-----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, OyrwCqEIrpDxcBfUIlD4X1N67+XY79BZKeENzJC3P5tPLP8cDuM2EV1ZnLIth83k mTmpfZ9NtpBXWnWdhWsjog== 0000912057-96-002338.txt : 19960216 0000912057-96-002338.hdr.sgml : 19960216 ACCESSION NUMBER: 0000912057-96-002338 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 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: 96517261 BUSINESS ADDRESS: STREET 1: 233 KANSAS ST CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3103223331 10-Q 1 FORM 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 DECEMBER 31, 1995 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________________ TO _____________________ COMMISSION FILE NO. 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 50,612,827 SHARES OF $1 PAR VALUE COMMON STOCK OUTSTANDING AT FEBRUARY 12, 1996. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE REFERENCE ITEM 1. FINANCIAL STATEMENTS Unaudited Consolidated Statement of Income for the Three and Six Month Periods Ended December 31, 1995 and 1994 2 Consolidated Balance Sheet as of December 31, 1995 (unaudited) and June 30, 1995 3 Unaudited Consolidated Statement of Cash Flows for the Six Month Periods Ended December 31, 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 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11 ITEM 5. OTHER INFORMATION 11 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 SIX MONTHS ENDED DECEMBER 31, DECEMBER 31, 1995 1994 1995 1994 ------------------------- ------------------------- Revenues $ 141,026 $ 102,814 $ 267,123 $ 195,067 Cost of sales 87,137 67,022 165,923 127,761 ---------- ---------- ---------- ---------- Gross profit 53,889 35,792 101,200 67,306 Selling and administrative expense 25,187 19,947 48,346 38,433 Research and development expense 6,325 4,944 12,012 9,055 ---------- ---------- ---------- ---------- Operating profit 22,377 10,901 40,842 19,818 Other income (expense): Interest, net (169) (522) 281 (1,434) Other, net (248) (310) (650) (489) ---------- ---------- ---------- ---------- Income before income taxes 21,960 10,069 40,473 17,895 Provision for income taxes 6,741 1,701 12,425 3,029 ---------- ---------- ---------- ---------- Net income $ 15,219 $ 8,368 $ 28,048 $ 14,866 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Net income per share (A) $ 0.30 $ 0.18 $ 0.55 $ 0.34 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Average common and common equivalent shares outstanding (A) 51,403 45,474 51,308 43,334 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(A) Reflects the two-for-one stock split declared on November 20, 1995. The accompanying notes are an integral part of this statement. 2 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (In thousands)
December 31, 1995 June 30, (Unaudited) 1995 ----------- --------- ASSETS Current assets: Cash and cash equivalents $ 36,933 $ 50,820 Short-term investments 18,076 3,000 Trade accounts receivable, net 104,498 94,095 Inventories 76,947 73,155 Deferred income taxes 6,065 10,630 Prepaid expenses 4,076 2,112 --------- --------- Total current assets 246,595 233,812 Property, plant and equipment, net 271,589 245,218 Investments and long-term notes receivable 2,362 2,362 Other assets 19,224 14,792 --------- --------- Total assets $ 539,770 $ 496,184 --------- --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loans $ 13,932 $ 17,250 Long-term debt, due within one year 9,501 7,985 Accounts payable 44,184 53,771 Accrued salaries, wages and commissions 9,985 11,517 Other accrued expenses 14,367 15,538 --------- --------- Total current liabilities 91,969 106,061 Long-term debt, less current maturities 50,571 23,881 Deferred income 389 675 Other long-term liabilities 12,059 10,311 Deferred income taxes 10,544 10,075 Stockholders' equity: Common stock(A) 50,477 50,360 Capital contributed in excess of par value (A) 241,115 240,146 Retained earnings 86,946 58,898 Cumulative translation adjustments (4,300) (4,223) --------- --------- Total stockholders' equity 374,238 345,181 --------- --------- Total liabilities and stockholders' equity $ 539,770 $ 496,184 --------- --------- --------- ---------
(A) Reflects the two-for-one stock split declared on November 20, 1995. The accompanying notes are an integral part of this statement. 3 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands)
SIX MONTHS ENDED DECEMBER 31, ------------------------ 1995 1994 ---------- --------- Cash flow from operating activities: Net income $ 28,048 $ 14,866 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,965 11,105 Deferred income (286) (238) Deferred income taxes 5,030 - Deferred compensation 1,548 649 Change in working capital (31,100) (13,914) --------- -------- Net cash provided by operating activities 17,205 12,468 --------- -------- Cash flow from investing activities: Additions to property, plant and equipment (40,313) (37,015) Purchase of short-term investments (34,071) (42,581) Proceeds from sale of short-term investments 18,995 - Investment in other noncurrent assets (2,237) (1,220) --------- --------- Net cash used in investing activities (57,626) (80,816) --------- --------- Cash flow from financing activities: Proceeds from issuance of (payments on) short-term bank debt, net (2,476) (8,436) Proceeds from issuance of long-term debt 32,495 3,410 Payments on long-term debt and obligations under capital leases (3,505) (3,172) Net proceeds from issuance of common stock 1,086 98,023 Other (473) (222) --------- --------- Net cash provided by financing activities 27,127 89,603 --------- --------- Effect of exchange rate changes on cash and cash equivalents (593) (34) --------- --------- Net decrease in cash and cash equivalents (13,887) 21,221 Cash and cash equivalents beginning of period 50,820 13,051 --------- --------- Cash and cash equivalents end of period $ 36,933 $ 34,272 --------- --------- --------- ---------
The accompanying notes are an integral part of this statement. 4 INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 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 December 31, 1995 and the consolidated results of operations and cash flows for the six month periods ended December 31, 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 six month period ended December 31, 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 931,400 and 512,000 were utilized in the computation of earnings per share for the three month periods ended December 31, 1995 and 1994, respectively. All share and per share amounts have been retroactively restated to reflect a Common Stock split. 3. INVENTORIES Inventories are stated at the lower of cost (principally first-in, first- out) or market. Inventories at December 31, 1995 (unaudited) and June 30, 1995 were comprised of the following (in thousands):
DECEMBER 31, 1995 JUNE 30, 1995 ----------------- ------------- Raw materials $ 23,183 $ 19,974 Work-in-process 36,447 32,967 Finished goods 17,317 20,214 ---------- ---------- $ 76,947 $ 73,155 ---------- ---------- ---------- ----------
5 4. LONG-TERM DEBT AND OTHER LOANS A summary of the Company's long-term debt and other loans at December 31, 1995 is as follows (in thousands):
DECEMBER 31, 1995 ------------ Capitalized lease obligations payable in varying monthly installments primarily at rates from 6.0% to 12.6% $11,434 Domestic bank loans collateralized by equipment, payable in varying monthly installments at rates from 6.7% to 8.7%, due in 1995 through 2000 19,657 Domestic unsecured bank loan payable in varying monthly installments at a current variable rate of 6.6% to 6.9%, due in 1998 through 2001 15,700 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 5,401 Foreign unsecured bank loans payable in varying monthly installments at rates from 3.0% to 8.4%, due in 1998 through 2006 7,880 -------- 60,072 Less current portion of long-term debt (9,501) -------- $ 50,571 -------- --------
5. 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 from the PTO a reexamination certificate, issued on December 26, 1995, for 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 DECEMBER 31, 1995 COMPARED WITH THE THREE MONTH PERIOD ENDED DECEMBER 31, 1994 The following table sets forth certain items as a percentage of revenues.
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 31, DECEMBER 31 (UNAUDITED) (UNAUDITED) --------------------- -------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Revenues 100.0% 100.0% 100.0% 100.0% Cost of sales 61.8 65.2 62.1 65.5 ----- ----- ----- ----- Gross profit 38.2 34.8 37.9 34.5 Selling and administrative expense 17.9 19.4 18.1 19.7 Research and development expense 4.5 4.8 4.5 4.6 ----- ----- ----- ----- Operating profit 15.8 10.6 15.3 10.2 Interest income (expense), net (0.1) (0.5) 0.1 (0.7) Other expense, net (0.2) (0.3) (0.2) (0.3) ----- ----- ----- ----- Income before income taxes 15.5 9.8 15.2 9.2 Provision for income taxes 4.7 1.7 4.7 1.6 ----- ----- ----- ----- Net income 10.8% 8.1% 10.5% 7.6% ----- ----- ----- ----- ----- ----- ----- -----
Revenues for the three months ended December 31, 1995 increased 37.2% to $141.0 million from $102.8 million in the prior year period. Revenues for the six month period ended December 31, 1995 increased 36.9% to $267.1 million from $195.1 million in the previous year. The Company's revenue increase reflected rising demand for power MOSFETs and related devices; revenues from these products increased 42% from the year ago quarter. Revenues from the mature product lines increased 12%. Changes in foreign exchange rates increased revenues by approximately $0.8 million and $3.2 million in the three and six month periods ended December 31, 1995. Revenues in the current quarter included $3.5 million of net patent royalties, versus $2.3 million in the prior year period. Gross profit for the three and six month periods ended December 31, 1995 was 38.2% and 37.9% of revenues ($53.9 million and $101.2 million), respectively, versus 34.8% and 34.5% of revenues ($35.8 million and $67.3 million) in the comparable prior year periods. Gross profit margins reflected a richer mix of new and higher-margin products, as well as greater manufacturing volume and efficiencies. 7 In the three and six month periods ended December 31, 1995, selling and administrative expense was 17.9% and 18.1% of revenues ($25.2 million and $48.3 million), respectively, versus 19.4% and 19.7% of revenues ($19.9 million and $38.4 million) in the comparable prior year periods. The decreased percentage reflected improvements in systems, procedures, and operating discipline. In the three and six month periods ended December 31, 1995, the Company's research and development expenditures increased to $6.3 million (4.5% of revenues) and $12.0 million (4.5% of revenues), versus $4.9 million (4.8% of revenues) and $9.1 million (4.6% of revenues) in the comparable prior year periods. The Company's research and development program continues to focus 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. Interest (net) in the three and six month periods ended December 31, 1995 decreased $0.4 million and $1.7 million from the comparable prior year periods because of interest income earned on higher average short-term investment balances and the capitalization of certain interest costs. Changes in foreign currency exchange rates positively impacted net income by $0.1 million and negatively impacted net income by $0.1 million in the three and six month periods ending December 31, 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 December 31, 1995, the Company maintained cash and cash equivalent balances of $36.9 million and short term investments of $18.1 million. In addition, the Company had established $70.9 million of domestic and foreign revolving lines of credit, against which $13.9 million had been borrowed. Based on covenant and collateral limitations, the Company had $50.8 million available for borrowing at December 31, 1995. Additionally, the Company had at its disposal $9.3 million of unused bank term-loan facilities and $22.5 million of unused capital equipment credit lines. At December 31, 1995, the Company had made purchase commitments for capital equipment of approximately $37.6 million. The Company intends to spend approximately $40 million to purchase additional equipment to expand wafer fabrication capacity at its HEXFET America facility. This planned expansion is expected to be in production by December 1996. The Company believes that it has adequate liquidity, through cash and cash equivalents on hand, short term investments, anticipated cash flow from operations and funds from existing credit facilities to meet its cash requirements for the foreseeable future. However, the Company may also 8 consider the use of funds from other external sources including, but not limited to, public or private offerings of debt or equity. On November 20, the Board of Directors declared a two-for-one split of the Company's common stock, which increased the number of shares of common stock outstanding from approximately 25.2 million to approximately 50.4 million. The shares were distributed on December 22, 1995 to stockholders of record on December 1, 1995. 9 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 February 12, 1996 MICHAEL P. MCGEE ----------------------------- Michael P. McGee Vice President, Chief Financial Officer and Principal Accounting Officer 10 PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The following matters were submitted to a vote of stockholders at the Company's Annual Meeting of Stockholders held on November 20, 1995, with the following results:
Authority Description of Matter For Withheld --- --------- 1. Election of Directors George Krsek 23,159,723 67,504 Derek B. Lidow 23,051,707 175,520 Jack O. Vance 23,163,198 64,029 For Against Abstentions --- ------- ----------- 2. Amendment of the Certificate of Incorporation to increase the authorized number of shares of the company's common stock from 30,000,000 to 150,000,000 13,711,958 9,442,859 72,410 3. Ratification of Coopers & Lybrand as Independent Auditors 23,144,966 52,449 29,812 Broker Non-Vote on Proposal 2 1,030,204
ITEM 5. OTHER INFORMATION On November 20, the Board of Directors declared a two-for-one split of the Company's common stock, which increased the number of shares of common stock outstanding from approximately 25.2 million to approximately 50.4 million. The shares were distributed on December 22, 1995 to stockholders of record on December 1, 1995. 11 EX-27 2 EXHIBIT 27 (FDS)
5 1,000 6-MOS JUN-30-1996 JUL-01-1995 DEC-31-1995 36,933 18,076 105,363 865 76,947 246,595 415,645 144,056 539,770 91,969 0 0 0 50,477 323,761 539,770 267,123 267,123 165,923 165,923 60,358 26 281 40,473 12,425 28,048 0 0 0 28,048 0.55 0.55 Reflects two-for-one stock split declared on November 20, 1995.
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