EX-99.1 2 a08-17179_1ex99d1.htm EX-99.1

Exhibit 99.1

 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED MARCH 31, 2007

(In thousands, except per share data)

 

 

 

International

 

Pro Forma Adjustments

 

 

 

 

 

Rectifier

 

Commodity

 

 

 

 

 

 

 

Corporation

 

Products (1)

 

Other (2)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

925,609

 

$

(168,500

)

$

5,000

 

$

762,109

 

Cost of sales

 

563,425

 

(119,211

)

838

 

445,052

 

Gross profit

 

362,184

 

(49,289

)

4,162

 

317,057

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expense

 

165,371

 

(14,608

)

—

 

150,763

 

Research and development expense

 

92,146

 

(4,941

)

—

 

87,205

 

Amortization of acquisition-related intangibles assets

 

1,242

 

—

 

—

 

1,242

 

Asset impairment, restructuring and other charges

 

10,322

 

(336

)

—

 

9,986

 

Operating income

 

93,103

 

(29,404

)

4,162

 

67,861

 

 

 

 

 

 

 

 

 

 

 

Other income, net

 

(5,424

)

—

 

—

 

(5,424

)

Interest income, net

 

(8,987

)

—

 

—

 

(8,987

)

Income from continuing operations before income taxes

 

107,514

 

(29,404

)

4,162

 

82,272

 

Provision for income tax

 

47,199

 

(8,033

)

1,137

 

40,303

 

Income from continuing operations

 

$

60,315

 

$

(21,371

)

$

3,025

 

$

41,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations per common share, basic

 

$

0.83

 

 

 

 

 

 

 

$

0.58

 

Income from continuing operations per common share, diluted

 

$

0.83

 

 

 

 

 

 

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding – basic

 

72,291

 

 

 

 

 

72,291

 

Average common shares and potentially dilutive securities outstanding – diluted

 

72,829

 

 

 

 

 

72,829

 

 


 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

FOR THE FISCAL YEAR ENDED JUNE 30, 2006

(In thousands, except per share data)

 

 

 

International

 

 

 

 

 

 

 

 

 

Rectifier

 

 

 

 

 

 

 

 

 

Corporation

 

Pro Forma Adjustments

 

 

 

 

 

(Historical)

 

Commodity

 

Other pro forma

 

 

 

 

 

As Restated

 

Products (1)

 

adjustments (2)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

1,014,800

 

$

(196,592

)

$

6,667

 

$

824,875

 

Cost of sales

 

588,934

 

(135,207

)

1,117

 

454,844

 

Gross profit

 

425,866

 

(61,385

)

5,550

 

370,031

 

 

 

 

 

 

 

 

 

 

 

Selling and administrative expense

 

196,766

 

(19,774

)

—

 

176,992

 

Research and development expense

 

104,102

 

(5,753

)

—

 

98,349

 

Amortization of acquisition-related intangibles assets

 

3,330

 

—

 

—

 

3,330

 

Asset impairment, restructuring and other charges

 

87

 

—

 

—

 

87

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

121,581

 

(35,858

)

5,550

 

91,273

 

Other income, net

 

(15,786

)

—

 

—

 

(15,786

)

Interest income, net

 

(6,784

)

—

 

—

 

(6,784

)

Income from continuing operations before income taxes

 

144,151

 

(35,858

)

5,550

 

113,843

 

Provision for income tax

 

93,987

 

(11,166

)

1,728

 

84,549

 

Income from continuing operations

 

$

50,164

 

$

(24,692

)

$

3,822

 

$

29,294

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations per common share, basic

 

$

0.71

 

 

 

 

 

$

0.41

 

Income from continuing operations per common share, diluted

 

$

0.70

 

 

 

 

 

$

0.41

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding – basic

 

70,914

 

 

 

 

 

70,914

 

Average common shares and potentially dilutive securities outstanding – diluted

 

71,753

 

 

 

 

 

71,753

 

 

(1)       The pro forma financial information gives effect to the sale of the PCS Business as if it had occurred on the first day of the fiscal year ended June 30, 2006. This presentation reflects the elimination of the historical revenue and direct costs of the PCS Business for the nine months ended March 31, 2007 and the fiscal year ended June 30, 2006 related to the Commodity Product segments.

 

(2)       As part of the Divestiture, the Company entered into certain transition services agreements for, among other things, administrative services, wafer and packaging services and the sale of certain products.  Certain manufacturing equipment purchased by Vishay will remain at the Company’s Temecula, California facility until the end of these transition services agreements. The Company agreed to provide such services at a price equal to the Company’s cost of providing those services.  In addition, the Company entered into a die buy-back arrangement with Vishay at a price equal to Vishay’s cost for the die. The Company estimated that the fair value of the transition services agreements was approximately $20 million, and the fair value of the die buy-back agreement was approximately $3.4 million. Accordingly, the Company has allocated a portion of the purchase price to these agreements. The Company is amortizing the transition services over a three-year term as an element of revenue.  The pro forma impact of the revenue from the amortization of the fair value of the transition services agreement approximates $6.7 million per year and $5 million for the nine months ended March 31, 2007. The die buy-back agreement is being amortized over its three-year term as an element of cost of sales. The pro forma impact of the amortization of the die buy-back agreement approximates $1.1 million per year or $0.8 million for the nine months ended March 31, 2007.

 


 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION

(In thousands)

 

The accompanying unaudited pro forma condensed consolidated statements of income of International Rectifier Corporation (the “Company”), for the nine months ended March 31, 2007 and the fiscal year ended June 30, 2006, have been presented to reflect the sale of the Company’s Power Control Systems business (“PCS Business”) and have been prepared in accordance with Article 11 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended.  As the divestiture of the Company’s PCS Business (the “Divestiture”) is reflected in the Company’s historical balance sheet as of March 31, 2007, a pro forma balance sheet has not been presented herein.

 

The Company’s Non-Aligned Products segment was also sold to Vishay InterTechnology, Inc. (“Vishay”) as part of the Divestiture.  The former Non-Aligned Products segment is reported as an element of discontinued operations in the Company’s historical statements of income.  Consequently, revenues and expenses associated with the Non-Aligned Products segment are not included in the presentation of the Company’s income from continuing operations.