0001104659-13-034208.txt : 20130429 0001104659-13-034208.hdr.sgml : 20130427 20130429161054 ACCESSION NUMBER: 0001104659-13-034208 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20130429 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20130429 DATE AS OF CHANGE: 20130429 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: 0626 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07935 FILM NUMBER: 13791765 BUSINESS ADDRESS: STREET 1: 233 KANSAS ST CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107268000 8-K 1 a13-11048_18k.htm 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):  April 29, 2013

 

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 April 29, 2013, International Rectifier Corporation (the “Company”) issued a press release announcing its financial results for the third fiscal quarter of fiscal year 2013.  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 April 29, 2013, reporting financial results for the third quarter of fiscal year 2013.

 

2



 

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: April 29, 2013

INTERNATIONAL RECTIFIER CORPORATION

 

 

 

By:

/s/ Ilan Daskal

 

 

Name:  Ilan Daskal

 

 

Title:    Chief Financial Officer

 

3



 

EXHIBIT INDEX

 

Exhibit Number

 

Description

99.1

 

Press release of International Rectifier Corporation, dated April 29, 2013, reporting financial results for the third fiscal quarter of fiscal year 2013.

 

4


EX-99.1 2 a13-11048_1ex99d1.htm EX-99.1

Exhibit 99.1

 

International Rectifier Reports Third Quarter Results

 

EL SEGUNDO, Calif.—(BUSINESS WIRE)—April 29, 2013— International Rectifier Corporation (NYSE:IRF) today announced financial results for the third quarter (ended March 24, 2013) of its fiscal year 2013.  Revenue was $224.3 million, which was flat compared to $223.8 million in the prior quarter and a 9.6% decrease from $248.1 million in the prior year quarter. GAAP net loss for the third quarter was $21.2 million, or $0.31 per fully diluted share compared to GAAP net loss of $32.7 million, or $0.47 per fully diluted share, in the prior quarter and GAAP net loss of $2.5 million, or $0.04 per fully diluted share in the prior year quarter.

 

“Throughout the March quarter, we saw booking trends improve across all our end markets,” stated President and Chief Executive Officer Oleg Khaykin. “In addition, we decreased inventory, closed our El Segundo manufacturing facility, reduced our capital expenditures and increased our cash balance by $20 million.  As a result of improving business demand, resizing our manufacturing footprint and reducing fixed costs, our gross margin recovery is currently tracking ahead of prior expectations.”

 

GAAP gross margin for the third quarter was 24.3% compared to 21.9% in the prior quarter and 29.8% in the prior year quarter. GAAP operating loss for the third quarter was $20 million compared to an operating loss of $34.7 million in the prior quarter and an operating loss of $7.1 million in the prior year quarter.

 

Cash, cash equivalents and marketable investments increased $20 million and totaled $403.4 million at the end of the third quarter, including restricted cash of $1.4 million.

 

Cash provided by operating activities for the quarter was $33.2 million and free cash flow was $20.3 million.

 

Non-GAAP Results

 

The non-GAAP results the Company provides exclude the effects of accelerated depreciation, asset impairment and inventory write-offs associated with our El Segundo fab closure, restructuring costs, severance costs, impairment of goodwill, amortization of intangibles, the associated net tax effects of these items, and discrete tax provisions and benefits. The Company excludes any tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability.

 

A reconciliation of these non-GAAP measures to the Company’s reported net income (loss), gross margin and operating income (loss) in accordance with U.S. GAAP are set forth in the attached schedules below and on our web-site at www.investor.irf.com.

 

On this basis, non-GAAP net loss for the third quarter was $19.8 million, or $0.29 per fully diluted share compared to non-GAAP net loss of $30.3 million, or $0.44 per fully diluted share in the prior quarter and non-GAAP net loss of $14.9 million, or $0.22 per fully diluted share in the prior year quarter.

 



 

GAAP gross margin for the third quarter (there is no non-GAAP gross margin for the third quarter) was 24.3% compared to non-GAAP gross margin of 22.2% in the prior quarter and GAAP gross margin of 29.8% in the prior year quarter (there is no non-GAAP gross margin for the third quarter of prior year quarter). Non-GAAP operating loss for the third quarter was $17.5 million compared to non-GAAP operating loss of $27.6 million in the prior quarter and non-GAAP operating loss of $10.3 million in the prior year quarter.

 

June Quarter Outlook

 

Mr. Khaykin noted: “Looking ahead to our 14-week June quarter, we are seeing solid revenue growth as the demand across our end markets is showing improvement.  With improving demand and lower inventory we are starting to see positive gross margin leverage from rising utilization, improving product mix and manufacturing efficiencies.  As a result, we currently expect revenue for the June quarter to range between $255 million to $265 million and gross margin to range between 28% and 30%.”

 

The following table outlines International Rectifier’s current forward looking June quarter outlook (on a GAAP basis):

 

Revenue (14-week quarter)

 

$255 to $265 million

Gross margin

 

28% to 30%

Research and development expense (14-week quarter)

 

$32 million

Sales, general and administrative expense (14-week quarter)

 

$47 million

Asset impairment, restructuring and other charges

 

$1 to $2 million

Amortization of acquisition related intangibles

 

$1.7 million

Other expense, net

 

$1 million

Tax expense

 

$4 million

 

Segment Table Information/Customer Segments

 

The business segment tables included with this release for the Company’s fiscal quarters ended March 24, 2013, December 23, 2012, and March 25, 2012, respectively, reconcile revenue and gross margin for the Company’s segments to the consolidated total amounts of such measures for the Company.

 

Quarterly Report on Form 10-Q

 

The Company expects to file its Quarterly Report on Form 10-Q for the third quarter of the 2013 fiscal year with the Securities and Exchange Commission on Tuesday, April 30, 2013. 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 March quarter results and June 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 Monday, April 29 through Monday, May 6, 2013. To listen to the replay by phone, call 855-859-2056 or 404-537-3406 for international callers and enter reservation number 40285252. 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”, “outlook” 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, lower than expected demand or greater than expected order cancellations arising from a decline or volatility in general market and economic conditions and the failure of the market to improve as anticipated; reduced margins from lower than expected factory utilization, higher than expected costs and customer shifts to lower margin products; changes in the timing or amount of costs associated with, or disruptions caused by, our restructuring initiatives; our ability to implement our restructuring initiatives as planned and achieve the anticipated benefits, which may be affected by, among other things: customer requirements, changes in business conditions and/or operational needs, retention of key employees, governmental regulations, delays and increased costs; unexpected costs or delays in implementing our plans to secure and qualify external manufacturing capacity for our products, including the purchase and installation of additional manufacturing equipment; 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; volatility or deterioration of capital markets; 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 or natural disasters; 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; the effects of natural disasters; 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.

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

(In thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 24,
2013

 

December
23, 2012

 

March 25,
2012

 

Revenues

 

$

224,268

 

$

223,822

 

$

248,094

 

Cost of sales

 

169,860

 

174,733

 

174,132

 

Gross profit

 

54,408

 

49,089

 

73,962

 

 

 

 

 

 

 

 

 

Selling, general and administrative expense

 

43,020

 

45,083

 

49,578

 

Research and development expense

 

28,876

 

32,125

 

34,798

 

Amortization of acquisition-related intangible assets

 

1,663

 

1,680

 

2,097

 

Asset impairment, restructuring and other charges

 

880

 

4,941

 

 

Gain on disposition of property

 

 

 

(5,410

)

Operating loss

 

(20,031

)

(34,740

)

(7,101

)

Other expense (income), net

 

(450

)

411

 

(46

)

Interest expense (income), net

 

64

 

(8

)

(47

)

Loss before income taxes

 

(19,645

)

(35,143

)

(7,008

)

Provision for (benefit from) income taxes

 

1,600

 

(2,421

)

(4,518

)

Net loss

 

$

(21,245

)

$

(32,722

)

$

(2,490

)

 

 

 

 

 

 

 

 

Net loss per common share—basic (1)

 

$

(0.31

)

$

(0.47

)

$

(0.04

)

Net loss per common share—diluted (1)

 

$

(0.31

)

$

(0.47

)

$

(0.04

)

 

 

 

 

 

 

 

 

Average common shares outstanding—basic

 

69,273

 

69,144

 

69,104

 

Average common shares and potentially dilutive securities outstanding—diluted

 

69,273

 

69,144

 

69,104

 

 


(1)         Net income (loss) 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.  As we were in a net loss for the three months ended March 24, 2013, December 23, 2012, and March 25, 2012, we did not have any income to allocate to unvested RSUs on which we could pay dividend equivalents.

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

 

(In thousands)

 

 

 

March 24,
2013

 

December 23,
2012

 

March 25,
2012

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

386,994

 

$

366,656

 

$

217,500

 

Restricted cash

 

613

 

624

 

437

 

Short-term investments

 

15,058

 

10,104

 

126,134

 

Trade accounts receivable, net of allowances

 

134,987

 

134,029

 

173,819

 

Inventories

 

231,703

 

260,717

 

307,269

 

Current deferred tax assets

 

5,040

 

5,181

 

1,974

 

Prepaid expenses and other receivables

 

35,529

 

36,095

 

37,388

 

Total current assets

 

809,924

 

813,406

 

864,521

 

Restricted cash

 

738

 

940

 

942

 

Long-term investments

 

 

5,003

 

21,144

 

Property, plant and equipment, net

 

432,635

 

456,139

 

469,985

 

Goodwill

 

52,149

 

52,149

 

121,570

 

Acquisition-related intangible assets, net

 

23,553

 

25,216

 

30,294

 

Long-term deferred tax assets

 

34,775

 

37,456

 

26,501

 

Other assets

 

58,160

 

60,004

 

65,870

 

Total assets

 

$

1,411,934

 

$

1,450,313

 

$

1,600,827

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

64,565

 

$

70,649

 

$

79,053

 

Accrued income taxes

 

470

 

496

 

2,840

 

Accrued salaries, wages and commissions

 

34,721

 

40,740

 

33,600

 

Current deferred tax liabilities

 

 

 

2

 

Other accrued expenses

 

77,211

 

73,822

 

90,004

 

Total current liabilities

 

176,967

 

185,707

 

205,499

 

Long-term deferred tax liabilities

 

4,479

 

4,928

 

3,857

 

Other long-term liabilities

 

25,882

 

30,186

 

36,720

 

Total liabilities

 

207,328

 

220,821

 

246,076

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common shares

 

75,609

 

75,353

 

74,887

 

Capital contributed in excess of par value

 

1,056,515

 

1,048,586

 

1,034,774

 

Treasury stock, at cost

 

(113,175

)

(113,175

)

(104,821

)

Retained earnings

 

207,943

 

229,188

 

358,871

 

Accumulated other comprehensive loss

 

(22,286

)

(10,460

)

(8,960

)

Total stockholders’ equity

 

1,204,606

 

1,229,492

 

1,354,751

 

Total liabilities and stockholders’ equity

 

$

1,411,934

 

$

1,450,313

 

$

1,600,827

 

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In thousands)

 

 

 

Three Months Ended

 

 

 

March 24,
2013
(Unaudited)

 

December
23, 2012
(Unaudited)

 

March 25,
2012
(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

 

$

(21,245

)

$

(32,722

)

$

(2,490

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

22,787

 

23,088

 

21,893

 

Amortization of acquisition-related intangible assets

 

1,663

 

1,680

 

2,097

 

Loss on disposal of fixed assets

 

234

 

4,183

 

551

 

Stock compensation expense

 

5,297

 

5,378

 

4,140

 

Gain on disposition of property

 

 

 

(5,410

)

(Gain) loss on sale of investments

 

 

(8

)

17

 

Other-than-temporary impairment of investments

 

350

 

 

4

 

Recovery of bad debts

 

(64

)

 

(241

)

Provision for inventory write-downs

 

3,884

 

6,060

 

4,185

 

Impairment of long-lived assets

 

415

 

2,376

 

 

(Gain) loss on derivatives

 

(1,952

)

(93

)

1,457

 

Deferred income taxes

 

31

 

227

 

(12,393

)

Tax benefit from stock-based awards

 

 

 

1,674

 

Excess tax benefit from stock-based awards

 

 

1

 

(157

)

Changes in operating assets and liabilities, net

 

17,781

 

30,727

 

(31,743

)

Other

 

3,986

 

1,028

 

1,947

 

Net cash provided by (used in) operating activities

 

33,167

 

41,925

 

(14,469

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(12,884

)

(26,054

)

(24,675

)

Proceeds from sale of property, plant and equipment

 

 

 

5,524

 

Sale of investments

 

 

52,131

 

12,246

 

Maturities of investments

 

 

18,500

 

36,300

 

Purchase of investments

 

 

 

(70,411

)

Release from (addition to) restricted cash

 

187

 

(9

)

36

 

Net cash used in (provided by) investing activities

 

(12,697

)

44,568

 

(40,980

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

3,355

 

324

 

588

 

Excess tax benefit from stock-based awards

 

 

(1

)

157

 

Net settlement of restricted stock units for tax withholdings

 

(467

)

(45

)

(621

)

Net cash provided by financing activities

 

2,888

 

278

 

124

 

Effect of exchange rate changes on cash and cash equivalents

 

(3,020

)

70

 

1,336

 

Net increase (decrease) in cash and cash equivalents

 

20,338

 

86,841

 

(53,989

)

Cash and cash equivalents, beginning of period

 

366,656

 

279,815

 

271,489

 

Cash and cash equivalents, end of period

 

$

386,994

 

$

366,656

 

217,500

 

 



 

For the three months ended March 24, 2013, December 23, 2012, and March 25, 2012, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):

 

 

 

Three Months Ended

 

 

 

March 24, 2013

 

December 23, 2012

 

March 25, 2012

 

Business Segment

 

Revenues

 

Percentage
of Total

 

Gross
Margin

 

Revenues

 

Percentage
of Total

 

Gross
Margin

 

Revenues

 

Percentage
of Total

 

Gross
Margin

 

Power management devices

 

$

85,209

 

38.0

%

21.0

%

$

83,273

 

37.2

%

14.5

%

$

80,653

 

32.5

%

19.0

%

Energy saving products

 

43,614

 

19.4

 

12.2

 

36,174

 

16.2

 

14.8

 

57,362

 

23.1

 

29.7

 

Automotive products

 

31,107

 

13.9

 

22.0

 

28,414

 

12.7

 

11.1

 

28,799

 

11.6

 

18.2

 

Enterprise power

 

20,488

 

9.1

 

36.1

 

28,649

 

12.8

 

25.0

 

32,194

 

13.0

 

31.0

 

HiRel

 

43,554

 

19.4

 

38.4

 

47,061

 

21.0

 

44.7

 

48,652

 

19.6

 

53.3

 

Customer segments total

 

223,972

 

99.9

 

24.2

 

223,571

 

99.9

 

21.8

 

247,660

 

99.8

 

29.7

 

Intellectual property

 

296

 

0.1

 

100.0

 

251

 

0.1

 

100.0

 

434

 

0.2

 

100.0

 

Consolidated total

 

$

224,268

 

100.0

%

24.3

%

$

223,822

 

100.0

%

21.9

%

$

248,094

 

100.0

%

29.8

%

 

For the three months ended March 24, 2013, December 23, 2012, and March 25, 2012, stock-based compensation was as follows (in thousands):

 

 

 

Three Months Ended

 

 

 

March 24,
2013

 

December 23,
2012

 

March 25,
2012

 

Selling, general and administrative expense

 

$

2,693

 

$

2,858

 

$

2,166

 

Research and development expense

 

1,583

 

1,397

 

1,155

 

Cost of sales

 

1,021

 

1,123

 

819

 

Total stock-based compensation expense

 

$

5,297

 

$

5,378

 

$

4,140

 

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

NON-GAAP RESULTS

 

(In thousands, except per share and gross profit-percentage data)

 

Reconciliation of GAAP to Non-GAAP Gross Profit:

 

 

 

Three Months Ended

 

 

 

March 24,
2013

 

December 23,
2012

 

March 25,
2012

 

GAAP Gross profit

 

$

54,408

 

$

49,089

 

$

73,962

 

 

 

 

 

 

 

 

 

Adjustments to reconcile GAAP to Non-GAAP gross profit:

 

 

 

 

 

 

 

Accelerated depreciation

 

 

551

 

 

Non-GAAP gross profit

 

$

54,408

 

$

49,640

 

$

73,962

 

Non-GAAP gross profit-percentage

 

24.3

%

22.2

%

29.8

%

 

Reconciliation of GAAP to Non-GAAP Operating Loss:

 

 

 

Three Months Ended

 

 

 

March 24,
2013

 

December 23,
2012

 

March 25,
2012

 

GAAP Operating loss

 

$

(20,031

)

$

(34,740

)

$

(7,101

)

 

 

 

 

 

 

 

 

Adjustments to reconcile GAAP to Non-GAAP operating loss:

 

 

 

 

 

 

 

Accelerated depreciation

 

 

551

 

 

Amortization of acquisition-related intangible assets

 

1,663

 

1,680

 

2,097

 

Asset impairment, restructuring and other charges

 

880

 

4,941

 

 

Gain on disposition of property

 

 

 

(5,410

)

Non-GAAP operating loss

 

$

(17,488

)

$

(27,568

)

$

(10,414

)

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

NON-GAAP RESULTS

 

(In thousands, except per share and gross profit-percentage data)

 

Reconciliation of GAAP to Non-GAAP Net Loss:

 

 

 

Three Months Ended

 

 

 

March 24,
2013

 

December
23,

2012

 

March 25,
2012

 

GAAP Net loss

 

$

(21,245

)

$

(32,722

)

$

(2,490

)

 

 

 

 

 

 

 

 

Adjustments to reconcile GAAP to Non-GAAP net loss:

 

 

 

 

 

 

 

Accelerated depreciation

 

 

551

 

 

Amortization of acquisition-related intangible assets

 

1,663

 

1,680

 

2,097

 

Asset impairment, restructuring and other charges

 

880

 

4,941

 

 

Gain on disposition of property

 

 

 

(5,410

)

Tax (benefit) expense of discrete items and other tax adjustments

 

(1,127

)

(4,739

)

(9,128

)

Non-GAAP net income (loss)

 

$

(19,828

)

$

(30,289

)

$

(14,931

)

 

 

 

 

 

 

 

 

GAAP net income (loss) per common share — basic (1)

 

$

(0.31

)

$

(0.47

)

$

(0.04

)

Non-GAAP adjustments per above

 

0.02

 

0.03

 

(0.18

)

Non-GAAP net income (loss) per common share—basic (1)

 

$

(0.29

)

$

(0.44

)

$

(0.22

)

 

 

 

 

 

 

 

 

GAAP net income (loss) per common share — diluted (1)

 

$

(0.31

)

$

(0.47

)

$

(0.04

)

Non-GAAP adjustments per above

 

0.02

 

0.03

 

(0.18

)

Non-GAAP net income (loss) per common share—diluted (1)

 

$

(0.29

)

$

(0.44

)

$

(0.22

)

 

 

 

 

 

 

 

 

Average common shares outstanding—basic

 

69,273

 

69,144

 

69,104

 

Average common shares and potentially dilutive securities outstanding—diluted

 

69,273

 

69,144

 

69,104

 

 


(1)         GAAP net income (loss) per common share is computed using the two-class method as required by accounting rules.  We do not pay dividends; however, to properly calculate non-GAAP net income (loss) per common share, non-GAAP net income must be allocated to unvested restricted stock units (“RSUs”) on which we could pay dividend equivalents.  The amount of non-GAAP net income allocated to these RSUs is excluded from income available to common shareholders in the calculation of earnings per share.  As we were in a net loss for the three months ended March 24, 2013, December 23, 2012, and March 25, 2012, we did not have any non-GAAP income to allocate to unvested RSUs on which we could pay dividend equivalents.

 



 

We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance. These supplemental measures exclude, among other things, accelerated depreciation, inventory write-offs related to fab closures, severance, impairment of goodwill, charges related to the amortization of acquisition-related intangible assets, the impact of asset impairment, restructuring and other charges. We also exclude tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability in addition to tax adjustments related to non-GAAP operating income (loss) adjustments.

 

We use non-GAAP measures to evaluate the performance of our core businesses and to estimate future core performance. Since we find these measures to be useful, we believe that investors will benefit from seeing non-GAAP measures in addition to seeing our GAAP results. This information facilitates our internal comparisons to our historical operating results as well as to the operating results of our competitors.

 

Our management recognizes that items such as amortization of intangibles and asset impairment, restructuring and other charges can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of non-GAAP adjustments, investors should understand that the excluded items can be expenses and charges that impact the Company’s total cash balance. To gain a complete picture of all effects on the Company’s profit and loss from any and all events, management does (and investors should) consider only the GAAP income statement and the other financial measures. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit an important one, of the Company’s performance, and should not be relied upon by investors.

 

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different (and contain different inclusions and exclusions as compared to GAAP information) from the non-GAAP information provided by other companies and therefore are not being provided for the purpose of comparisons with other companies.

 

# # #

 

Company contact:

Investors

Chris Toth

310.252.7731

 

Media

Sian Cummins

310.252.7148