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) November 3, 2011
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-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 November 3, 2011, International Rectifier Corporation (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal year 2012. 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 November 3, 2011, reporting financial results for the first quarter of fiscal year 2012. |
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: November 3, 2011 |
INTERNATIONAL RECTIFIER CORPORATION | ||
|
|
|
| |
|
|
By: |
/s/ Ilan Daskal | |
|
|
|
Name: |
Ilan Daskal |
|
|
|
Title: |
Chief Financial Officer |
Exhibit 99.1
International Rectifier Announces First Quarter 2012 Results
EL SEGUNDO, Calif.—(BUSINESS WIRE)—November 3, 2011— International Rectifier Corporation (NYSE:IRF) today announced financial results for the first quarter (ended September 25, 2011) of its fiscal year 2012. Revenue for the first quarter fiscal year 2012 was $302.7 million, a 4.6% decrease from $317.2 million in the fourth quarter fiscal year 2011 and a 7.8% increase from $280.9 million in the first quarter fiscal year 2011.
International Rectifier reported net income of $22.0 million, or $0.31 per fully diluted share for the first quarter fiscal year 2012, compared with net income of $39.6 million, or $0.55 per fully diluted share in the fourth quarter fiscal year 2011. The fourth quarter fiscal year 2011 results included a $12.4 million gross tax benefit that increased fully diluted earnings per share by $0.18. For the first quarter fiscal year 2011, International Rectifier reported a net income of $33.5 million, or $0.47 per fully diluted share. The first quarter fiscal year 2011 results included a $3.8 million gross tax benefit that increased fully diluted earnings per share by $0.05.
President and Chief Executive Officer Oleg Khaykin stated: “Sales during the September quarter were impacted by softening end market demand, inventory correction in our discrete MOSFET business, and seasonality in the automotive end market. Bright spots for the quarter included modest growth in high performance computing and in our high reliability products.”
Gross margin for the first quarter fiscal year 2012 was 37.9%, up 0.7 percentage points compared with the fourth quarter fiscal year 2011 and down from 38.7% in the first quarter fiscal year 2011.
Operating income was $30.2 million or 10% of revenue compared with $30.6 million or 9.7% of revenue in the fourth quarter fiscal year 2011 and down from operating income of $31.6 million or 11.3% of revenue in the first quarter fiscal year 2011.
Research and development expenses for the first quarter fiscal year 2012 were $33.0 million, up from $32.5 million in the fourth quarter fiscal year 2011.
Selling, general and administrative expenses for the first quarter fiscal year 2012 were $49.0 million, down from $52.1 million in the fourth quarter fiscal year 2011.
Cash, cash equivalents and marketable investments totaled $443.7 million at the end of the first quarter fiscal year 2012, including restricted cash of $2.1 million.
Cash provided by operating activities for the first quarter fiscal year 2012 was $16.6 million.
During the first quarter fiscal year 2012, the Company purchased 1,098,834 shares of its common stock for $23.6 million. The Company had 68,981,933 shares outstanding at the end of the quarter.
December Quarter Outlook
Oleg Khaykin noted: “We take a conservative outlook for the December quarter as we and our customers work to reduce inventories. As a result, we currently expect revenue to range from $240 million to $270 million. Gross margin is expected to range from 34% to 36%, mainly due to planned lower factory utilization.
“Despite the cyclical downturn in the industry, we remain focused on future growth. Design win activity remains strong in a number of our technologies notably in high-voltage IC and IGBT products, digital power, and in our low- and mid-voltage MOSFETs.”
Segment Table Information/Customer Segments
The business segment tables included with this release for the Company’s fiscal quarters ended September 25, 2011, June 26, 2011, and September 26, 2010, respectively, reconcile revenue and gross margin for the Company’s customer segments to the consolidated total amounts of such measures for the Company. What we refer to as our “customer segments” includes our Power Management Devices, Energy Saving Products, Automotive Products, Enterprise Power and HiRel reporting segments, and does not include our Intellectual Property reporting segment.
Quarterly Report on Form 10-Q
The Company expects to file its Quarterly Report on Form 10-Q for the first quarter of its 2012 fiscal year with the Securities and Exchange Commission on Friday, November 4, 2011. This financial report will be available for viewing and download at http://investor.irf.com.
NOTE: A conference call will begin today at 2:00 p.m. Pacific time. CEO Oleg Khaykin and CFO Ilan Daskal will discuss the company’s September quarter results and December quarter outlook. All participants, both in the U.S. and international, may join the call by dialing 706-679-3195 by 1:55 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 6:00 p.m. Pacific time on Thursday, November 3 through Thursday, November 10, 2011. To listen to the replay by phone, call 855-859-2056 or 404-537-3406 for international callers and enter reservation number 16583096. 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.
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 or customer forecasts; order cancellations due to decreased demand or softening market conditions for customer products; reduced margins from lower than expected factory utilization and higher than expected costs; operational disruptions from implementing our new enterprise resource planning (ERP) system and additional costs related thereto; additional costs or adverse financial effects from implementing our strategic growth initiatives; volatility or deterioration of 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, including, without limitation, operational effects from our ERP system; unexpected costs or delays in implementing our plans to secure and qualify additional manufacturing capacity for our products, including the use of third party contract manufacturers and the purchase and installation of additional manufacturing equipment; the adverse impact of regulatory, investigative and legal actions; increased competition in the highly competitive semiconductor business that could adversely affect the prices of our products or our ability to secure additional business; the effects of manufacturing, operational and vendor disruptions; unexpected delays and disruptions in our supply, manufacturing and delivery efforts due to, among other things, supply constraints, equipment malfunction, power or other utility disruptions or natural disasters (including without limitation, any effects from events that may occur from natural and related disasters affecting Japan, Thailand and the United States); delays in launching new technology products; our ability to maintain current intellectual property licenses and obtain new intellectual property licenses; costs arising from pending and threatened litigation or claims (including, without limitation threatened litigation and claims related to intellectual property); 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, as filed from time to time.
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|
|
|
Three Months Ended |
| |||||||
|
|
|
September 25, |
|
June 26, |
|
September 26, |
| |||
|
Revenues |
|
$ |
302,741 |
|
$ |
317,249 |
|
$ |
280,867 |
|
|
Cost of sales |
|
187,903 |
|
199,375 |
|
172,043 |
| |||
|
Gross profit |
|
114,838 |
|
117,874 |
|
108,824 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Selling, general and administrative expense |
|
48,991 |
|
52,141 |
|
48,310 |
| |||
|
Research and development expense |
|
33,028 |
|
32,502 |
|
27,560 |
| |||
|
Amortization of acquisition-related intangible assets |
|
2,615 |
|
2,612 |
|
1,219 |
| |||
|
Asset impairment, restructuring and other charges |
|
— |
|
— |
|
134 |
| |||
|
Operating income |
|
30,204 |
|
30,619 |
|
31,601 |
| |||
|
Other expense (income), net |
|
2,203 |
|
(954 |
) |
1,312 |
| |||
|
Interest income, net |
|
(209 |
) |
(1,859 |
) |
(1,409 |
) | |||
|
Income before income taxes |
|
28,210 |
|
33,432 |
|
31,698 |
| |||
|
Provision for (benefit from) income taxes |
|
6,247 |
|
(6,202 |
) |
(1,800 |
) | |||
|
Net income |
|
$ |
21,963 |
|
$ |
39,634 |
|
$ |
33,498 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income per common share-basic (1) |
|
$ |
0.31 |
|
$ |
0.56 |
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income per common share-diluted (1) |
|
$ |
0.31 |
|
$ |
0.55 |
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
| |||
|
Average common shares outstanding—basic |
|
69,768 |
|
69,827 |
|
70,165 |
| |||
|
Average common shares and potentially dilutive securities outstanding—diluted |
|
70,285 |
|
70,522 |
|
70,483 |
| |||
|
(1) |
|
Net income per common share is computed using the two-class method as required by accounting rules. We do not pay dividends; however, net income must be allocated to unvested restricted stock units (“RSUs”) on which we could pay dividend equivalents. The amount of net income allocated to these RSUs is excluded from income available to common shareholders in the calculation of earnings per share. These amounts were $267 thousand, $573 thousand, and $539 thousand for the three months ended September 25, 2011, June 26, 2011, and September 26, 2010, respectively. |
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
September 25, |
|
June 26, 2011 |
|
September 26, |
| |||
|
Assets |
|
|
|
|
|
|
| |||
|
Current assets: |
|
|
|
|
|
|
| |||
|
Cash and cash equivalents |
|
$ |
264,539 |
|
$ |
298,731 |
|
$ |
229,682 |
|
|
Restricted cash |
|
445 |
|
439 |
|
1,629 |
| |||
|
Short-term investments |
|
172,248 |
|
185,541 |
|
281,170 |
| |||
|
Trade accounts receivable, net |
|
183,408 |
|
196,153 |
|
171,432 |
| |||
|
Inventories |
|
282,927 |
|
250,174 |
|
187,574 |
| |||
|
Current deferred tax assets |
|
1,988 |
|
1,950 |
|
2,159 |
| |||
|
Prepaid expenses and other receivables |
|
34,918 |
|
33,943 |
|
37,177 |
| |||
|
Total current assets |
|
940,473 |
|
966,931 |
|
910,823 |
| |||
|
Restricted cash |
|
1,632 |
|
1,632 |
|
1,776 |
| |||
|
Long-term investments |
|
4,815 |
|
13,325 |
|
61,292 |
| |||
|
Property, plant and equipment, net |
|
459,061 |
|
444,759 |
|
361,392 |
| |||
|
Goodwill |
|
121,570 |
|
121,570 |
|
74,955 |
| |||
|
Acquisition-related intangible assets, net |
|
34,330 |
|
36,945 |
|
13,728 |
| |||
|
Long-term deferred tax assets |
|
25,118 |
|
23,403 |
|
8,072 |
| |||
|
Other assets |
|
55,519 |
|
62,419 |
|
45,965 |
| |||
|
Total assets |
|
$ |
1,642,518 |
|
$ |
1,670,984 |
|
$ |
1,478,003 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
| |||
|
Current liabilities: |
|
|
|
|
|
|
| |||
|
Accounts payable |
|
$ |
102,509 |
|
$ |
123,922 |
|
$ |
95,069 |
|
|
Accrued income taxes |
|
11,714 |
|
6,850 |
|
5,838 |
| |||
|
Accrued salaries, wages and commissions |
|
40,558 |
|
45,552 |
|
36,998 |
| |||
|
Current deferred tax liabilities |
|
2 |
|
2 |
|
1,687 |
| |||
|
Other accrued expenses |
|
100,774 |
|
97,402 |
|
82,640 |
| |||
|
Total current liabilities |
|
255,557 |
|
273,728 |
|
222,232 |
| |||
|
Long-term deferred tax liabilities |
|
3,845 |
|
3,845 |
|
5,335 |
| |||
|
Other long-term liabilities |
|
35,662 |
|
35,499 |
|
32,853 |
| |||
|
Total liabilities |
|
295,064 |
|
313,072 |
|
260,420 |
| |||
|
Commitments and contingencies |
|
|
|
|
|
|
| |||
|
Stockholders’ equity: |
|
|
|
|
|
|
| |||
|
Common shares |
|
74,708 |
|
74,527 |
|
73,603 |
| |||
|
Capital contributed in excess of par value of shares |
|
1,023,632 |
|
1,021,509 |
|
1,002,546 |
| |||
|
Treasury stock, at cost |
|
(104,821 |
) |
(81,245 |
) |
(68,701 |
) | |||
|
Retained earnings |
|
367,698 |
|
345,735 |
|
212,687 |
| |||
|
Accumulated other comprehensive loss |
|
(13,763 |
) |
(2,614 |
) |
(2,552 |
) | |||
|
Total stockholders’ equity |
|
1,347,454 |
|
1,357,912 |
|
1,217,583 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
1,642,518 |
|
$ |
1,670,984 |
|
$ |
1,478,003 |
|
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
September |
|
June 26, |
|
September 26, |
| |||
|
Cash flows from operating activities: |
|
|
|
|
|
|
| |||
|
Net income |
|
$ |
21,963 |
|
$ |
39,634 |
|
$ |
33,498 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
| |||
|
Depreciation and amortization |
|
19,523 |
|
19,575 |
|
18,943 |
| |||
|
Amortization of acquisition-related intangible assets |
|
2,615 |
|
2,612 |
|
1,219 |
| |||
|
Loss (gain) on disposal of fixed assets |
|
692 |
|
147 |
|
(349 |
) | |||
|
Stock compensation expense |
|
3,707 |
|
4,236 |
|
4,365 |
| |||
|
Gain on sale of investments |
|
(54 |
) |
(1,698 |
) |
(537 |
) | |||
|
Other-than-temporary impairment of investments |
|
535 |
|
482 |
|
538 |
| |||
|
Provision for (recovery of) bad debts |
|
1,232 |
|
(814 |
) |
92 |
| |||
|
Provision for inventory write-downs |
|
4,211 |
|
2,082 |
|
2,036 |
| |||
|
(Gain) loss on derivatives |
|
(1,409 |
) |
(745 |
) |
762 |
| |||
|
Deferred income taxes |
|
1,424 |
|
(13,182 |
) |
218 |
| |||
|
Tax benefit from stock-based awards |
|
— |
|
369 |
|
— |
| |||
|
Excess tax benefit from stock-based awards |
|
(623 |
) |
(697 |
) |
(50 |
) | |||
|
Changes in operating assets and liabilities, net |
|
(39,237 |
) |
11,481 |
|
(20,418 |
) | |||
|
Other |
|
2,021 |
|
(1,220 |
) |
(2,443 |
) | |||
|
Net cash provided by operating activities |
|
16,600 |
|
62,262 |
|
37,874 |
| |||
|
Cash flows from investing activities: |
|
|
|
|
|
|
| |||
|
Additions to property, plant and equipment |
|
(45,245 |
) |
(52,638 |
) |
(22,731 |
) | |||
|
Business acquisitions |
|
— |
|
272 |
|
— |
| |||
|
Acquisition of intellectual property |
|
— |
|
— |
|
(7,500 |
) | |||
|
Sale of investments |
|
5,342 |
|
9,307 |
|
1,383 |
| |||
|
Maturities of investments |
|
52,025 |
|
70,050 |
|
113,650 |
| |||
|
Purchase of investments |
|
(36,096 |
) |
(61,453 |
) |
(104,129 |
) | |||
|
(Additions to) release from restricted cash |
|
(21 |
) |
906 |
|
261 |
| |||
|
Purchase of cost-based investments |
|
— |
|
— |
|
(1,500 |
) | |||
|
Net cash used in investing activities |
|
(23,995 |
) |
(33,556 |
) |
(20,566 |
) | |||
|
Cash flows from financing activities: |
|
|
|
|
|
|
| |||
|
Proceeds from exercise of stock options |
|
399 |
|
1,173 |
|
850 |
| |||
|
Excess tax benefit from stock-based awards |
|
623 |
|
697 |
|
50 |
| |||
|
Purchase of treasury stock |
|
(23,576 |
) |
1 |
|
(20,031 |
) | |||
|
Net settlement of restricted stock units for tax withholdings |
|
(1,802 |
) |
(835 |
) |
(228 |
) | |||
|
Net cash (used in) provided by financing activities |
|
(24,356 |
) |
1,036 |
|
(19,359 |
) | |||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(2,441 |
) |
(165 |
) |
1,944 |
| |||
|
Net (decrease) increase in cash and cash equivalents |
|
(34,192 |
) |
29,577 |
|
(107 |
) | |||
|
Cash and cash equivalents, beginning of period |
|
298,731 |
|
269,154 |
|
229,789 |
| |||
|
Cash and cash equivalents, end of period |
|
$ |
264,539 |
|
$ |
298,731 |
|
$ |
229,682 |
|
|
(1) |
|
Certain reclassifications have been made to the previously reported amounts to conform to the current presentation. |
For the three months ended September 25, 2011 and June 26, 2011, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
|
|
|
September 25, 2011 |
|
June 26, 2011 |
| ||||||||||
|
Business Segment |
|
Revenues |
|
Percentage |
|
Gross |
|
Revenues |
|
Percentage |
|
Gross |
| ||
|
Power management devices |
|
$ |
111,207 |
|
36.7 |
% |
29.4 |
% |
$ |
124,555 |
|
39.3 |
% |
30.0 |
% |
|
Energy saving products |
|
76,058 |
|
25.1 |
|
41.4 |
|
77,636 |
|
24.5 |
|
44.3 |
| ||
|
Automotive products |
|
28,900 |
|
9.6 |
|
31.5 |
|
31,881 |
|
10.0 |
|
27.5 |
| ||
|
Enterprise power |
|
35,966 |
|
11.9 |
|
40.3 |
|
34,700 |
|
10.9 |
|
37.5 |
| ||
|
HiRel |
|
48,842 |
|
16.1 |
|
51.8 |
|
46,788 |
|
14.7 |
|
48.4 |
| ||
|
Customer segments total |
|
300,973 |
|
99.4 |
|
37.6 |
|
315,560 |
|
99.5 |
|
36.8 |
| ||
|
Intellectual property |
|
1,768 |
|
0.6 |
|
100.0 |
|
1,689 |
|
0.5 |
|
100.0 |
| ||
|
Consolidated total |
|
$ |
302,741 |
|
100.0 |
% |
37.9 |
% |
$ |
317,249 |
|
100.0 |
% |
37.2 |
% |
For the three months ended September 26, 2010, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
|
|
|
September 26, 2010 |
| |||||
|
Business Segment |
|
Revenues |
|
Percentage |
|
Gross |
| |
|
Power management devices |
|
$ |
115,524 |
|
41.1 |
% |
29.5 |
% |
|
Energy saving products |
|
60,016 |
|
21.4 |
|
42.5 |
| |
|
Automotive products |
|
23,920 |
|
8.5 |
|
32.0 |
| |
|
Enterprise power |
|
35,229 |
|
12.6 |
|
47.3 |
| |
|
HiRel |
|
44,197 |
|
15.7 |
|
52.1 |
| |
|
Customer segments total |
|
278,886 |
|
99.3 |
|
38.3 |
| |
|
Intellectual property |
|
1,981 |
|
0.7 |
|
100.0 |
| |
|
Consolidated total |
|
$ |
280,867 |
|
100.0 |
% |
38.7 |
% |
***
Company contacts:
Investors:
Chris Toth
310.252.7731
Media:
Sian Cummings
310.252.7148