994 4 Notes to Unaudited Consolidated Financial Statements 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 7 PART II. OTHER INFORMATION None PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SEPTEMBER 30, ------------------------- 1995 1994 -------- --------- Revenues $126,097 $ 92,253 Cost of sales 78,786 60,739 -------- -------- Gross profit 47,311 31,514 Selling and administrative expense 23,159 18,486 Research and development expense 5,687 4,111 -------- -------- Operating profit 18,465 8,917 Other income (expense): Interest, net 450 (912) Other, net (402) (179) -------- -------- Income before income taxes 18,513 7,826 Provision for income taxes 5,684 1,328 -------- -------- Net income $ 12,829 $ 6,498 -------- -------- -------- -------- Net income per share $ 0.50 $ 0.32 -------- -------- -------- -------- Average common and common equivalent shares outstanding 25,606 20,596 -------- -------- -------- --------
The accompanying notes are an integral part of this statement. 2 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands)
SEPTEMBER 30, 1995 JUNE 30, (UNAUDITED) 1995 ------------- ----------- ASSETS Current assets: Cash and cash equivalents $ 35,600 $ 50,820 Short-term investments 17,941 3,000 Trade accounts receivable, net 94,283 94,095 Inventories 74,038 73,155 Deferred income taxes 10,630 10,630 Prepaid expenses 4,355 2,112 -------- -------- Total current assets 236,847 233,812 Property, plant and equipment, net 262,255 245,218 Investments and long-term notes receivable 2,362 2,362 Other assets 15,596 14,792 -------- -------- Total assets $517,060 $496,184 -------- -------- -------- -------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loans $ 11,492 $ 17,250 Long-term debt, due within one year 10,052 7,985 Accounts payable 47,759 53,771 Accrued salaries, wages and commissions 9,590 11,517 Other accrued expenses 16,044 15,538 -------- -------- Total current liabilities 94,937 106,061 Long-term debt, less current maturities 39,200 23,881 Deferred income 532 675 Other long-term liabilities 11,102 10,311 Deferred income taxes 12,363 10,075 Stockholders' equity: Common stock 25,229 25,180 Capital contributed in excess of par value 266,229 265,326 Retained earnings 71,727 58,898 Cumulative translation adjustments (4,259) (4,223) -------- -------- Total stockholders' equity 358,926 345,181 -------- -------- Total liabilities and stockholders' equity $517,060 $496,184 -------- -------- -------- --------
The accompanying notes are an integral part of this statement. 3 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands)
THREE MONTHS ENDED SEPTEMBER 30, ------------------------ 1995 1994 ---------- ----------- Cash flow from operating activities: Net income $ 12,829 $ 6,498 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,527 5,365 Deferred income (143) (95) Deferred income taxes 2,281 - Deferred compensation 686 165 Change in working capital (12,942) (8,749) --------- --------- Net cash provided by operating activities 9,238 3,184 --------- --------- Cash flow from investing activities: Additions to property, plant and equipment (23,745) (13,267) Purchase of short-term investments (20,441) - Proceeds from sale of short-term investments 5,500 - Investment in other noncurrent assets (1,117) (709) --------- --------- Net cash used in investing activities (39,803) (13,976) --------- --------- Cash flow from financing activities: Proceeds from issuance of (payments on) short-term bank debt, net (4,963) 7,403 Proceeds from issuance of long-term debt 19,554 3,098 Payments on long-term debt and obligations under capital leases (1,639) (1,208) Net proceeds from issuance of common stock 952 470 Other 1,916 (459) --------- --------- Net cash provided by financing activities 15,820 9,304 --------- --------- Effect of exchange rate changes on cash and cash equivalents (475) 47 --------- --------- Net decrease in cash and cash equivalents (15,220) (1,441) Cash and cash equivalents beginning of period 50,820 13,051 --------- --------- Cash and cash equivalents end of period $ 35,600 $ 11,610 --------- --------- --------- ---------
The accompanying notes are an integral part of this statement. 4 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 1. BASIS OF PRESENTATION The consolidated financial statements included herein are unaudited, however, they contain all normal recurring accruals which, in the opinion of management, are necessary to present fairly the consolidated financial position of the Company at September 30, 1995 and the consolidated results of operations and cash flows for the three month periods ended September 30, 1995 and 1994. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the three month period ended September 30, 1995 are not necessarily indicative of the results to be expected for the full year. The accompanying consolidated financial statements do not include footnotes and certain financial presentations normally required under generally accepted accounting principles and, therefore, should be read in conjunction with the Annual Report on Form 10-K for the year ended June 30, 1995. 2. EARNINGS PER SHARE Earnings per share is computed by dividing earnings by the weighted average number of common and common stock equivalents outstanding. Stock options outstanding under stock option plans are considered common stock equivalents. Common stock equivalents for stock options of 389,300 and 212,200 were utilized in the computation of earnings per share for the three month periods ended September 30, 1995 and 1994, respectively. 3. INVENTORIES Inventories are stated at the lower of cost (principally first-in, first- out) or market. Inventories at September 30, 1995 (unaudited) and June 30, 1995 were comprised of the following (in thousands):
SEPTEMBER 30, 1995 JUNE 30, 1995 ------------------ ------------- Raw materials $22,625 $19,974 Work-in-process 33,003 32,967 Finished goods 18,410 20,214 ------- ------- $74,038 $73,155 ------- ------- ------- -------
4. LONG-TERM DEBT AND OTHER LOANS 5 A summary of the Company's long-term debt and other loans at September 30, 1995 is as follows (in thousands):
SEPTEMBER 30, 1995 --------------- Capitalized lease obligations payable in varying monthly installments primarily at rates from 6.0% to 12.6% $ 12,450 Domestic bank loans collateralized by equipment, payable in varying monthly installments at rates from 7.0% to 8.6%, due in 1995 through 2000 14,684 Domestic unsecured bank loan payable in varying monthly installments at a current variable rate of 6.9%, due in 1998 through 2001 8,000 Foreign bank loans collateralized by property and/or equipment, payable in varying monthly installments at rates from 8.0% to 10.8%, due in 1997 through 2000 5,938 Foreign unsecured bank loans payable in varying monthly installments at rates from 3.0% to 8.4%, due in 1998 through 2006 8,180 -------- 49,252 Less current portion of long-term debt (10,052) -------- $ 39,200 -------- --------
5. LITIGATION SGS-Thomson Microelectronics, Inc. and SGS-Thomson Microelectronics S.A. filed suit in Great Britain in September 1995 against International Rectifier (Great Britain) Limited and International Rectifier Corporation alleging infringement of their United Kingdom (U.K.) patents 1595546 and 0068945. The U.K. patents are foreign counterparts of U.S. patents 4,495,513 and 4,712,127 on which suit is pending against the Company in Federal District Court in Los Angeles. The U.K. action is being reviewed by counsel for the Company. 6. INTELLECTUAL PROPERTY RIGHTS In connection with the reexamination in the United States Patent and Trademark Office ("PTO") of certain of the Company's power MOSFET patents, the Company received a notice from the PTO, dated October 23, 1995, of its intent to issue a certificate confirming the patentability of the Company's U.S. patent 5,191,396. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1995 COMPARED WITH THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1994 The following table sets forth certain items as a percentage of revenues.
THREE MONTHS ENDED SEPTEMBER 30, (UNAUDITED) -------------------- 1995 1994 ---- ---- Revenues 100.0% 100.0% Cost of sales 62.5 65.8 ----- ----- Gross profit 37.5 34.2 Selling and administrative expense 18.4 20.1 Research and development expense 4.5 4.5 ----- ----- Operating profit 14.6 9.6 Interest income (expense), net 0.4 (1.0) Other expense, net (0.3) (0.2) ----- ----- Income before income taxes 14.7 8.4 Provision for income taxes 4.5 1.4 ----- ----- Net income 10.2% 7.0% ----- ----- ----- -----
Revenues for the three months ended September 30, 1995 increased 36.7% to $126.1 million from $92.3 million in the prior year period. The Company's revenue increase reflected rising demand for the Company's power MOSFETs and related devices; revenues from these products increased 41% from the year ago quarter. Revenues from the thyristor and rectifier product lines increased 16%. Changes in foreign exchange rates positively impacted revenues by approximately $2.4 million in the three months ended September 30, 1995. Revenues in the current quarter included $3.3 million of net patent royalties, versus $2.2 million in the prior year period. September-quarter gross profit rose to $47.3 million and 37.5% of revenues, versus $31.5 million and 34.2% in the comparable year-ago quarter. Gross profit margins reflected a richer mix of new and higher-margin products, greater manufacturing volume and efficiencies, and a favorable pricing environment. September-quarter selling and administrative expense of $23.2 million represented 18.4% of revenues, versus $18.5 million and 20.1% in the comparable year-ago quarter. The decreased percentage reflected improvements in systems, procedures, and operating discipline. In the quarter ended September, the Company's research and development expenditures 7 increased to $5.7 million (4.5% of revenues) compared to $4.1 million (4.5% of revenues) in the comparable prior year period. The Company's research and development program continues to be focused on the advancement and diversification of the HEXFET product line, the expansion of the related IGBT products, and the development of High Voltage Power ICs and high-performance diodes that work in combination with HEXFETs and IGBTs to improve system performance. Net interest income of $0.5 million compared to net interest expense of $0.9 million in the prior year period, reflected interest income earned on higher average short-term investment balances and the capitalization of certain interest costs. Changes in foreign currency exchange rates negatively impacted net income by $0.2 million in the three month period ending September 30, 1995. SEASONALITY The Company has experienced moderate seasonality in its business in recent years. On average over the past three years, the Company has reported approximately 47% of annual revenues in the first half and 53% in the second half of its fiscal year. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1995, the Company maintained cash and cash equivalent balances of $35.6 million and short term investments of $17.9 million. In addition, the Company had established $73.5 million of domestic and foreign revolving lines of credit, against which $11.5 million had been borrowed. Based on covenant and collateral limitations, the Company had $55.0 million available for borrowing at September 30, 1995. Additionally, the Company had at its disposal $17.0 million of unused bank term-loan facilities and $17.7 million of unused capital equipment credit lines. At September 30, 1995, the Company had made purchase commitments for capital equipment of approximately $16.5 million. 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERNATIONAL RECTIFIER CORPORATION ----------------------------------- REGISTRANT November 13, 1995 MICHAEL P. MCGEE ------------------------------------------- Michael P. McGee Vice President, Chief Financial Officer and Principal Accounting Officer 9 PART II. OTHER INFORMATION NONE 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS JUN-30-1996 JUL-01-1995 SEP-30-1995 35,600 17,941 95,122 839 74,038 236,847 396,865 134,610 517,060 94,937 0 25,229 0 0 333,697 517,060 126,097 126,097 78,786 78,786 28,846 88 450 18,513 5,684 12,829 0 0 0 12,829 0.50 0.50
-----END PRIVACY-ENHANCED MESSAGE-----