0001104659-14-032659.txt : 20140430 0001104659-14-032659.hdr.sgml : 20140430 20140430161543 ACCESSION NUMBER: 0001104659-14-032659 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20140430 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140430 DATE AS OF CHANGE: 20140430 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: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07935 FILM NUMBER: 14798924 BUSINESS ADDRESS: STREET 1: 233 KANSAS ST CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3107268000 8-K 1 a14-11533_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 30, 2014

 

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 30, 2014, International Rectifier Corporation (the “Company”) issued a press release announcing its financial results for the third fiscal quarter of fiscal year 2014.  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 7.01. Regulation FD Disclosure

 

The information in this Item 7.01 of this Report on Form 8-K, 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 30, 2014, reporting financial results for the third fiscal quarter of fiscal year 2014.

 

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 30, 2014

INTERNATIONAL RECTIFIER CORPORATION

 

 

 

By:

/s/ Ilan Daskal

 

 

Name:  Ilan Daskal

 

 

Title:    Chief Financial Officer

 

2



 

EXHIBIT INDEX

 

Exhibit Number

 

Description

99.1

 

Press release of International Rectifier Corporation, dated April 30, 2014, reporting financial results for the third fiscal quarter of fiscal year 2014.

 

3


EX-99.1 2 a14-11533_1ex99d1.htm EX-99.1

Exhibit 99.1

 

International Rectifier Reports Third Quarter Fiscal Year 2014 Results

 

EL SEGUNDO, Calif.—(BUSINESS WIRE)—April 30, 2014— International Rectifier Corporation (NYSE:IRF) today announced financial results for the third quarter (ended March 30, 2014) of its fiscal year 2014.  Revenue was $269.3 million, about flat compared to $270.0 million in the prior quarter and a 20.1% increase from $224.3 million in the prior year quarter.  GAAP net income for the third quarter was $19.1 million, or $0.26 per fully diluted share compared to GAAP net income of $17.9 million, or $0.25 per fully diluted share, in the prior quarter and GAAP net loss of $21.2 million, or $0.31 per fully diluted share in the prior year quarter.

 

“We had a solid start in 2014 as the momentum we experienced at the end of 2013 continued through the March quarter, stated President and Chief Executive Officer Oleg Khaykin.  “In particular, we saw significant strength in the industrial and automotive end markets in Europe.”

 

GAAP gross margin for the third quarter was 37.2% compared to 36.3% in the prior quarter and 24.3% in the prior year quarter.  GAAP operating income for the third quarter was $19.2 million compared to GAAP operating income of $17.8 million in the prior quarter and a GAAP operating loss of $20.0 million in the prior year quarter.

 

Cash, cash equivalents and marketable investments increased $37.8 million during the third quarter and totaled $542.7 million at the end of the third quarter, including restricted cash of $1.4 million.

 

Cash provided by operating activities for the quarter was $51.6 million and free cash flow was $38.4 million for the quarter.

 

Non-GAAP Results

 

Non-GAAP net income for the third quarter was $19.7 million, or $0.27 per fully diluted share compared to non-GAAP net income of $13.4 million, or $0.19 per fully diluted share in the prior quarter and non-GAAP net loss of $19.8 million, or $0.29 per fully diluted share in the prior year quarter.

 

Non-GAAP gross margin for the third quarter was 36.3% compared to non-GAAP gross margin of 36.5% in the prior quarter and non-GAAP gross margin of 24.3% in the prior year quarter.  Non-GAAP operating income for the third quarter was $20.1 million, or 7.5% of revenue, compared to non-GAAP operating income of $21.1 million in the prior quarter and non-GAAP operating loss of $17.5 million in the prior year quarter.

 

The non-GAAP results the Company provides exclude the effects of accelerated depreciation, a product claim reserve release,  restructuring costs, 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 (referred to as gross profit in attached schedules) and operating income (loss) in accordance with U.S. GAAP are set forth in the attached schedules below.

 



 

June Quarter Outlook

 

Mr. Khaykin noted: “Looking ahead to the June quarter, we expect to see continued improvement in our business driven by growth in our industrial and appliance end markets and a seasonal pick up in our computing and consumer end markets.  As a result, we currently expect revenue for the June quarter to range between $280 million to $295 million.

 

We remain optimistic for the remainder of 2014 as we continue to see an improving macro environment.  We are also seeing strong momentum behind our specific growth drivers such as digital power management systems, automotive applications and high power industrial and appliance modules.”

 

The following table outlines International Rectifier’s current June quarter outlook on a GAAP basis and a non-GAAP basis, based on certain anticipated excluded items:

 

 

 

GAAP

 

Excluded Items

 

Non-GAAP

 

Revenue

 

$280 to $295 million

 

 

 

$280 to $295 million

 

 

 

 

 

 

 

 

 

Gross margin

 

35.8% to 36.3%

 

0.2% for accelerated depreciation

 

36% to 36.5%

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research & development expense

 

about $33 million

 

 

 

about $33 million

 

 

 

 

 

 

 

 

 

Sales general & administrative expense

 

$45 to $46 million

 

 

 

$45 to $46 million

 

 

 

 

 

 

 

 

 

Asset impairment, restructuring and other charges

 

$1 to $1.5 million

 

$1 to $1.5 million

 

 

 

 

 

 

 

 

 

 

 

Amortization of acquisition related intangibles

 

$1.6 million

 

$1.6 million

 

 

 

 

 

 

 

 

 

 

 

Other Expense, net

 

$1 million

 

 

 

$1 million

 

 

 

 

 

 

 

 

 

Tax

 

about $3.5 million Expense

 

about $0.5 million due to net tax effects

 

about $4 million Expense

 

 

Segment Table Information/Customer Segments

 

The business segment tables included with this release for the Company’s fiscal quarters ended March 30, 2014, December 29, 2013, and March 24, 2013, 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 2014 fiscal year with the Securities and Exchange Commission on Thursday, May 1, 2014. 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 identification number: 35876842.  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 recorded replay of this call will be available from approximately 6:00 p.m. Pacific time on Wednesday, April 30 through Wednesday, May 7, 2014. To listen to the replay by phone, call 855-859-2056 or 404-537-3406 for international callers and enter the conference identification number 35876831. 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; 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; delays in implementing our production ramp-up of our wafer thinning manufacturing facility in Singapore; the effects of longer lead times for certain products on meeting demand and any inability by us to timely satisfy customer demand; the effects of manufacturing quality issues and customer claims; the adverse impact of regulatory, investigative and legal actions, among them, current and potential future U.S. economic sanctions; 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, and capacity restrictions imposed by our vendors; 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; volatility or deterioration of capital markets; 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 Form 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 30, 2014

 

December 29,
2013

 

March 24, 2013

 

Revenues

 

$

269,269

 

$

269,965

 

$

224,268

 

Cost of sales

 

169,135

 

172,000

 

169,860

 

Gross profit

 

100,134

 

97,965

 

54,408

 

Selling, general and administrative expense

 

45,025

 

44,727

 

43,020

 

Research and development expense

 

32,710

 

32,786

 

28,876

 

Amortization of acquisition-related intangible assets

 

1,605

 

1,630

 

1,663

 

Asset impairment, restructuring and other charges

 

1,624

 

1,015

 

880

 

Operating income (loss)

 

19,170

 

17,807

 

(20,031

)

Other expense (income), net

 

451

 

1,510

 

(450

)

Interest expense, net

 

28

 

7

 

64

 

Income (loss) before income taxes

 

18,691

 

16,290

 

(19,645

)

Provision (benefit) for income taxes

 

(449

)

(1,631

)

1,600

 

Net income (loss)

 

$

19,140

 

$

17,921

 

$

(21,245

)

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

Basic

 

$

0.27

 

$

0.25

 

$

(0.31

)

Diluted

 

$

0.26

 

$

0.25

 

$

(0.31

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

Basic

 

71,248

 

71,147

 

69,273

 

Diluted

 

72,728

 

72,163

 

69,273

 

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

 

(In thousands)

 

 

 

March 30, 2014

 

December 29, 2013

 

March 24, 2013

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

541,288

 

$

498,487

 

$

386,994

 

Restricted cash

 

637

 

635

 

613

 

Short-term investments

 

 

5,001

 

15,058

 

Trade accounts receivable, net of allowances

 

158,799

 

156,730

 

134,987

 

Inventories

 

241,982

 

247,740

 

231,703

 

Current deferred tax assets

 

4,974

 

4,946

 

5,040

 

Prepaid expenses and other current assets

 

31,359

 

34,222

 

35,529

 

Total current assets

 

979,039

 

947,761

 

809,924

 

Restricted cash

 

740

 

739

 

738

 

Property, plant and equipment, net

 

404,113

 

412,277

 

432,635

 

Goodwill

 

52,149

 

52,149

 

52,149

 

Acquisition-related intangible assets, net

 

17,058

 

18,663

 

23,553

 

Long-term deferred tax assets

 

29,366

 

29,108

 

34,775

 

Other assets

 

63,175

 

65,135

 

58,160

 

Total assets

 

$

1,545,640

 

$

1,525,832

 

$

1,411,934

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

80,112

 

$

86,403

 

$

64,565

 

Accrued income taxes

 

4,112

 

4,361

 

470

 

Accrued salaries, wages and commissions

 

40,713

 

37,764

 

34,721

 

Other accrued expenses

 

77,189

 

80,063

 

77,211

 

Total current liabilities

 

202,126

 

208,591

 

176,967

 

Long-term deferred tax liabilities

 

8,695

 

9,723

 

4,479

 

Other long-term liabilities

 

18,321

 

16,876

 

25,882

 

Total liabilities

 

229,142

 

235,190

 

207,328

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock

 

77,559

 

77,426

 

75,609

 

Capital contributed in excess of par value

 

1,098,376

 

1,090,231

 

1,056,515

 

Treasury stock, at cost

 

(115,773

)

(113,175

)

(113,175

)

Retained earnings

 

247,649

 

228,509

 

207,943

 

Accumulated other comprehensive income (loss)

 

8,687

 

7,651

 

(22,286

)

Total stockholders’ equity

 

1,316,498

 

1,290,642

 

1,204,606

 

Total liabilities and stockholders’ equity

 

$

1,545,640

 

$

1,525,832

 

$

1,411,934

 

 



 

INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In thousands)

 

 

 

Three Months Ended

 

 

 

March 30, 2014

 

December 29,
2013

 

March 24, 2013

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

 

$

19,140

 

$

17,921

 

$

(21,245

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

21,850

 

21,470

 

22,787

 

Amortization of acquisition-related intangible assets

 

1,605

 

1,630

 

1,663

 

Loss on disposal of fixed assets

 

110

 

55

 

234

 

Impairment of long-lived assets

 

 

 

415

 

Stock compensation expense

 

6,538

 

6,627

 

5,297

 

Other-than-temporary impairment of investments

 

 

 

350

 

Recovery of bad debts

 

 

 

(64

)

Provision for inventory write-downs

 

2,692

 

(680

)

3,884

 

Loss (gain) on derivatives

 

174

 

625

 

(1,952

)

Deferred income taxes

 

(1,020

)

1,949

 

31

 

Changes in operating assets and liabilities, net

 

1,192

 

(16,878

)

17,781

 

Other

 

(713

)

694

 

3,986

 

Net cash provided by operating activities

 

51,568

 

33,413

 

33,167

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

(13,204

)

(10,714

)

(12,884

)

Maturities of investments

 

5,000

 

5,000

 

 

Release from restricted cash

 

2

 

4

 

187

 

Net cash used in investing activities

 

(8,202

)

(5,710

)

(12,697

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

1,741

 

1,925

 

3,355

 

Purchase of treasury stock

 

(2,598

)

 

 

Net settlement of restricted stock units for tax withholdings

 

 

(71

)

(467

)

Net cash provided by (used in) financing activities

 

(857

)

1,854

 

2,888

 

Effect of exchange rate changes on cash and cash equivalents

 

292

 

810

 

(3,020

)

Net increase in cash and cash equivalents

 

42,801

 

30,367

 

20,338

 

Cash and cash equivalents, beginning of period

 

498,487

 

468,120

 

366,656

 

Cash and cash equivalents, end of period

 

$

541,288

 

$

498,487

 

$

386,994

 

 



 

For the three months ended March 30, 2014, December 29, 2013, and March 24, 2013, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):

 

 

 

Three Months Ended

 

 

 

March 30, 2014

 

December 29, 2013

 

March 24, 2013

 

Business Segment

 

Revenues

 

Percentage 
of Total

 

Gross
Margin

 

Revenues

 

Percentage
of Total

 

Gross
Margin

 

Revenues

 

Percentage
of Total

 

Gross
Margin

 

Power management devices

 

$

96,868

 

36.0

%

30.9

%

$

102,878

 

38.1

%

30.0

%

$

85,209

 

38.0

%

21.0

%

Energy saving products

 

53,808

 

20.0

 

33.7

 

46,589

 

17.3

 

31.5

 

43,614

 

19.4

 

12.2

 

Automotive products

 

37,901

 

14.1

 

28.4

 

36,364

 

13.5

 

31.2

 

31,107

 

13.9

 

22.0

 

Enterprise power

 

32,057

 

11.9

 

45.3

 

33,195

 

12.3

 

42.4

 

20,488

 

9.1

 

36.1

 

HiRel

 

48,323

 

17.9

 

54.9

 

50,665

 

18.8

 

52.6

 

43,554

 

19.4

 

38.4

 

Customer segments total

 

268,957

 

99.9

 

37.1

 

269,691

 

99.9

 

36.2

 

223,972

 

99.9

 

24.2

 

Intellectual property

 

312

 

0.1

 

100.0

 

274

 

0.1

 

100.0

 

296

 

0.1

 

100.0

 

Consolidated total

 

$

269,269

 

100.0

%

37.2

%

$

269,965

 

100.0

%

36.3

%

$

224,268

 

100.0

%

24.3

%

 

For the three months ended March 30, 2014, December 29, 2013, and March 24, 2013, stock-based compensation was as follows (in thousands):

 

 

 

Three Months Ended

 

 

 

March 30, 2014

 

December 29, 2013

 

March 24, 2013

 

Cost of sales

 

$

1,330

 

$

1,362

 

$

1,021

 

Selling, general and administrative expense

 

3,233

 

3,123

 

2,693

 

Research and development expense

 

1,975

 

2,142

 

1,583

 

Total stock-based compensation expense

 

$

6,538

 

$

6,627

 

$

5,297

 

 



 

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 30, 2014

 

December 29,
2013

 

March 24, 2013

 

GAAP Gross profit

 

$

100,134

 

$

97,965

 

$

54,408

 

Adjustments to reconcile GAAP to Non-GAAP gross profit:

 

 

 

 

 

 

 

Accelerated depreciation

 

507

 

639

 

 

Product claim reserve release

 

(2,790

)

 

 

Non-GAAP gross profit

 

$

97,851

 

$

98,604

 

$

54,408

 

Non-GAAP gross profit-percentage

 

36.3

%

36.5

%

24.3

%

 

Reconciliation of GAAP to Non-GAAP Operating Income (Loss):

 

 

 

Three Months Ended

 

 

 

March 30, 2014

 

December 29,
2013

 

March 24, 2013

 

GAAP Operating income (loss)

 

$

19,170

 

$

17,807

 

$

(20,031

)

Adjustments to reconcile GAAP to Non-GAAP operating income (loss):

 

 

 

 

 

 

 

Accelerated depreciation

 

507

 

639

 

 

Product claim reserve release

 

(2,790

)

 

 

Amortization of acquisition-related intangible assets

 

1,605

 

1,630

 

1,663

 

Asset impairment, restructuring and other charges

 

1,624

 

1,015

 

880

 

Non-GAAP operating income (loss)

 

$

20,116

 

$

21,091

 

$

(17,488

)

 



 

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 Income (Loss):

 

 

 

Three Months Ended

 

 

 

March 30,
2014

 

December 29,
2013

 

March 24,
2013

 

GAAP Net income (loss)

 

$

19,140

 

$

17,921

 

$

(21,245

)

Adjustments to reconcile GAAP to Non-GAAP net income (loss):

 

 

 

 

 

 

 

Accelerated depreciation

 

507

 

639

 

 

Product claim reserve release

 

(2,790

)

 

 

Amortization of acquisition-related intangible assets

 

1,605

 

1,630

 

1,663

 

Asset impairment, restructuring and other charges

 

1,624

 

1,015

 

880

 

Tax expense of discrete items and other tax adjustments

 

(373

)

(7,805

)

(1,127

)

Non-GAAP net income (loss)

 

$

19,713

 

$

13,400

 

$

(19,829

)

GAAP net income (loss) per common share — basic

 

$

0.27

 

$

0.25

 

$

(0.31

)

Non-GAAP adjustments per above

 

0.01

 

(0.06

)

0.02

 

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

 

$

0.28

 

$

0.19

 

$

(0.29

)

GAAP net income (loss) per common share — diluted

 

$

0.26

 

$

0.25

 

$

(0.31

)

Non-GAAP adjustments per above

 

0.01

 

(0.06

)

0.02

 

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

 

$

0.27

 

$

0.19

 

$

(0.29

)

Average common shares outstanding—basic

 

71,248

 

71,147

 

69,273

 

Average common shares and potentially dilutive securities outstanding—diluted

 

72,728

 

72,163

 

69,273

 

 

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, a product claim reserve release, 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