8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 2, 2010

INTERNATIONAL RECTIFIER CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	001-7935	95-1528961
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

101 N. Sepulveda Blvd., El Segundo, California 90245

(Address of Principal Executive Offices) (Zip Code)

(310) 726-8000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

On February 2, 2010, International Rectifier Corporation (the “Company”) issued a press release announcing its financial results for the second fiscal quarter of fiscal year 2010.  A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

The information in this Item 2.02 of this Report on Form 8-K, including Exhibit 99.1, will not be treated as “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section.  This information will not be incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this report.

Item 9.01. Financial Statement and Exhibits

(d)  Exhibits

Exhibit Number	Description
99.1	Press release of International Rectifier Corporation, dated February 2, 2010, reporting financial results for the second fiscal quarter of fiscal year 2010.

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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 hereunto duly authorized.

Date: February 2, 2010	INTERNATIONAL RECTIFIER CORPORATION
	By:	/s/ Ilan Daskal
		Name:  Ilan Daskal
		Title:    Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release of International Rectifier Corporation, dated February 2, 2010, reporting financial results for the second quarter of fiscal year 2010.

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EX-99.1

Exhibit 99.1

International Rectifier Announces Second Quarter Fiscal Year 2010 Results

EL SEGUNDO, Calif.—(BUSINESS WIRE)—February 2, 2010— International Rectifier Corporation (NYSE:IRF) today announced financial results for the second quarter (ended December 27, 2009) of its fiscal year 2010.  Revenue for the second quarter fiscal year 2010 was $210.2 million, a 17.2% increase from $179.4 million in the first quarter fiscal year 2010 and a 10.8% increase from $189.7 million in the second quarter fiscal year 2009.

International Rectifier reported net income of $28.3 million, or $0.39 per fully diluted share for second quarter fiscal year 2010, compared with a net loss of $16.9 million, or $0.24 per share, in the prior quarter, and a net loss of $189.8 million, or $2.61 per share in the second quarter fiscal year 2009.  The results for the second quarter fiscal year 2010 included $27.8 million of tax benefits from a release of tax reserves.

Gross margin was 29.9%, up from 26.4% in the prior quarter and down from 33.9% in the second quarter fiscal year 2009.

Research and development expenses for the second quarter fiscal year 2010 were $24.2 million, up from $22.8 million in the prior quarter.

Selling, general and administrative expenses for the second quarter fiscal year 2010 were $37.3 million, compared with $43.6 million in the prior quarter.  Selling, general and administrative expenses for the second quarter fiscal year 2010 included $3.2 million of cost benefits which are not expected to recur in the March quarter.

Cash, cash equivalents and marketable investments totaled $549.5 million at the end of the second quarter fiscal year 2010, including restricted cash of $3.4 million.

Net cash used in operating activities for the second quarter fiscal year 2010 was $27.4 million.  This included a previously reported $45.0 million payment related to a litigation settlement.

During the second quarter fiscal year 2010, the Company purchased 260,683 shares of its common stock under its existing share repurchase program. The Company had 71,072,883 shares outstanding at the end of the quarter.

Third Quarter Outlook

International Rectifier President and Chief Executive Officer Oleg Khaykin stated: “We believe that IR’s growth momentum and improving operational performance reflect the strategic repositioning undertaken by the Company over the past eighteen months.

“Our design win activity remains strong across all our market segments and we continue

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to see robust customer demand in the March quarter. We currently expect third quarter revenue to range from $225 million to $235 million and gross margin to range from 34% to 35%.

“Increased focus on energy efficiency continues to drive demand for power management semiconductors.  Our revitalized product portfolio has gained share over the past year and has led to increased orders in key end market segments such as servers, appliances, notebooks and high definition televisions,” Khaykin concluded.

Segment Table Information

The customer segment tables included with this release for the Company’s fiscal quarters ended December 27, 2009, September 27, 2009 and December 28, 2008, respectively, reconcile revenue and gross margin for the Company’s ongoing customer segments to the consolidated total amounts of such measures for the Company.

Quarterly Report on Form 10-Q

The Company expects to file its 2010 fiscal second quarter report on Form 10-Q with the Securities and Exchange Commission on Wednesday, February 3, 2010. This financial report will be available for viewing and download at http://investor.irf.com.

Adjustment to Opening Retained Earnings

During fiscal years 1998 through 2006 the Company reported foreign currency gains and losses from intra-company notes with its foreign subsidiaries in other comprehensive income.  These gains and losses should have been reported in other expense, net and, as a result, should have affected net income (loss).  The effect of the correction is an increase in retained earnings of $13.3 million and a decrease in accumulated other comprehensive income of $13.3 million.  See the attached tables for the effect of this adjustment on stockholders’ equity as of September 27, 2009, June 28, 2009 and December 28, 2008.

NOTE: A conference call will begin today at 5:15 p.m. Eastern time (2:15 p.m. Pacific time). All participants, both in the U.S. and international, may join the call by dialing 706-679-3195 by 2:10 p.m. Pacific time.  In order to join this conference call, participants will be required to provide the Conference Passcode — “International Rectifier”.  Participants may also listen over the Internet at http://investor.irf.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download, and install any necessary audio software.

A taped replay of this call will be available from approximately 5:15 p.m. Pacific time on Tuesday, February 2, through Tuesday, February 9, 2010. To listen to the replay by phone, call 800-642-1687 or 706-645-9291 for international callers and enter reservation number 52875492. To listen to the replay over the Internet, please go to http://investor.irf.com. The live call and replay will also be available on www.streetevents.com.

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About International Rectifier

International Rectifier Corporation (NYSE:IRF) is a world leader in power management technology. IR’s analog, digital, and mixed signal ICs, and other advanced power management products, enable high performance computing and save energy in a wide variety of business and consumer applications.  Leading manufacturers of computers, energy efficient appliances, lighting, automobiles, satellites, aircraft, and defense systems rely on IR’s power management solutions to power their next generation products. For more information, go to www.irf.com.

Forward-Looking Statements:

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to expectations concerning matters that (a) are not historical facts, (b) predict or forecast future events or results, or (c) embody assumptions that may prove to have been inaccurate.  These forward-looking statements involve risks, uncertainties and assumptions.  When we use words such as “believe,” “expect,” “anticipate,” “will” or similar expressions, we are making forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give readers any assurance that such expectations will prove correct.  The actual results may differ materially from those anticipated in the forward-looking statements as a result of numerous factors, many of which are beyond our control. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, reduced demand arising from a decline or volatility in general market and economic conditions; reduced margins from lower than expected factory utilization and inventory reduction efforts; continued volatility and further deterioration of the capital markets; the effects of longer lead times for certain products on meeting demand and any inability by us to satisfy or to timely satisfy customer demand; unexpected costs or delays in implementing our cost savings programs, including the ability to transfer, consolidate and qualify product lines and unexpected costs in connection with the closure of facilities; the ability of the Company to achieve the expected reductions in headcount and expected savings;the impact of regulatory, investigative and legal actions; increased competition in the highly competitive semiconductor business that could adversely affect the prices of our products; the effects of manufacturing, operational and vendor disruptions; delays in launching new technology products; our ability to maintain current IP licenses and obtain new IP licenses; costs arising from pending and threatened litigation or claims; inefficiencies from swine flu or similar influenza; the material weaknesses in our internal control over financial reporting that we have identified that could impact our ability to report our results of operations and financial condition accurately and in a timely manner and the extensive work remaining to remedy these material weaknesses in our internal control over financial reporting; and other uncertainties disclosed in the Company’s reports filed from time to time with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 10-Q.   Additionally, to the foregoing factors should be added the financial, market, supply disruption and other ramifications of terrorist actions and natural disasters.

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INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended
	December 27, 2009			September 27, 2009			December 28, 2008
Revenues	$	210,244		$	179,371		$	189,746
Cost of sales	147,426			132,014			125,403
Gross profit	62,818			47,357			64,343
Selling, general and administrative expense	37,285			43,582			61,528
Research and development expense	24,215			22,827			24,901
Amortization of acquisition-related intangible assets	1,094			1,094			1,098
Asset impairment, restructuring and other charges	(30		)	167			48,976
Operating income (loss)	254			(20,313		)	(72,160		)
Other expense, net	1,009			778			10,626
Interest (income) expense, net	(2,488		)	(3,970		)	769
Income (loss) before income taxes	1,733			(17,121		)	(83,555		)
Provision for (benefit from) income taxes	(26,585		)	(221		)	106,197
Net income (loss)	$	28,318		$	(16,900	)	$	(189,752	)
Net income (loss) per share-basic	$	0.40		$	(0.24	)	$	(2.61	)
Net income (loss) per share-diluted	$	0.39		$	(0.24	)	$	(2.61	)
Average common shares outstanding—basic	71,605			71,218			72,692
Average common shares and potentially dilutive securities outstanding—diluted	71,827			71,218			72,692

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INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands)

	December 27, 2009			September 27, 2009 (1)			December 28, 2008 (1)(2)
Assets
Current assets:
Cash and cash equivalents	$	209,406		$	292,499		$	399,390
Restricted cash	3,405			3,925			2,925
Short-term investments	260,727			199,116			112,209
Trade accounts receivable, net	127,141			112,928			86,997
Inventories	157,973			152,586			175,508
Current deferred tax assets	1,257			1,248			7,425
Prepaid expenses and other receivables	59,431			30,002			54,861
Total current assets	819,340			792,304			839,315
Restricted cash	—			—			15,080
Long-term investments	75,996			95,278			170,359
Property, plant and equipment, net	352,855			358,684			380,913
Goodwill	74,955			74,955			98,822
Acquisition-related intangible assets, net	9,633			10,727			14,030
Long-term deferred tax assets	7,049			7,913			467
Other assets	47,483			55,652			44,717
Total assets	$	1,387,311		$	1,395,513		$	1,563,703
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	81,960		$	70,627		$	62,525
Accrued income taxes	13,271			8,417			37,982
Accrued salaries, wages and commissions	25,039			20,890			21,930
Current deferred tax liabilities	2,793			2,793			2,266
Other accrued expenses	68,292			116,201			91,866
Total current liabilities	191,355			218,928			216,569
Long-term deferred tax liabilities	5,188			5,266			13,874
Deferred gain on divestiture	—			—			116,341
Other long-term liabilities	48,352			53,270			55,372
Total liabilities	244,895			277,464			402,156
Commitments and contingencies
Stockholders’ equity:
Common shares	73,243			73,181			72,928
Capital contributed in excess of par value of shares	988,113			984,916			975,878
Treasury stock, at cost	(28,640		)	(23,632		)	(7,431		)
Retained earnings	109,780			81,462			151,841
Accumulated other comprehensive income	(80		)	2,122			(31,669		)
Total stockholders’ equity		1,142,416		1,118,049			1,161,547
Total liabilities and stockholders’ equity	$	1,387,311		$	1,395,513		$	1,563,703

(1)During the second quarter we determined that in prior years, specifically fiscal 1998 through 2006, net foreign currency gains of $13.3 million related to intra-company loans with the Company’s foreign subsidiaries which should have been recorded in other expense, net (and, as a result, should have impacted net income (loss), were recorded in other comprehensive income.  This adjustment is reflected in the September 27, 2009 and December 28, 2008 balance sheets above.  See adjustment of opening retained earnings table in this release.

(2)In the fourth quarter of fiscal year 2009, the Company changed its method of accounting for patent-related costs.  Prior periods have been restated to reflect this change.

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INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	December 27, 2009			September  27, 2009			December 28, 2008
Cash flow from operating activities:
Net income (loss)	$	28,318		$	(16,900	)	$	(189,752	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	17,373			16,558			15,755
Amortization of acquisition-related intangible assets	1,094			1,093			1,098
Stock compensation expense	2,591			2,539			1,181
Provision for bad debt	(1,811		)	41			(34		)
Provision for inventory write-downs	(999		)	(5,135		)	3,984
Deferred income taxes	(244		)	(1,830		)	95,756
Other-than-temporary impairment of investments	99			1,905			10,320
(Gain) loss on derivatives	(1,664		)	(1,256		)	—
Net settlement of restricted stock units for tax withholding	(62		)	(192		)	(228		)
(Gain) loss on sale of investments	(1,329		)	(2,560		)	5,035
Asset impairment	—			—			50,824
Changes in operating assets and liabilities, net	(71,113		)	(2,425		)	15,612
Other	306			901			2,254
Net cash (used in) provided by operating activities	(27,441		)	(7,261		)	11,805
Cash flow from investing activities:
Additions to property, plant and equipment	(10,637		)	(9,466		)	(6,266		)
Proceeds from sale of property, plant and equipment	7			50			162
Sale or maturities of investments	76,903			52,757			165,515
Reductions (additions) to restricted cash	520			—			(34		)
Purchase of investments	(118,292		)	(110,420		)	(65,040		)
Other, net	—			—			(1,032		)
Net cash (used in) provided by investing activities	(51,499		)	(67,079		)	93,305
Cash flow from financing activities:
Proceeds from exercise of stock options	719			870			382
Reductions in restricted cash	—			—			1,416
Purchase of treasury stock	(5,008		)	—			(7,431		)
Other, net	—			—			131
Net cash (used in) provided by financing activities	(4,289		)	870			(5,502		)
Effect of exchange rate changes on cash and cash equivalents	136			208			(3,000		)
Net (decrease) increase in cash and cash equivalents	(83,093		)	(73,262		)	96,608
Cash and cash equivalents, beginning of period	292,499			365,761			302,782
Cash and cash equivalents, end of period	$	209,406		$	292,499		$	399,390

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For the three months ended December 27, 2009 and December 28, 2008, revenue and gross margin by reportable segments are as follows (in thousands, except percentages):

	Three Months Ended December 27, 2009						Three Months Ended December 28, 2008
Business Segment	Revenues		Percentage of Total		Gross Margin		Revenues		Percentage of Total		Gross Margin
Power Management Devices	$	75,994	36.1	%	9.9	%	$	64,134	33.8	%	19.4	%
Energy-Saving Products	40,358		19.2		36.4		39,422		20.8		43.3
HiRel	39,797		18.9		50.9		39,433		20.8		56.7
Automotive Products	16,935		8.1		13.7		13,474		7.1		27.9
Enterprise Power	33,741		16.0		43.2		19,350		10.2		42.4
Ongoing customer segments total	206,825		98.4		28.7		175,813		92.7		36.3
Intellectual Property	3,419		1.6		100.0		2,594		1.3		100.0
Ongoing segments total	210,244		100.0		29.9		178,407		94.0		37.3
Transition Services	—		—		—		11,339		6.0		(18.6	)
Consolidated total	$	210,244	100.0	%	29.9	%	$	189,746	100.0	%	33.9	%

For the three months ended September 27, 2009, revenue and gross margin by reportable segments are as follows (in thousands, except percentages):

	Three Months Ended September 27, 2009
Business Segment	Revenues		Percentage of Total		Gross Margin
Power Management Devices	$	66,524	37.1	%	5.3	%
Energy-Saving Products	37,863		21.1		34.6
HiRel	32,609		18.2		48.2
Automotive Products	13,192		7.4		18.3
Enterprise Power	27,445		15.3		39.6
Ongoing customer segments total	177,633		99.0		25.7
Intellectual Property	1,738		1.0		100.0
Ongoing segments total	179,371		100.0		26.4
Transition Services	—		—		—
Consolidated total	$	179,371	100.0	%	26.4	%

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Adjustment of Opening Retained Earnings

The effect of the adjustments to the previously reported retained earnings and accumulated other comprehensive income as of September 27, 2009, June 28, 2009, and December 28, 2008 to properly reflect these balances in the recording of net foreign currency gains related to intra-company loans are summarized below (in thousands):

	September 27, 2009
	As Previously Reported			Effect of Adjustment			As Adjusted
Stockholders’ equity:
Common shares	$	73,181		$	—		$	73,181
Capital contributed in excess of par value of shares	984,916			—			984,916
Treasury stock, at cost	(23,632		)	—			(23,632		)
Retained earnings	68,115			13,347			81,462
Accumulated other comprehensive income	15,469			(13,347		)	2,122
Total stockholders’ equity	$	1,118,049		$	—		$	1,118,049

	June 28, 2009
	As Previously Reported			Effect of Adjustment			As Adjusted
Stockholders’ equity:
Common shares	$	73,101		$	—		$	73,101
Capital contributed in excess of par value of shares	981,786			—			981,786
Treasury stock, at cost	(23,632		)	—			(23,632		)
Retained earnings	85,015			13,347			98,362
Accumulated other comprehensive income	18,982			(13,347		)	5,635
Total stockholders’ equity	$	1,135,252		$	—		$	1,135,252

	December 28, 2008
	As Previously Reported			Effect of Adjustment			As Adjusted
Stockholders’ equity:
Common shares	$	72,928		$	—		$	72,928
Capital contributed in excess of par value of shares	975,878			—			975,878
Treasury stock, at cost	(7,431		)	—			(7,431		)
Retained earnings	138,494			13,347			151,841
Accumulated other comprehensive income	(18,322		)	(13,347		)	(31,669		)
Total stockholders’ equity	$	1,161,547		$	—		$	1,161,547

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Company contacts:

Investors:

Chris Toth

310.252.7731

Media:

Graham Robertson

310.529.0321

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