-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jex1+zSynIn85tjOWaH1n5ZTRxHMpwzcVVCRJRjBnBscLQPcMv3wCLzasNf3mM8p b0DgOVE17zJCJqpvwjw9yQ== 0000730000-00-000001.txt : 20000209 0000730000-00-000001.hdr.sgml : 20000209 ACCESSION NUMBER: 0000730000-00-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERTEX INC CENTRAL INDEX KEY: 0000730000 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 942328535 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12718 FILM NUMBER: 527563 BUSINESS ADDRESS: STREET 1: 1235 BORDEAUX DR CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4087440100 MAIL ADDRESS: STREET 1: 1235 BORDEAUX DR CITY: SUNNYVALE STATE: CA ZIP: 94089 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) (x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended December 31, 1999 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 (No Fee Required) Commission File No. 0-12718 SUPERTEX, INC. (Exact name of Registrant as specified in its Charter) California 94-2328535 (State or other jurisdiction (IRS Employer Identification #) of incorporation or organization) 1235 Bordeaux Drive Sunnyvale, California 94089 (Address of principal executive offices) Registrant's Telephone Number, Including Area Code: (408) 744-0100 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No As of February 1, 2000, 12,224,684 shares of the Registrant's common stock were issued and outstanding. Total number of pages: 10 SUPERTEX, INC. QUARTERLY REPORT - FORM 10Q Table of Contents Page No. PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Income.............. 3 Consolidated Balance Sheets.................... 4 Consolidated Statements of Cash Flows.......... 5 Notes to Consolidated Financial Statements..... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................. 8 PART II- OTHER INFORMATION Item 6. Exhibits, Financial Statement Schedule and Reports on Form 8-K ........................................ 10 PART I - FINANCIAL INFORMATION Item 1. Financial Statements SUPERTEX, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)
Three-months Ended, Nine-months Ended, December 31, December 31, 1999 1998 1999 1998 ---- ---- ---- ---- Net sales $ 17,709 $ 12,017 $ 50,743 $ 37,668 Cost and expenses: Cost of sales 11,065 6,565 32,531 19,980 Research and development 1,583 1,483 6,143 4,462 Selling, general and administrative 1,939 1,522 5,044 4,999 ------ ----- ------ ------ Total costs and expenses 14,587 9,570 43,718 29,441 ------ ----- ------ ------ Income from operations 3,122 2,447 7,025 8,227 Interest income 467 625 1,242 1,579 Other income (expense), net 59 (26) (65) (69) Income before provision for income taxes 3,648 3,046 8,202 9,737 Provision for income taxes 1,204 842 2,707 3,116 Net income $ 2,444 $ 2,204 $ 5,495 $ 6,621 Net income per share: Basic $ 0.20 $ 0.18 $ 0.45 $ 0.55 Diluted $ 0.20 $ 0.18 $ 0.44 $ 0.54 Shares used in per share computation: Basic 12,121 12,055 12,104 12,073 Diluted 12,496 12,233 12,394 12,271 See accompanying Notes to Unaudited Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED BALANCE SHEETS (unaudited, in thousand)
Dec. 31, 1999 Mar. 31, 1999 ASSETS Current assets: Cash and cash equivalents $ 11,140 $ 28,190 Short-term investments 21,908 1,366 Trade accounts receivable, net of allowances of $1,146 and $1,020 13,258 10,860 Other receivables 916 657 Inventories 14,034 11,330 Deferred income taxes 1,862 1,862 Prepaid expenses 541 453 ------- ------- Total current assets 63,659 54,718 Property, plant and equipment, net 15,751 15,946 Intangibles assets, net 1,333 2,072 Deferred income taxes 1,853 1,853 ------- ------- TOTAL ASSETS $ 82,596 $ 74,589 ======= ======= LIABILITIES Current liabilities: Trade accounts payable $ 8,565 $ 6,835 Accrued salaries, wages and employee benefits 3,612 3,162 Income taxes payable 757 -- Other accrued liabilities 366 714 Deferred income on shipments to distributors 1,103 1,198 ------- ------- Total current liabilities 14,403 11,909 ------- ------- SHAREHOLDERS' EQUITY Preferred stock, no par value - 10,000 shares authorized, none outstanding -- -- Common stock, no par value - 30,000 shares authorized; issued and outstanding 12,132 and 12,099 shares 21,460 20,895 Accumulated other comprehensive income 619 356 Retained earnings 46,114 41,429 ------- ------- Total shareholders' equity 68,193 62,680 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 82,596 $ 74,589 See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands) Nine Months Ended Dec. 31, 1999 Dec. 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 5,495 $ 6,621 Non-cash adjustments to net income: Depreciation and amortization 4,320 2,608 Provision for doubtful accounts and sales returns 1,932 1,652 Provision for excess and obsolete inventories 866 (33) Changes in operating assets and liabilities: Accounts and other receivables (4,589) (1,163) Inventories (3,570) 367 Prepaid expenses (88) 12 Trade accounts payable and accrued expenses 1,832 (346) Income taxes payable 757 (290) Deferred revenue on shipments to distributors (95) (439) -------- -------- Total adjustments 1,365 2,368 -------- -------- Net cash provided by operating activities 6,860 8,989 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (3,386) (1,373) Purchases of short term investments (43,536) (41,096) Proceeds from maturities of short term investments 23,255 27,344 -------- -------- Net cash used in investing activities (23,667) (15,125) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 723 136 Repurchase of stock (966) (563) -------- -------- Net cash used in financing activities (243) (427) -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (17,050) (6,563) CASH AND CASH EQUIVALENTS: Beginning of period 28,190 24,556 -------- -------- End of period $ 11,140 $ 17,993 ======== ======== See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 In the opinion of management, the unaudited financial statements for the three and nine months ended December 31, 1999 and 1998 include all adjustments (consisting of normal recurring adjustments) necessary for fair presentation of financial condition and results of operations for those periods in accordance with generally accepted accounting principles. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the audited financial statements of Supertex, Inc. for the fiscal year ended March 31, 1999, which were included in the Annual Report on Form 10-K (File Number 0-12718). Interim results are not necessarily indicative of results for the full fiscal year. Note 2 Inventories consisted of (in thousands):
December 31, 1999 March 31, 1999 Finished goods......................... $ 3,466 $ 3,534 Work-in-process........................ 9,807 7,099 Raw materials.......................... 761 697 -------- -------- $ 14,034 $ 11,330 ======== ========
Note 3 Net Income per Share: Basic earnings per share ("EPS") is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. A reconciliation of the numerator and denominator of basic and diluted earnings per share is provided as follows (in thousands, except per share amounts). For Three-months Ended, For Nine-months Ended, December 31, December 31, 1999 1998 1999 1998
BASIC: Net income $ 2,444 $ 2,204 $ 5,495 $ 6,621 -------- -------- -------- -------- Weighted average shares outstanding for the period 12,121 12,055 12,104 12,073 ======== ======== ======== ======== Net income per share $ 0.20 $ 0.18 $ 0.45 $ 0.55 ======== ======== ======== ======== DILUTED: Net income $ 2,444 $ 2,204 $ 5,495 $ 6,621 -------- -------- -------- -------- Weighted average shares outstanding for the period 12,121 12,055 12,104 12,073 Dilutive effect of stock options 375 178 290 198 -------- -------- -------- -------- Total 12,496 12,233 12,394 12,271 -------- -------- -------- -------- Net income per share $ 0.20 $ 0.18 $ 0.44 $ 0.54 ======== ======== ======== ========
Note 4 Comprehensive Income: The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130, ("SFAS No.130"), "Reporting Comprehensive Income". SFAS No. 130 establishes rules for the reporting and display of comprehensive income and its components; however, the adoption of this Statement had no impact on the Company's net income or stockholders' equity. The following are the components of comprehensive income (in thousands): Three-months Ended Nine-months Ended December 31, December 31, 1999 1998 1999 1998
Net income $2,444 $2,204 $5,495 $6,621 Unrealized gain on short term investment 164 75 261 178 ------ ------ ------ ------ Comprehensive income $2,608 $2,279 $5,756 $6,799 ====== ====== ====== ======
The components of accumulated other comprehensive income are as follows (in thousand): December 31, 1999 March 31, 1999 Unrealized gain on short term investment $619 $356 Note 5 Recent Accounting Pronouncements: In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), 'Revenue Recognition in Financial Statements.' SAB 101 provides guidance for revenue recognition under certain circumstances. The Company is currently evaluating the impact of SAB 101 on its financial statements and related disclosures. The accounting and disclosures prescribed by SAB 101 will be effective for the Company's fiscal year ended April 1, 2000. In June 1998, the FASB issued Statement of Financial Accounting Standards No. 133, ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes new standards of accounting and reporting for derivative instruments and hedging activities. SFAS No. 133 requires that all derivatives be recognized at fair value in the statement of financial position and that the corresponding gains or losses be reported either in the statement of operations or as a component of comprehensive income, depending on the type of hedging relationship that exists. SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. Earlier application is allowed as of the beginning of any quarter beginning after issuance. The Company does not anticipate that the adoption of SFAS No. 133 will have a material impact on its financial position or results of operations. PART I - FINANCIAL INFORMATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Certain Factors: This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934. Actual future results could differ materially from those discussed here and elsewhere in this report. Factors that could affect future results include general economic conditions, both in the United States and foreign markets, economic conditions specific to the semiconductor industry, risks associated with customer concentration, the successful integration of our two wafer fabrication facilities, the Company's ability to introduce new products, its ability to enhance existing products, its ability to meet the continually changing requirements of its customers, its ability to manufacture efficiently, its ability to control costs, and its ability to maintain and enhance relationships with its assembly and test subcontractors and independent distributors and sales representatives. Results of Operations Net Sales: Net sales for the quarter ended December 31, 1999 were $17,709,000, a 47% increase compared to $12,017,000 of the same quarter last year. For the nine months ended December 31, 1999, net sales were $50,743,000 compared to $37,668,000 for the same period of the prior year, a 35% increase. The increases in sales for the three- and nine- months are primarily due to the addition of the foundry business resulting from the acquisition of the submicron wafer fabrication facility (fab) on February 1, 1999, as well as the increases in the core products, led by the imaging and medical electronics products. Approximately 39% of the Company's net sales for third fiscal quarter and 36% for the nine month period were derived from international customers as compared to 55% for the comparable periods in the prior year. The drop in percentage of international sales is primarily due to the addition of foundry service sales, as a result of the submicron fab acquisition because all foundry service customers are in the U.S.. All of the Company's international sales were denominated in U.S.dollars. Gross Profit: As a percent of sales, the Company's gross margin for the three- and nine- month periods ended December 31, 1999 was 38% and 36% respectively, compared with 45% and 47% for the same periods of the prior year. The gross profit was adversely affected by the extra overhead of operating two fabs, the old four-inch fab and the new six-inch fab acquired on February 1, 1999, including the accelerated depreciation of the capitalized assets of the new fab. Research and Development: Research and development expenses increased 7% to $1,583,000 for the quarter ended December 31, 1999 as compared to $1,483,000 for the same quarter of the prior year. The increase in research and development expenditures is primarily due to the development of new mask sets for the transfer of core products from the old fab to the new fab. For the nine months ended December 31, 1999, research and development increased 38% to $6,143,000 compared to $4,462,000 for the same period of the prior year. The increase is primarily due to a non-recurring payment of $1,350,000 to Orbit Semiconductor, Inc. under a process development agreement for assisting Supertex to accelerate the process transfer to the new fab. Selling, General and Administrative: Expenses for selling, general and administrative were $1,939,000 or 11% of net sales for the quarter ended December 31, 1999 as compared with $1,522,000 or 13% of net sales in the same quarter of the prior year. For nine months ended December 31, 1999, selling, general and administrative expenses were $5,044,000 or 10% of net sales compared to $4,999,000 or 13% for the same period of the prior year. The dollar increases in selling, general and administrative expenses for the three months were primarily due to increase in sales commission and bad debt reserve corresponding to higher net sales. Interest and Other Income: Interest and other income, net for the three- and nine- month periods ended December 31, 1999 was $526,000 and $1,177,000, respectively as compared to $599,000 and $1,510,000 for the same periods of the prior year. The decreases were primarily due to the use of cash for the purchase of the new fab. Provision for Income Taxes: The Company's effective tax rate for the three- and nine- months ended December 31, 1999 were both 33% compared to 28% and 32% respectively for the same periods of the prior year. Overview: Total assets grew to $82,596,000 as of December 31, 1999, up from $74,589,000 from the end of last fiscal year ended March 31, 1999. The increase is due to favorable operating results. Liquidity and Capital Resources: On December 31, 1999, the Company had $33,048,000 in cash, cash equivalents, and short-term investments, compared with $29,556,000 on March 31, 1999. This increase is mostly due to positive cash flow from operating activities of $6,860,000 consisting principally of net income of $5,495,000. $3,386,000 was used over the nine months in the purchase of equipment primarily to add test capacity. Net cash used in financing activities was $243,000 (Repurchase of Company stocks accounted for $966,000, which was offset by proceeds from stock option exercises of $723,000). The Company anticipates that available funds and expected cash to be generated from operations will be sufficient to meet cash and working capital requirements through the end of the fiscal year 2000. Year 2000 Issues. Background: For over two years the Company has been aware of the issues associated with the programming code in existing computer systems and software products as the millennium (Year 2000) approaches. The "Year 2000" or "Y2K" problem is pervasive and complex, as virtually every computer operation will be affected in the same way by the rollover of the two digit year value to 00. The issue is whether computer systems will properly recognize date-sensitive information when the year changes to 2000. Systems that do not properly recognize such information could generate erroneous data or could cause them to fail. As a result, many Companies' software, computer systems and other equipment may need to be reprogrammed or replaced in order to comply with such "Y2K" requirements. Progress Report: The Company is pleased to confirm that no incident has been reported in relation to the Y2K compliance. All systems, as planned, have been working and are still working even though contingency plans have been in place at the change of the millennium as a precautionary measure in case any problem would occur as a result of Y2K. As part of the Company's post millennium program, all systems' operational functions are closely monitored with strong emphasis placed on other critical dates such as February 29, 2000. A smooth transition into March 2000 is anticipated. The Company remains confident that it has and will continue to service its customers without interruption. It must be stressed that Supertex, Inc.'s products are not date sensitive. As part of the year Y2K readiness program, the Company identified its primary vendors, service providers and customers that are believed to be critical to its business operations. Steps were taken to reasonably ascertain their Y2K readiness through questionnaires, interviews and other available means. To date there has not been any supplier related Y2K issues. The Company will continue to monitor its suppliers to assure that there will be noY2K related problem in their product delivery. The Company's Y2K readiness program will continue to be an ongoing process to ward off any potential material impact on the Company and its operations. Supertex, Inc. started its Y2K readiness program over two years ago and has expended the necessary amount of time and resources to assure its customers that there would not be any adverse effect with its Y2K compliance. PART II - OTHER INFORMATION Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule SIGNATURE 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 thereunto duly authorized. SUPERTEX, INC. (Registrant) Date: February 12, 2000 By: /s/ Henry C. Pao -------------------- Henry C. Pao, Ph.D. President (Principal Executive and Financial Officer) EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE FOR THIRD FISCAL QTR. 10-Q
5 1,000 9-MOS APR-1-2000 DEC-31-1999 11,140 21,908 14,404 1,146 14,034 63,659 37,606 21,855 82,596 14,403 0 0 0 21,460 46,733 82,596 50,743 50,743 32,531 43,718 0 0 0 8,202 2,707 5,495 0 0 0 5,495 0.45 0.44
-----END PRIVACY-ENHANCED MESSAGE-----