-----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, WFAR7SdLpag25/eS0bsnTGr6fGYmfzsIVQDZTzpWKcYBgzM74rVhNboqcgclLGty ACPtxo4PnNM9izhqwZ2WYw== /in/edgar/work/20000621/0000730000-00-000003/0000730000-00-000003.txt : 20000920 0000730000-00-000003.hdr.sgml : 20000920 ACCESSION NUMBER: 0000730000-00-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERTEX INC CENTRAL INDEX KEY: 0000730000 STANDARD INDUSTRIAL CLASSIFICATION: [3674 ] IRS NUMBER: 942328535 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-12718 FILM NUMBER: 657998 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-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (MARK ONE) (x) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the Fiscal Year Ended March 31, 2000 or ( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from _______ to ________ Commission File No. 0-12718 SUPERTEX, INC. (Exact name of Registrant as specified in its Charter) California 94-2328535 (State or other jurisdiction of (IRS Employer Identification No.) 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 ( ) The aggregate market value of the voting stock held by non- affiliates of the registrant as of May 15, 2000, was $287,513,000 based on the closing price reported for such date. Shares of common stock held by officers, directors and other persons who may be deemed "affiliates" of the Registrant have been excluded from this computation. This determination of affiliate status is not necessarily a conclusive determination for other purposes. The number of shares outstanding of the Registrant's common stock as of May 15, 2000, were 12,261,724. Documents Incorporated by Reference: Part III incorporates by reference portions of the Company's definitive proxy statement for the Annual Meeting of Shareholders to be held on August 18, 2000 (the "Proxy Statement"). Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Exhibit Index is on Page 32 Total number of pages is 34 (BLANK PAGE) SUPERTEX, INC. ANNUAL REPORT - FORM 10K Table of Contents Page No. PART I Item 1.Business............................................. 4 Item 2.Properties........................................... 8 Item 3.Legal Proceedings.................................... 9 Item 4.Submission of Matters to a Vote of Security Holders.. 9 PART II Item 5.Market for Registrant's Common Equity and Related Shareholder Matters.................................. 9 Item 6.Selected Consolidated Financial Data................. 9 Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations..................10 Item 7A.Quantitative and Qualitative Disclosure about Market Risk.................................................15 Item 8.Financial Statements and Supplementary Data..........15 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..................15 PART III Item 10.Directors and Executive Officers of the Registrant..15 Item 11.Executive Compensation..............................16 Item 12.Security Ownership of Certain Beneficial Owners and Management..........................................16 Item 13.Certain Relationships and Related Transactions......16 PART IV Item 14.Exhibits, Financial Statement Schedule and Reports on Form 8-K.........................................16 Signatures...................................................17 PART I Item 1. Business Supertex, Inc. ("Supertex" or the "Company") is a technology-based producer of high voltage analog and mixed signal semiconductor components. It designs, develops, manufactures, and markets integrated circuits utilizing state-of-the-art high voltage DMOS, HVCMOS and HVBiCMOS analog and mixed signal technologies. With respect to its DMOS transistor products, the Company has maintained an established position in key products for telecommunication and automatic test equipment industries. Supertex has been an industry leader in high voltage integrated circuits (HVCMOS AND HVBiCMOS), which take advantage of the best features of CMOS, bipolar, and DMOS technologies and integrate them into the same chip. They are used by the flat panel display, printer, medical ultrasound imaging, telephone, telecommunications and instrumentation industries. The Company markets its products through direct sales personnel, independent sales representatives and distributors in the United States and abroad, primarily to electronic equipment manufacturers. The Company was incorporated in California in October 1975 and conducted an initial public offering of its Common Stock in December 1983. Its executive offices are located at 1235 Bordeaux Drive, Sunnyvale, California 94089, and its principal manufacturing facilities are located at 1225/1231 Bordeaux Drive, Sunnyvale, California 94089 and at 71 Vista Montana, San Jose, California 95134. Supertex also maintains four direct field offices located in: (1) New York; (2) Texas; (3) The United Kingdom; and (4) Germany. The telephone number of its headquarters is (408) 744- 0100. The Company's mailing address is 1235 Bordeaux Drive, P.O.Box 3607, Sunnyvale, California 94088-3607. Products Supertex offers semiconductor products that interface between the low voltage computer logic signal world and the high voltage requirements of the real analog world. Most of our products use mixed signal technologies. We supply standard and custom interface products primarily for the following three market groups: The Telecommunications Group consists of interface products used in telephone handsets, solid state relays, modems, fax, ISDN, networking, PABX, and PCMCIA cards, as well as diagnostic, curbside, set-top and central office equipment. In addition, they are used in military radio frequency and microwave communication applications. The Imaging Group consists of interface products for Flat Panel Displays and Non-impact Printers and Plotters. The flat panel display product family is sold to customers using Electro- Luminescent (EL), Plasma, Vacuum Fluorescent, Plasma- addressed LCD, Ferro-electric LCD, and Field Emission Display (FED) technologies. There is also a family of products for driving EL panels to back-light displays in hand-held instruments, such as cellular phones, PDAs, pagers, HPCs, and meters. The printer product family is used in ink-jet and electrostatic types of printers and plotters, which are mostly high end products, with full color capability, high resolution and high speed output. The Medical Electronics Group consists of products primarily for ultrasound diagnostic imaging equipment as well as selected portable instrumentation applications. Supertex has been a leading provider of products to these specific markets, therefore we have been able to work very closely with key customers to define new products by determining future market needs. Such close collaboration has produced a wide range of leading edge new products for Supertex and has allowed our customers to quickly develop new and more advanced products for their markets. In the DMOS transistor product line, Supertex focuses on certain niches such as very low threshold and low leakage devices which are most suitable for telecommunication, automatic test equipment, and hand-held applications where these features justify a premium. The DMOS transistor products also serve as predecessors to a fully integrated solution such as high voltage integrated circuits. Research and Development Supertex incurred expenses of $8,468,000, $7,195,000, and $5,582,000 on research and development activities during fiscal years 2000, 1999, and 1998, respectively. Research and development activities in fiscal 2000 continued at the rate of over thirty new product projects per year. We believe that our position as a leading supplier in our targeted markets can only be maintained through continuous investments in research and development. We focus our efforts on designing new products with existing process technologies while also developing new process technologies to be used for future products. We continuously strive to effectively monitor and control our research and development programs in order to obtain better performance and greater technological achievements at lower costs. Manufacturing Manufacturing operations include wafer fabrication, limited assembly and packaging, product testing, and quality control. We subcontract most of our standard component packaging and limited testing to independent assemblers, principally in Thailand, Malaysia, the Philippines, and Taiwan. A specialized assembly area is also maintained at our manufacturing facilities to package engineering prototypes, to ensure high priority deliveries, and to assemble high reliability circuits required in military and other high reliability applications. After assembly, packaged units are shipped back to our facility or to testing subcontractors for final product testing. Quality control is performed at our headquarters before shipment to customers. Although our off-shore assembly and test subcontractors have not experienced any serious work stoppages, the political situation in these countries could be volatile. Any prolonged work stoppage or other inability to assemble products would have a material adverse impact on our operating results although we have qualified assemblers in different countries to reduce risk. Furthermore, economic risks, such as changes in tariff or freight rates or interruptions in air transportation, could adversely affect our operating results. As a result of our acquisition on February 1, 1999 of the six inch wafer fabrication (fab) facility in San Jose, California from Orbit Semiconductor, a subsidiary of the DII Group, we believe that we are well-positioned to fulfill our wafer manufacturing capacity needs for the near future. Since the acquisition, we have ramped up the production volume of the new fab consisting of foundry wafers and correspondingly ramped down the production volume of our old fab. Our current goal is to complete the conversion before the end of the FY2001 at which time we may sell the equipment in the old fab and sublet the space. The availability of blank silicon wafers has improved considerably in the past years. Assembly packages and other raw materials we use in the manufacturing of our products are obtainable from several suppliers. Some of these materials were in short supply in prior years, but recently the supply of these materials appears to be plentiful and subject to competitive pricing pressure. However, any future shortage of supply would have a material adverse effect on our operating results. As is typical in the semiconductor industry, we must allow for lead times in ordering certain materials and services and often commit to volume purchases to obtain favorable pricing concessions and resource allocations. Environmental Laws Government regulations impose various environmental controls on the waste treatment and discharge of certain chemicals and gases after their use in semiconductor processing. We believe that our activities comply with present environmental regulations. However, increasing attention has been focused on the environmental impact of semiconductor manufacturing operations. While we have not experienced any material adverse effects on our business or financial results from our compliance with environmental regulations and installation of pollution control equipment, there can be no assurance that changes in such regulations will not necessitate our acquisition of costly equipment or other requirements in the future. We work closely with pollution experts from federal, state, and local agencies, especially from the cities of Sunnyvale and San Jose, California, to ensure that we are in compliance with present requirements. Sales We market our standard and custom products in the United States and abroad through our direct sales and marketing personnel in our headquarters, as well as through independent sales representatives and distributors supported by our field sales managers out of our sales offices in New York, Texas, the United Kingdom, and Germany. Export sales are made primarily through independent distributors to customers in Western Europe and the Far East, and represented 36%, 51%, and 53% of net sales in fiscal years 2000, 1999, and 1998, respectively. Exports to the Far East are largely to customers in Japan. Export sales are denominated only in U.S. dollars. Although export sales are subject to certain governmental commodity controls and restrictions for national security purposes, we have not had any material adverse effects on our business or financial results because of these limitations. In fiscal 2000, two customers Microtek and Dii Semiconductor accounted for 12% and 11% of net sales respectively. Sales to Microtek made up 16% and 19% of net sales for fiscal 1999 and 1998, respectively. We have no long-term production agreement with Microtek. Normal terms and conditions of sale apply, which include a 60-day notice of cancellation and charges for work-in-process for cancellations of less than 60 days from shipment. Outstanding accounts receivable from Microtek and Dii Semiconductor accounted for 10% and 17% of gross accounts receivable as of March 31, 2000, respectively. While we maintain a good relationship with Microtek, Inc. and Dii Semiconductor, a breakdown in that relationship could materially and adversely affect our business and financial results. Inventories are stated at the lower of cost (determined on a first- in, first-out basis) or market value. Our inventories include high technology parts and components that are specialized in nature or subject to rapid technological obsolescence. While we endeavor to minimize the required inventory on hand and consider technological obsolescence when estimating amounts required such estimates may be inaccurate and are subject to change. Revenue from direct sales to end-user customers is recognized upon shipment of products. Sales to distributors are made primarily under arrangements allowing limited price protection and the right of stock rotation on merchandise unsold by the distributors. Because of this uncertainty associated with pricing concessions and possible returns, we defer recognition of such sales and the related costs of sales until the merchandise is sold by distributors to their end-user customers. Material miscalculation in amounts reported by distributors could have a materially adverse effect on our business and financial results. Backlog Our backlog at March 31, 2000 was approximately $25,938,000, compared with $17,139,000 and $15,339,000 at March 31, 1999 and 1998, respectively. 1We expect that all of the current backlog will be shipped in fiscal 2001. Customers may cancel or reschedule orders without significant penalty, and the price of products may be adjusted between the time the purchase order is booked into backlog and the time the product is shipped to the customer. For those reasons, we believe that backlog is not meaningful in predicting our actual net revenue for any future period. Competition Because of our market niches, market statistics are not generally available for many of our products. Competition in general among manufacturers of semiconductor components and discrete transistors is intense. Many of our domestic and foreign competitors have larger facilities, financial, technical, and personnel resources, and more diverse product lines. Factors such as product prices, product performance, diversity of product lines, delivery capabilities, and the ability to adapt to rapid technological change to develop new and improved products are the principal methods of competition in the industry. We believe we are a leader in important segments of our product families where we have a technological and/or cost advantage and that we are generally competitive with respect to these factors. Patents and Licenses We hold numerous United States patents which will expire between 2000 to 2018 and we have applications for additional patents pending. Although we believe that our patents may have value, there can be no assurance that our patents or any additional patents that may be obtained in the future will provide meaningful protection from competition. We believe that our success depends primarily on the experience, creative skills, technical expertise, and marketing ability of our personnel rather than on the ownership of patents. Patents may, however, be useful for cross-license purposes and have served the Company well in the past. Supertex is not aware that any of its products infringe on any valid patent or other proprietary rights of third parties but it cannot be certain that they do not do so. If infringement is alleged, there can be no assurance that the necessary licenses could be obtained, or if obtained, would be on terms or conditions that would not have a material adverse effect on the Company. Employees At March 31, 2000, we had 399 full time employees. Many of our employees are highly skilled, and our continued growth and success will depend in part on our ability to attract and retain such employees. At times, we as well as other semiconductor manufacturers experience difficulty in hiring and retaining sufficient numbers of skilled personnel. We believe that the compensation, benefits, and incentives offered to our employees are competitive with those generally offered throughout the semiconductor industry. There are no collective bargaining agreements between us and our employees, and there has been no work stoppage due to labor difficulties. The Company considers its employee relations to be good. Executive Officers of the Company Name Position with the Company Age Officer Since - ---------------------------------------------------------------------------- Henry C. Pao President, Principal Executive 62 1976 and Financial Officer Richard E. Siegel Executive Vice President 54 1982 Benedict C. K. Choy Senior Vice President, Technology Development, and Secretary 54 1976 Dennis E. Kramer Vice President, Materials 58 1996 William Numann Vice President, Standard Products 43 1997 William P. Ingram Vice President, Wafer Fab Operations 52 1999 Franklin Gonzalez Vice President, Process Technology 49 1999 Michael Lee Vice President, I.C. Design 45 1999 Officers appointed by the Board of Directors serve at the discretion of the Board. There is no family relationship between any directors or executive officers of the Company except as stated below. Henry C. Pao is a founder of Supertex and has served as President, Principal Financial and Executive Officer, and as a Director since the Company's formation in fiscal 1976. Previously, he worked at Fairchild Semiconductor, Raytheon, Sperry Rand and IBM. He has B.S., M.S., and Ph.D. degrees in Electrical Engineering from University of Illinois at Champaign-Urbana. Dr. Pao is the son of Mr. Yunni Pao and the brother of Frank Pao, also Directors of the Company. Richard E. Siegel joined the Company in 1981 as National Sales Manager, was appointed Vice President of Sales and Marketing in April 1982, Senior Vice President in February 1988, and has served as Executive Vice President since November 1988. He has been a Director since 1988. Previously, he worked at Signetics Corporation, Fairchild Semiconductor, Ford Instrument and Grumman Aircraft Corporation. Mr. Siegel is also a member of the Board of Directors for All American Semiconductor (NASD: SEMI). All American Semiconductor, headquartered in Florida, is a national distributor of electronic components manufactured by others and is a major distributor for Supertex. Mr. Siegel has a B.S. degree in Mechanical Engineering from City College of New York, augmented with Electrical Engineering courses from Brooklyn Polytechnic Institute, New York. Benedict C. K. Choy, a founder of the Company, joined Supertex in fiscal 1976 as Vice President, Device Technology and Process Development, and has served as Senior Vice President since February 1988. He has been a Director since 1986. Previously, he worked at Fairchild Semiconductor, National Semiconductor, and Raytheon. He has a B.S. degree in Electrical Engineering from the University of California, Berkeley. Dennis E. Kramer joined Supertex in September 1981 as Wafer Fab II Production Manager. Over his tenure, he has managed many facets of the wafer fabrication process as well as all the back-end manufacturing operations. He was promoted to Vice President of Materials in 1996. Previously, he worked at Siemens and Signetics Corporation. He has a B.S. degree in Chemistry from University of California, Los Angeles and an MBA from Santa Clara University. William Numann joined Supertex in June 1997, as Vice-President of Standard Products. Previously, Mr. Numann worked at Siliconix for twelve years. He has a B.S. degree in Electrical Engineering and an MBA, both from Rensseleaer Polytechnic Institute, New York. William P. Ingram joined Supertex five years ago as its Director of Wafer Fab Operations. Prior to joining Supertex, he was Vice President of Technology Development at Crosspoint Solutions, before which he held management positions at Fairchild and National Semiconductor. He began his career at National after receiving his BS in Electrical Engineering with honors from the North Carolina State University. Franklin Gonzalez joined Supertex in November 1990 as a Process Development Manager. In 1994, he was promoted to Director of Process Technology. Prior to joining Supertex, he held various R&D management positions spanning over seventeen years with such companies as ECI Semiconductor, Telmos and Harris Semiconductor where he began his career. He has a Ph.D. in Electrical Engineering from the University of Florida and a Masters in Electrical Engineering from Stanford University. Michael Lee re-joined Supertex in October 1993 as Director of I.C. Design. Before that, he had a combined total of fifteen years of industry experience in I.C. Design. Mike began his career at Supertex after receiving his Masters in Electrical Engineering from UC Berkeley in 1978. Item 2. Properties The Company leases facilities covering approximately 38,000 square feet at 1225/1231 Bordeaux Drive, Sunnyvale, California. Operations at these facilities include the Company's four-inch wafer fabrication , as well as process engineering, assembly, and quality control functions. These facilities are leased from a corporation owned by a director of the Company. (See Note 7 of "Notes to Consolidated Financial Statements.") The Company also leases facilities at 71 Vista Montana, San Jose, California covering approximately 61,700 square feet where the Company's six-inch wafer fabrication and process engineering functions are located. The Company owns its corporate headquarters, a facility of approximately 42,000 square feet at 1235 Bordeaux Drive, Sunnyvale, California, which houses the executive offices, sales and marketing, product engineering, test, production control, corporate financial and administrative staff. The Company believes that its existing facilities and equipment are well maintained and are in good operating condition. Item 3. Legal Proceedings None Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the quarter ended March 31, 2000. PART II Item 5. Market for Registrant's Common Equity and Related Shareholder Matters On May 15, 2000, the last reported sale price was $33 1/4 per share. There were approximately 2,633 shareholders of record of common stock on May 15, 2000. We have not paid cash dividends on our common stock in fiscal years 2000 and 1999, and the Board of Directors presently intends to continue this policy in order to retain earnings for the development of the Company's business. Accordingly, it is anticipated that no cash dividends will be paid to holders of common stock in the foreseeable future. The following table sets forth the range of high and low closing sale prices reported on The NASDAQ Stock Market under the symbol SUPX for the periods indicated.
Fiscal Years Ended March 31, ---------------------------- 2000 1999 ---- ---- High Low High Low First Quarter $ 11 $ 8 5/8 $ 13 1/8 $ 8 3/4 Second Quarter 16 10 5/8 12 1/8 9 1/8 Third Quarter 18 12 11 1/2 9 1/16 Fourth Quarter 34 7/8 18 13 9 3/4
Item 6. Selected Consolidated Financial Data The selected financial information and other data presented below should be read in conjunction with the "Consolidated Financial Statements," "Notes to Consolidated Financial Statements," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Form 10-K.
Fiscal Years Ended March 31, 2000 1999 1998 1997 1996 (in thousands) Balance Sheet Data: Working capital......$ 52,950 $ 41,650 $ 44,868 $ 36,734 $ 32,197 Total assets.........$ 86,623 $ 74,589 $ 66,629 $ 56,408 $ 45,428 Shareholders' equity.$ 72,269 $ 62,680 $ 57,217 $ 48,487 $ 38,663
Fiscal Years Ended March 31, 2000 1999 1998 1997 1996 (in thousands, except per share amounts) Statement of Operations Data: Net sales................... $ 70,838 $ 50,721 $ 52,706 $ 48,935 $ 42,802 Costs and expenses: Costs of sales............ 44,976 28,867 28,709 26,073 22,097 Research and development.. 8,468 7,195 5,582 5,306 5,647 Selling, general and administrative............ 6,980 6,860 6,724 6,226 5,700 Write-off of acquired in process technology........ -- 2,506 -- -- -- Income from operations...... 10,414 5,293 11,691 11,330 9,358 Other income: Interest income........... 1,978 1,981 1,666 1,430 1,099 Other income, net......... 257 (130) 2 63 255 Income before provision for income taxes................ 12,649 7,144 13,359 12,823 10,712 Provision for income taxes.. 4,174 1,810 4,542 4,103 3,321 Net income.............. $ 8,475 $ 5,334 $ 8,817 $ 8,720 $ 7,391 Net income per share: Basic................... $ 0.70 $ 0.44 $ 0.73 $ 0.73 $ 0.62 Diluted................. $ 0.68 $ 0.44 $ 0.71 $ 0.70 $ 0.60 Shares used in per share computation: Basic................... 12,126 12,077 12,074 12,026 11,902 Diluted................. 12,519 12,225 12,380 12,509 12,296
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Cautionary Statement Regarding Forward Looking Statements This Annual Report on Form 10-K includes forward-looking statements. These forward-looking statements are not historical facts, and are based on current expectations, estimates, and projections about our industry, our beliefs, our assumptions, and our goals and objectives. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", and "estimates ", and variations of these words and similar expressions, are intended to identify forward-looking statements. Examples of the kinds of forward- looking statements in this report include statements regarding the following: (1) we believe we are a market leader, (2) our new fab will fulfil our wafer manufacturing capacity needs, (3) current backlog will be shipped in fiscal 2001, and (4) our patents may have value and may be useful for cross-licensing. These statements are only predictions, are not guarantees, of future performance, and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, and could cause actual results to differ materially form those expressed or forecasted in the forward-looking statements. These risks and uncertainties include those described below in "Risk Factors" and elsewhere in this report. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. Risk Factors Semiconductor companies as a group are subject to many similar risks. These include the risks that (1) the demand for semiconductors decreases as the industry has historically been very cyclical, (2) there are shortages of raw materials and/or fab capacity, (3) there are changes in underlying circuitor process technology or fab technology, or (4) there is litigation regarding third party patents. Other factors that could affect our future results include whether we can generate new bookings from both new and current products; general economic conditions, both in the United States and foreign markets, and economic conditions specific to the semiconductor industry; risks associated with customer concentration; our ability to introduce new products, to enhance existing products, and to meet the continually changing requirements of our customers; whether we can manufacture efficiently and control costs; and our ability to maintain and enhance relationships with our assembly and test subcontractors and independent distributors and sales representatives. In addition, we are subject to the below-described risks which are specific to us and our business: - We have focused our product offerings primarily on niche markets which leverage our capabilities and which we believe we can dominate. We attempt to choose markets which are sizable enough to be worth pursuing but which are not large enough to attract fierce competition. These markets could grow enough to attract increased competition or else competitors could enter due to happenstance or down-turns elsewhere. In addition, these niches might be more susceptible to shrinkage than more diverse markets, due to their concentration on a few product offerings. - We are dependent upon one fab which we own and operate, assuming successful conversion from our four-inch to our six-inch fab. We would be susceptible were this fab to be unable to meet our needs, for example, were this fab to become obsolete due to process technology changes, or to be damaged, for example by fire or earthquake. We could encounter difficulties in operating our fab, such as contaminants in the air or defects in equipment, which could affect yields and production. - We have several competitors which are substantially larger and could bring to bear substantially more resources in our niche markets. We have been able to maintain high margins in part because of our dominance of most of our niche markets. Increased competition could cause our margins to decrease. - Our outstanding stock is owned more than 25% by Henry Pao, President, CEO, and a director, and his father and brother. They have no agreement among themselves to act together with respect to the Company or their stockholdings. Were they to act in concert, they would be our largest shareholder and would have an ability to elect one or more directors, to direct management, and to delay or prevent a change in control. - We sell a substantial amount of our products internationally. Problems with foreign economies or wars, or changes in the exchange rate, could adversely affect our foreign sales. - We depend upon two customers for approximately 23% of our sales, even though one is our primary distributor in Japan and the other is a foundry customer. Customers can typically cancel or reschedule orders without penalty so decreased demand for our products could translate into decreased sales very rapidly. - We are very dependent upon continued innovation of our engineers. The competition for engineers with relevant experience is extremely intense in the Silicon Valley, where most of our engineers are located. We must compete in terms of salary, benefits, and working conditions with many start-ups which can offer more equity. We have started an IC Design Center in Hong Kong where competition is not as intense. - We are dependent upon several key persons for management and engineering expertise. Their loss would be detrimental to us. The following discussion should be read in conjunction with the "Consolidated Financial Statements," "Notes to Consolidated Financial Statements" and "Selected Consolidated Financial Data" included elsewhere in this Form 10-K. The following table sets forth items from the Statements of Income as a percentage of net sales for the periods indicated:
Fiscal Years Ended March 31, 2000 1999 1998 Net sales............................ 100.0% 100.0% 100.0 % Costs of sales...................... 63.5 56.9 54.5 Research and development............ 11.9 14.2 10.6 Selling, general and administrative. 9.9 13.6 12.8 Write off of acquired in process technology.......................... -- 4.9 -- Income from operations............... 14.7 10.4 22.1 Other income Interest income..................... 2.8 3.9 3.2 Other income (expense), net......... 0.4 (0.2) 0.0 Income before provision for income taxes ..................... 17.9 14.1 25.3 Provision for income taxes........... 5.9 3.6 8.6 Net income....................... 12.0% 10.5% 16.7%
Results of Operations Fiscal 2000 VS Fiscal 1999 Net Sales: The Company had net sales of $70,838,000 in fiscal 2000, an increase of $20,117,000 or 39.7% from the previous fiscal year. The increase in the current year's net sales is primarily due to the addition of the foundry business resulting from the acquisition of the submicron wafer fabrication facility (fab) on February 1, 1999. This foundry business represented 32.3% of the total increase over fiscal 1999 net sales. The remaining 7.4% of the increase over fiscal 1999 net sales is due to increased sales of core products. In fiscal 2000, approximately 36% of the Company's net sales were derived from customers outside the United States, primarily in Western Europe and the Far East (51% in fiscal 1999). The decrease in percentage of international sales is primarily due to the acquisition and growth of the foundry business which has only U.S. customers. International sales represented 50% and 55% of net core business sales in fiscal 2000 and 1999, respectively. All of the Company's sales to international customers were denominated in U.S. currencies. There was no currency exchange exposure. Gross Margin: The Company's gross margin as a percentage of net sales was 36.5% and 43.1%, in fiscal 2000 and 1999, respectively. Gross margin for the current fiscal year was adversely affected by the Company incurring additional overhead expenses as a result of operating two fabs, including the depreciation of the capitalized assets and the amortization of other assets associated with the new fab. Gross margin during fiscal 2000 was also affected by lower margins associated with the foundry business resulting from the acquisition of the Company's new fab. Research and Development: Research and development expenses, which include payroll and benefits, processing costs and process transfer costs, were 11.9% and 14.2% of net sales in fiscal 2000 and 1999, respectively. Dollar expenditures for research and development were $8,468,000 and $7,195,000 for fiscal 2000 and 1999, respectively. While the dollar expenditure for fiscal 2000 is higher than the prior fiscal year, the growth in net sales caused the percentage of research and development expense to net sales to decline. The increase in research and development expenses is due to a non- recurring payment of $1,350,000 to Orbit Semiconductor, Inc. under a process development agreement to accelerate the process transfer of Supertex's core products to the six-inch fab from the old four-inch fab. Selling, General and Administrative: Selling, general and administrative expenses, which include commissions, payroll and benefits, were 9.9% and 13.6% of net sales in fiscal 2000 and 1999, respectively. In fiscal 2000, the selling, general and administrative expenses was $6,980,000 compared to $6,860,000 for fiscal 1999. While the selling, general and administrative expenses remained relatively the same as the previous year, the increase in net sales amount caused the percentage of selling, general and administrative expenses as a percent of net sales to decrease 3.7%. Interest Income: Interest income, which consists primarily of interest income from the Company's cash, cash equivalents and short- term investments, was $1,978,000 in fiscal 2000 as compared with $1,981,000 in fiscal 1999. The decrease in interest income was caused by the decrease in cash available for investment due to the purchase of the new fab. Other Income: Other Income of $257,000 for fiscal 2000 consists primarily of gain on disposal of surplus equipment and sublease expenses net of sublease income. The increase in this category for the fiscal 2000 when compared to fiscal 1999 was primarily due to the gain on disposal of surplus equipment. Provision for Income Taxes: Income taxes for fiscal 2000 and 1999 were at 33.0% and 25.3%, respectively, of income before provision for income taxes. The current fiscal year's tax provision is 33% compared to a lower tax provision for fiscal 1999. Higher tax credits and additional expenses from the acquisition of the six-inch fab caused fiscal 1999 tax rate to be significantly lower. Fiscal 1999 VS Fiscal 1998 Net Sales: The Company had net sales of $50,721,000 in fiscal 1999, a decrease of $1,985,000 or 3.8% from the previous fiscal year. The decline in fiscal 1999 net sales reflects weakness in demand and price pressure during the first three fiscal quarters primarily as a result of the Asian economic crisis. In fiscal 1999, approximately 51% of the Company's net sales were derived from customers outside the United States, primarily in Western Europe and the Far East (53% in fiscal 1998). All of the Company's sales to international customers were denominated in U.S. currencies. There was no currency exchange exposure; however, during the first three quarters of fiscal 1999 when the US dollar strengthened beyond expectation, many international customers requested and received some modest price concessions. Gross Margin: The Company's gross margin as a percentage of net sales was 43.1% and 45.5% in fiscal 1999 and 1998, respectively. The decline in gross margin in fiscal 1999 is the result of the decline in net sales as discussed above and increased manufacturing depreciation expense partly due to the acquisition of the six-inch submicron wafer fabrication facility. Research and Development: Research and development expenses were 14.2% and 10.6% of net sales in fiscal 1999 and 1998, respectively. The increase in research and development expenses for fiscal 1999 is attributable primarily to the Process Development Agreement ("PDA") that the Company has with Orbit Semiconductor which will allow faster process transfer from the Company's four inch fabrication processes to the Company's newly acquired six inch submicron wafer fabrication facility. The PDA extends up to the first quarter for fiscal 2000. Selling, General and Administrative: Selling, general and administrative expenses were 13.6% and 12.8% of net sales in fiscal 1999 and 1998, respectively. In fiscal 1999, the selling, general and administrative expenses remained relatively the same as the previous year but the decline in net sales amount caused the percentage to increase less than 1%. Write-off of In-process Technology: The Company incurred a non-cash, non-tax deductible charge to operations of $2.5 million for the write-off of in-process technology related to the acquisition of assets from Orbit Technology in February 1999, because the technological feasibility of the in-process technology acquired had not been established and there was no alternative future use. Interest Income: Interest income, which consists primarily of interest income from the Company's cash, cash equivalents and short- term investments, was $1,981,000 as compared with $1,666,000 in fiscal 1998 due to the larger amount of funds available for investment. Other Income (Expense): Other Income (expense) of $130,000 for fiscal 1999 consists primarily of royalties received from Texas Instruments net of tax, sublease income net of sublease expenses, and gain on disposal of retired equipment. The decline in this category for the fiscal year 1999 when compared to fiscal 1998 was primarily due to additional sublease expenses incurred during the fiscal year, mainly depreciation in nature, as a result of a new sublease contract. Provision for Income Taxes: Income taxes for fiscal 1999 and 1998 were at 25.3% and 34.0%, respectively, of income before provision for income taxes. The lower tax provision for fiscal 1999 was due to higher tax credits and additional expenses from the acquisition of the six-inch facility Financial Condition Overview: Total assets grew to $86,623,000 at the end of fiscal 2000, up from $74,589,000 at the end of fiscal 1999. The increase was due primarily to profit generated from operations during the year. Liquidity and Capital Resources: The Company's primary source of funds for fiscal 2000, 1999, and 1998 has been the net cash generated from operating activities of $9,022,000, $10,274,000, and $10,864,000, respectively. Net cash provided by operating activities in fiscal 2000 of $9,022,000 consisted principally of net income of $8,475,000, plus depreciation and amortization of $6,118,000, provision for doubtful accounts and sales returns of $3,150,000, income taxes payable of $1,186,000, and an increase in accounts payable and accrued expenses of $2,455,000, partially offset by decreases in accounts receivable, deferred income taxes and inventories of $6,718,000, $1,017,000, and $3,295,000, respectively. Net cash used in investing activities in fiscal 2000 was $15,265,000, which consisted of increase in short term investments of $11,385,000 and the purchase of property and equipment of $3,880,000. Net cash provided by financing activities in fiscal 2000 was $637,000, which consisted of proceeds from exercises of stock options of $1,602,000 partially offset by repurchases of the Company's common stock in the amount of $965,000. As of March 31, 2000, the Company's working capital was $52,950,000, which included approximately $34,176,000 in cash, cash equivalents and short-term investments. The Company anticipates that the available funds and cash expected to be generated from operations will be sufficient to meet cash and working capital requirements through the end of fiscal 2000. The Company expects to spend approximately $7,000,000 for capital acquisitions during fiscal 2001. Year 2000 Issues. We reviewed and tested our internal programs and noted no issues relating to Year 2000. We have not experienced any problems with our computer systems being unable to recognize appropriate dates related to Year 2000. We are also not aware of any material problems with our customers or suppliers. Accordingly, we do not anticipate incurring material expenses or experiencing any material operational disruption as a result of Year 2000 issues. Recent Accounting Pronouncements 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, 2000. Earlier application is allowed as of the beginning of any quarter beginning after issuance. The Company does not anticipate that the adoption of SFAS 133 will have a material impact on its financial position or results of operations. In March 2000, The Financial Accounting Standards Board ("FASB") issued FASB interpretation No. 44 "Accounting for Certain Transactions Involving Stock Compensation an interpretation of APB Opinion No. 25". This interpretation has provisions that are effective on staggered dates, some of which began after December 15, 1998 and others that become effective after June 30, 2000. The adoption of this interpretation did not, and is not expected to have a material impact on the financial statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to financial market risks due primarily to changes in interest rates. The Company does not use derivatives to alter the interest characteristics of its investment securities. The Company has no holdings of derivative or commodity instruments. The fair value of the Company's investment portfolio or related income would not be significantly impacted by changes in interest rates since the investment maturities are short and the interest rates are primarily fixed. The Company anticipates interest income on cash balances for FY2001 to be approximately $1,750,000 at an estimated average interest rate of 5%. Item 8. Financial Statements and Supplementary Data The Financial Statements and Financial Statement Schedule are listed in Item 14 of this report. Supplementary Quarterly Financial Data:
Quarters Ended Mar Dec Sep Jun Mar Dec Sep Jun 31, 31, 30, 30, 31, 31, 30, 30, 2000 1999 1999 1999 1999 1998 1998 1998 (Unaudited) (in thousands, except per share amounts) Statement of Operations Data: Net sales ...... $20,095 $17,709 $16,737 $16,297 $13,053 $12,017 $12,650 $13,001 Costs of sales.. 12,445 11,065 10,725 10,741 8,887 6,565 6,508 6,907 Income (loss) from operations. 3,384 3,122 2,679 1,229 (2,934) 2,447 2,879 2,901 Income (loss) before provision for income taxes 4,442 3,648 2,963 1,596 (2,593) 3,046 3,349 3,342 Net income (loss)$ 2,977 $ 2,444 $ 1,985 $ 1,069 $(1,287) $ 2,204 $ 2,210 $ 2,207 Net Income (loss) per share Basic........ $ 0.24 $ 0.20 $ 0.16 $ 0.09 $ (0.11) $ 0.18 $ 0.18 $ 0.18 Diluted...... $ 0.23 $ 0.20 $ 0.16 $ 0.09 $ (0.11) $ 0.18 $ 0.18 $ 0.18
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Certain information required by Part III is incorporated by reference from the Company's definitive Proxy Statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the Company's 2000 Annual Meeting of Stockholders (the "Proxy Statement"). Item 10. Directors and Executive Officers of the Registrant Information regarding our directors is set forth under "Election of Directors - Nominees" in the Proxy Statementand is incorporated by reference. The required information regarding executive officers is included in Part I hereof under caption "Executive Officers of the Company" Item 11. Executive Compensation Information regarding the Company's remuneration of its officers and directors is set forth under "Compensation of Directors" and "Compensation of Executive Officers" in the Proxy Statement and is incorporated by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management Information regarding the security ownership of certain beneficial owners and management is set forth under "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement and is incorporated by reference. Item 13. Certain Relationships and Related Transactions Information regarding certain relationships and related transactions is set forth under "Certain Transactions: Lease with Company Director" in the Proxy Statement, and is incorporated by reference. PART IV Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K (a) The following documents are filed as part of this report: Page No. 1. Report of Independent Accountants..................... 18 2. Consolidated Financial Statements: Consolidated Balance Sheets at March 31, 2000 and 1999............................................... 19 For the three years ended March 31, 2000, 1999, and 1998: Consolidated Statements of Income............... 20 Consolidated Statements of Shareholders'Equity.. 21 Consolidated Statements of Cash Flows........... 22 Notes to Consolidated Financial Statements......... 23 3. Financial Statement Schedule. The following Financial Statement Schedule of Supertex, Inc., is filed as part of this report and should be read in conjunction with the Consolidated Financial Statements of Supertex. Schedule for fiscal years ended March 31, 2000, 1999, and 1998: II Valuation and Qualifying Accounts............... 31 All other schedules have been omitted since the required information is not present or it is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements, including notes thereto. 4. Exhibits. The exhibits listed in the accompanying EXHIBIT INDEX are filed as part of this annual report. (b) Reports on Form 8-K No reports on Form 8-K have been filed during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SUPERTEX, INC. Dated: June 16, 2000 /s/ Henry C. Pao Henry C. Pao, President, Principal Financial and Accounting Officer Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Henry C. Pao, his attorney-in- fact, with the power of substitution, for him in any and all capacities, to sign any amendments to this report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Signature Title Date /s/ Henry C. Pao President, Principal Executive and June 16, 2000 (Henry C. Pao) Financial Officer and Director /s/ Richard E. Siegel Executive Vice President and Director June 16, 2000 (Richard E. Siegel) /s/ Benedict C. K. Choy Senior Vice President and Director June 16, 2000 (Benedict C. K. Choy) /s/ Yunni Pao Director June 16, 2000 (Yunni Pao) /s/ Frank C. Pao Director June 16, 2000 (Frank C. Pao) REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Supertex, Inc. In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a)(2) present fairly, in all material respects, the financial position of Supertex, Inc. and its subsidiary at March 31, 2000 and March 31, 1999, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2000, in conformity with accounting principles generally accepted in the United States. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)(3) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/PRICEWATERHOUSECOOPERS LLP San Jose, California April 28, 2000
SUPERTEX, INC. CONSOLIDATED BALANCE SHEETS (in thousands) March 31, 2000 1999 ---- ---- ASSETS Current Assets: Cash and cash equivalents......................$ 22,584 $ 28,190 Short term investments......................... 11,592 207 Trade accounts receivable, net of allowances of $1,366 in 2000 and $1,020 in 1999........... 14,428 10,860 Other accounts receivable...................... 315 657 Inventories.................................... 15,083 11,330 Prepaid expenses............................... 440 453 Deferred income taxes.......................... 2,862 1,862 -------- -------- Total current assets........................ 67,304 53,559 Property, plant and equipment, net................ 14,890 15,946 Intangible and other assets, net.................. 2,559 3,231 Deferred income taxes............................. 1,870 1,853 -------- -------- TOTAL ASSETS......................................$ 86,623 $ 74,589 ======== ======== LIABILITIES Current Liabilities: Trade accounts payable.........................$ 8,395 $ 6,835 Accrued salaries, wages and employee benefits.. 4,495 3,162 Other accrued liabilities...................... 276 714 Deferred revenue on shipments to distributors.. 835 1,198 Income taxes payable........................... 353 -- ------ ------ Total current liabilities................... 14,354 11,909 ------ ------ Commitments and contingencies (Note 7) 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 12,251 shares in 2000 and 12,099 shares in 1999...... 23,167 20,887 Accumulated other comprehensive income......... -- 356 Retained earnings.............................. 49,102 41,437 ------ ------ Total shareholders'equity................... 72,269 62,680 ------ ------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........$ 86,623 $ 74,589 ====== ====== See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) Year Ended March 31, 2000 1999 1998 Net sales...................... $ 70,838 $ 50,721 $ 52,706 ------ ------ ------ Costs and expenses: Costs of sales............... 44,976 28,867 28,709 Research and development..... 8,468 7,195 5,582 Selling, general and administrative............... 6,980 6,860 6,724 Write-off of acquired in process technology........... -- 2,506 -- ------ ------ ------ Total costs and expenses.. 60,424 45,428 41,015 ------ ------ ------ Income from operations......... 10,414 5,293 11,691 Other income: Interest income.............. 1,978 1,981 1,666 Other income (expense), net.. 257 (130) 2 ------ ------ ------ Income before provision for income taxes.......... 12,649 7,144 13,359 Provision for income taxes..... 4,174 1,810 4,542 ------ ------ ------ Net income..................... $ 8,475 $ 5,334 $ 8,817 ====== ====== ====== Net income per share: Basic........................ $ 0.70 $ 0.44 $ 0.73 Diluted...................... $ 0.68 $ 0.44 $ 0.71 Shares used in per share computation: Basic........................ 12,126 12,077 12,074 Diluted...................... 12,519 12,225 12,380 See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in thousands) Accumulated Other Common Stock Comprehensive Retained Shareholders' Shares Amount Income Earnings Equity Balance, March 31, 1997......12,047 20,302 -- 28,185 48,487 Stock options exercised.... 97 375 -- -- 375 Stock repurchased.......... (47) (71) -- (443) (514) Tax benefit from exercise of stock options........... -- 52 -- -- 52 Net income................. -- -- -- 8,817 -- Total comprehensive income. -- -- -- -- 8,817 ---------------------------------------------- Balance, March 31, 1998......12,097 20,658 -- 36,559 57,217 Stock options exercised.... 63 282 -- -- 282 Stock repurchased.......... (61) (103) -- (456) (559) Tax benefit from exercise of stock options........... -- 50 -- -- 50 Change in unrealized holding gains and losses... -- -- 356 -- -- Net income................. -- -- -- 5,334 -- Total comprehensive income. -- -- -- -- 5,690 ---------------------------------------------- Balance, March 31, 1999......12,099 20,887 356 41,437 62,680 Stock options exercised.... 247 1,602 -- -- 1,602 Stock repurchased ......... (95) (155) -- (810) (965) Tax benefit from exercise of stock options........... -- 833 -- -- 833 Change in unrealized holding gains and losses... -- -- (356) -- -- Net income................. -- -- -- 8,475 -- Total comprehensive income. -- -- -- -- 8,119 ---------------------------------------------- Balance, March 31, 2000......12,251 $ 23,167 $ -- $ 49,102 $ 72,269 ====== ======== ========== ========= ========= See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended March 31, 2000 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net income.............................. $ 8,475 $ 5,334 $ 8,817 Non-cash adjustments to net income: Depreciation and amortization......... 6,118 4,135 2,669 Write-off of in-process technology.... -- 2,506 -- Provision for doubtful accounts and sales returns......................... 3,150 2,417 1,573 Provision for excess and obsolete inventories........................... (458) 1,300 277 (Gain) / Loss on disposal of assets... (203) -- 11 Deferred income taxes................. (1,017) (1,533) (347) Changes in operating assets and liabilities: Accounts receivable................... (6,718) (3,828) (2,188) Inventories........................... (3,295) (2,367) (1,291) Prepaid expenses and other assets..... (308) (238) (200) Trade accounts payable and accrued expenses.............................. 2,455 3,830 203 Income taxes payable.................. 1,186 (1,029) 966 Deferred revenue on shipments to distributors.......................... (363) (253) 374 --------- -------- -------- Total adjustments....................... 547 4,940 2,047 --------- -------- -------- Net cash provided by operating activities.............................. 9,022 10,274 10,864 --------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of intangible assets -- (4,723) -- Purchases of property and equipment..... (3,880) (7,586) (3,276) Purchases of short term investments............................. (54,152) (41,172) (27,213) Proceeds from maturities of short term investments............................. 42,767 47,118 25,152 --------- -------- -------- Net cash used in investing activities... (15,265) (6,363) (5,337) --------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised................. 1,602 282 375 Stock repurchased....................... (965) (559) (512) --------- -------- -------- Net cash provided by (used in) financing activities.............................. 637 (277) (137) --------- -------- -------- NET INCREASE IN CASH AND CASH EQUIVALENTS............................. (5,606) 3,634 5,390 CASH AND CASH EQUIVALENTS: Beginning of year..................... 28,190 24,556 19,166 --------- -------- -------- End of year........................... $22,584 $28,190 $24,556 ========= ======== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Tax benefit from exercise of stock options $ 833 $ 50 $ 52 Stock tendered for exercise of stock options 122 4 64 See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Nature of Business: The Company designs, manufactures and markets custom and standard semiconductor products. Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated. Fiscal Period: The Company uses a 52-53 week fiscal year ending the Saturday nearest March 31. The Company's fiscal years in the accompanying financial statements have been shown ending on March 31. Fiscal year 2000 comprises 53 weeks. Fiscal years 1999, and 1998 both comprise 52 weeks. Use of Estimates in Preparation of the Financial Statements: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain Risks and Uncertainties: The Company's business is concentrated in the high voltage semiconductor components industry, which is rapidly changing, highly competitive and subject to competitive pricing pressures. The Company's operating results may experience substantial period-to-period fluctuations due to these factors, including the cyclical nature of the semiconductor industry, the changes in customer requirements, the timely introduction of new products, the Company's ability to implement new capabilities or technologies, its ability to manufacture efficiently, its reliance on subcontractors and vendors, and the general economic conditions. Cash and Cash Equivalents: The Company considers all highly liquid debt and equity instruments purchased with an original maturity of three months or less to be cash equivalents. Financial Instruments: Short term investments, which are classified as available-for-sale, consist principally of commercial paper that matures within one year and are stated at fair market value, which approximates cost. Unrealized holding gains and losses are reflected at a net amount as a separate component of the shareholders' equity until realized. For the purpose of computing realized gains and losses, cost is identified on a specific identification basis. Investments in equity securities that are not traded on public markets are accounted for under the cost method of accounting. The company periodically evaluates the carrying value of such equity investments and when a decline in the value is other than temporary, the securities are reduced to their net realizable value. The Company's Supplemental Employee Retirement Plan has investments in equity securities that are not publicly traded. Concentration of credit risk and foreign operations: Financial instruments which potentially subject the Company to concentrations of credit risk consists principally of cash and cash equivalents and accounts receivable. The Company's accounts receivable are derived from revenue and earned from customers located in the U.S. and certain foreign countries and regions, including Europe and Japan. Sales to foreign customers for the year ended December 31, 1998, 1999 and 2000, all of which were denominated in U.S. dollars, accounted for 53%, 51% and 36% of net sales, respectively. The Company performs ongoing credit evaluations of its customers' financial condition and requires no collateral from its customers. The Company maintains an allowance for doubtful accounts receivable based upon the expected collectibility of accounts receivable. The Company sells its semiconductor products in North America, Europe and the Pacific Rim to numerous customers. Allowances for potential credit losses are maintained and such losses historically have not been SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) material. Substantially all of the Company's cash, cash equivalents and short term investments are held at four major financial institutions domiciled in the United States. Significant Customers: During the year ended March 31, 2000, two customers, Microtek and Dii Semiconductor, represented 10% and 17% of gross accounts receivables, and 12% and 11% of net sales, respectively. Microtek also accounted for approximately 16%, and 19% of net sales in fiscal 1999, and 1998, respectively. Inventories: Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or market value. The Company's inventories include high technology parts and components that are specialized in nature and subject to rapid technological obsolescence. While the Company has programs to minimize the required inventories on hand and considers technological obsolescence when estimating amounts required to reduce recorded amounts to market values, it is reasonably possible that such estimates could change in the near term. Property, Plant and Equipment: Property and equipment are stated at cost and generally depreciated using accelerated methods over estimated useful lives of five years. Building and building improvements are recorded at cost and are depreciated on a straight- line basis over the useful life of the building. Leasehold improvements are recorded at cost and are amortized on a straight- line basis over the lesser of the related lease term or the estimated useful life of the assets. The Company reviews for impairment of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. In certain situations, an impairment loss would be recognized. Intangible Assets: Intangible assets were recorded in conjunction with the Asset Purchase Agreement with Orbit Semiconductor. Other intangible assets consist of purchased technology and assembled workforce, which are being amortized on a straight-line basis over their estimated useful lives of two years and five years, respectively. The Company assesses the recoverability of intangible assets by determining whether the amortization of the asset's net book value over its remaining life can be recovered through projected undiscounted future cash flows. Intangible assets consist of the following at March 31, 2000 and 1999 (in thousands):
March 31, 2000 1999 -------- -------- Purchased technology $ 1,735 $ 1,735 Assembled workforce 482 482 -------- -------- 2,217 2,217 Less accumulated amortization (1,124) (145) -------- -------- $ 1,093 $ 2,072 ======== ========
Revenue Recognition: Net sales are stated net of discounts and allowances. Revenue from direct sales to end-user customers is recognized upon shipment of product. Sales to distributors are made primarily under arrangements allowing limited price protection and the right of stock rotation on merchandise unsold by the distributors. Because of the uncertainty associated with pricing concessions and possible returns, the Company defers recognition of such sales and the related costs of sales until the merchandise is sold by distributors to their end-user customers. 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. The following is a reconciliation of the numerator (net income) and the denominator (number of shares) used in the basic and diluted EPS calculations. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Fiscal Year Ended March 31, 2000 1999 1998 ---- ---- ---- BASIC: Weighted average shares outstanding for the period .................... 12,126 12,077 12,074 Net income ........................ $ 8,475 $ 5,334 $ 8,817 Net income per share............... $ 0.70 $ 0.44 $ 0.73 DILUTED: Weighted average shares outstanding for the period ....... 12,126 12,077 12,074 Potential common stock............ 393 148 306 ------- ------- ------- Total common and common equivalent shares ............................ 12,519 12,225 12,380 Net income ........................ $ 8,475 $ 5,334 $ 8,817 Net income per share............... $ 0.68 $ 0.44 $ 0.71 Options to purchase the Company's common stock of 9,230 shares at prices between $16.50 - $26.06, 515,446 shares at prices between $8.88 - $16.75, and 200,600 shares of the Company's common stock at prices between $13.88 - $19.88, in fiscal 2000, 1999, and 1998, respectively, were outstanding but were not included in the computation of diluted earnings per share because the option exercise prices were greater than the average market price of the common stock. Income Taxes: The Company utilizes the liability method to account for income taxes where deferred tax assets or liabilities are determined based on the temporary differences between the bases used for financial versus tax reporting of assets and liabilities, using tax laws and rates in effect for the year in which the differences are expected to affect taxable income. Advertising Costs: We expensed advertising and promotional costs as they are incurred. Advertising costs for the last three fiscal years were immaterial. Fair Value of Financial Instruments: Carrying amounts of certain of the Company's financial instruments including cash, cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short maturities. Comprehensive Income: In fiscal 1999, the Company adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for disclosure and financial statement display for reporting total comprehensive income and its individual components. Comprehensive income, as defined, includes all changes in equity during a period from non-owner sources. The Company's comprehensive income includes net income and unrealized gains and losses on investments and is displayed in the statement of stockholders' equity, Recent Accounting Pronouncements: 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, 2000. Earlier application is allowed as of the beginning of any quarter beginning after issuance. The Company does not anticipate that the adoption of SFAS 133 will have a material impact on its financial position or results of operations. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) In March 2000, The Financial Accounting Standards Board ("FASB") issued FASB interpretation No. 44 "Accounting for Certain Transactions Involving Stock Compensation an interpretation of APB Opinion No. 25". This interpretation has provisions that are effective on staggered dates, some of which began after December 15, 1998 and others that become effective after June 30, 2000. The adoption of this interpretation is not expected to have a material impact on the financial statements. 2. INVENTORIES (in thousands):
March 31, 2000 1999 ---- ---- Raw materials...................$ 1,088 $ 697 Work-in-process................. 11,652 7,099 Finished goods.................. 2,343 3,534 -------- -------- $ 15,083 $ 11,330 ======== ========
3.PROPERTY AND EQUIPMENT (in thousands):
March 31, 2000 1999 ---- ---- Land......................... $ 825 $ 825 Machinery and equipment...... 32,439 28,936 Leasehold improvements ...... 2,518 2,374 Building..................... 2,038 1,968 Furniture and fixtures....... 209 118 -------- -------- 38,029 34,221 Less accumulated depreciation and amortization............. (23,139) (18,275) -------- -------- $ 14,890 $ 15,946 ======== ========
4. ACQUISITION OF FACILITY (in thousands): In February 1999, the Company acquired certain assets related to the six-inch fabrication facility of Orbit Semiconductor for a total cash purchase price of approximately $10,000,000 including direct costs incurred. The acquisition of assets has been accounted for as a purchase and the results of operations have been included in the consolidated statement of operations of the Company from the date of acquisition. The purchase price was allocated to assets acquired based on fair value determined by independent appraisers. The allocation of the purchase price was as follows (in thousands): Property and equipment $ 5,277 Purchased technology 1,735 Assembled workforce 482 In-process technology 2,506 ------- $10,000 ======= The amounts allocated to purchased technology and assembled workforce were determined through known valuation techniques in the high technology industry. The value assigned to in-process technology was determined by identifying development projects for which technological feasibility had not been established and estimating the expected cash flows from the projects once commercially feasible. These cash flows were discounted back to their present value and a percentage of completion discount was applied to the calculation. The percentage of completion for the in- process projects ranged from 50% to 90% complete, resulting in estimated cost to complete of $7,000,000. The technological feasibility of the in-process technology had not been established and had no alternative future use. Accordingly, the entire $2.5 million has been charged to operations in the fourth quarter of fiscal 1999. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 5. INCOME TAXES The components of the provision for income taxes for fiscal years ended March 31, 2000, 1999, and 1998 are as follows (in thousands):
March 31, 2000 1999 1998 Federal - current................$ 4,713 $ 3,226 $ 4,223 Federal - deferred............... (718) (1,304) (333) -------- -------- -------- 3,995 1,922 3,890 -------- -------- -------- State - current.................. 478 117 666 State- deferred.................. (299) (229) (14) -------- -------- -------- 179 (112) 652 -------- -------- -------- $ 4,174 $ 1,810 $ 4,542 ======== ======== ========
Substantially all of the Company's revenue is taxable in the United States. The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes as follows:
2000 1999 1998 Statutory provision.................... 34% 34% 35% State tax, net of federal benefits..... 3 5 4 Tax credits............................ (1) (6) (3) Benefit of foreign sales corporation... (2) (4) (3) Other.................................. (1) (4) 1 ---- ---- ---- 33% 25% 34% ==== ==== ====
Income taxes of $4,110,000, $4,891,000, and $4,226,000 were paid during fiscal 2000, 1999, and 1998, respectively. The components of the deferred tax assets are as follows (in thousands):
March 31, 2000 1999 ---- ---- Deferred tax assets: Depreciation and amortization ...... $ 2,097 $ 1,853 Accrued employee benefits........... 907 337 Inventory allowances................ 125 561 Accrued liabilities................. 601 433 State deferred taxes (net of federal benefits)........................... 120 31 Deferred revenue on shipments to distributors........................ 319 457 Allowances for doubtful accounts and sales returns....................... 181 (66) Manufacturing investment credit..... 233 -- Other............................... 149 109 ------- ------- Total deferred tax assets......... $ 4,732 $ 3,715 ======= =======
Management has determined that no valuation allowance is required because, although realization is not assured, the Company has sufficient taxable income in carryback years to absorb items deductible in the future for federal tax purposes and anticipates that its estimated future taxable income will allow the deferred tax asset for state tax purposes to be fully realized in future years. The amount of the deferred tax asset that is realizable could be reduced in the near term if actual results differ significantly from estimates of future taxable income. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 6. EMPLOYEE BENEFIT PLANS Profit Sharing Plan -- The Company has a discretionary profit sharing plan for the benefit of eligible employees. Related expenses were $1,152,000, $914,000, and $1,299,000 in fiscal 2000, 1999, and 1998, respectively. Savings and Retirement Plan -- The Supertex Savings and Retirement Plan allows for employee savings intended to qualify under the provisions of Section 401 of the Internal Revenue Code. Employees having at least three months of permanent service may make pretax contributions of 1% to 20% of qualified compensation, with the Company matching certain percentages of employee contributions, all of which are 100% vested. In fiscal years 2000, 1999 and 1998, the Company's matching contributions were $254,000, $189,000, and $180,000, respectively. Stock Option Plan -- The 1991 Stock Option Plan (the Option Plan) provides for granting incentive stock options to employees, and non- statutory stock options to employees and consultants. Terms for exercising options are determined by the Board of Directors, and options expire at the earlier of the term provided in the Notice of Grant or upon termination of employment or consulting relationship. A total of 2,825,715 shares of the Company's common stock were reserved for issuance under the 1991 Plan. Options granted under the Plan are granted at the fair market value of the Company's common stock on the date of grant and generally expire 7 years from the date of grant or at termination of service, whichever occurs first. The options generally are exercisable beginning one year from date of grant and generally vest over a five-year period. Activity under the Option Plan is as follows (in thousands, except share and per share data):
Available Option Outstanding Weighted for Average Grant Shares Price Per Share Exercise Price --------- ---------- ----------------- --------- Balance, March 31, 1997 479,975 1,006,890 2 3/4 - 19 7/8 8.63 Granted (378,300) 378,300 10 5/8 - 15 1/4 11.96 Exercised (96,770) 2 3/4 - 16 1/2 4.54 Canceled 276,860 (276,860) 3 - 19 7/8 13.02 Balance, March 31, 1998 378,535 1,011,560 2 3/4 - 16 3/4 9.06 Granted (430,500) 430,500 9 5/8 - 11 10.82 Exercised (63,000) 2 3/4 - 10 1/8 4.55 Canceled 93,700 (93,700) 2 7/8 - 16 3/4 12.57 Balance, March 31, 1999 41,735 1,285,360 2 3/4 - 16 3/4 9.62 Authorized 900,000 Grants (377,600) 377,600 13 1/2 - 26 1/16 15.11 Exercised (246,840) 2 3/4 - 12 1/2 6.98 Canceled 156,300 (156,300) 3 1/4 - 16 1/2 10.94 Balance, March 31, 2000 720,435 1,259,820 $ 2 7/8 - 26 1/16 $ 11.62
Stock Compensation -- The Company has adopted the disclosure-only provisions of SFAS 123. Accordingly, no compensation cost has been recognized for the 1991 Stock Option Plan. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) The options outstanding and currently exercisable by exercise price under the Option Plan at March 31, 2000 are as follows:
Option Outstanding Options Exercisable ------------------------------------------------------------- Weighted- Weighted- Range of Number Average Average Number Weighted- Exercise Outstanding Remaining Exercise Outstanding Average Prices Contractual Price Exercise Life Price - ----------------------------------------------------------------------------- $2.88 - $10.63 403,000 3.11 $ 8.91 230,860 $ 7.79 $10.75 - $11.00 358,060 6.50 $10.85 26,020 $10.98 $11.13 - $13.50 315,660 5.31 $12.85 51,920 $11.98 $14.00 - $26.06 183,100 6.53 $16.93 4,700 $15.61 - ----------------------------------------------------------------------------- $2.88 - $26.06 1,259,820 5.12 $ 11.62 313,500 $ 8.86
The weighted average fair value of options granted during fiscal 2000, 1999, and 1998 was $7.50 per share, $5.89 per share, and $4.94 per share, respectively. All options were granted at market price of the Company's common stock on the date of grant. The Company made option grants prior to fiscal 1996, the effective disclosure date of SFAS 123. Therefore, the pro forma disclosures may not be representative of the effects on reported net income or earnings-per- share for future years. The fair value of each option grant for the Option Plan is estimated on the date of grant using the Black-Scholes multiple options pricing model with the following weighted average assumptions by year:
2000 1999 1998 ---- ---- ---- Risk-free interest rate 5.39 % 5.00 % 5.38 % Expected term of option from vest date 0.97 0.61 0.53 Expected volatility 60.00 % 61.00 % 50.30 % Expected dividend yield -- -- --
Had compensation cost for the Option Plan been determined based on the fair value at the grant date for the awards consistent with the provisions of SFAS 123, the Company's net income and net income per share for the years ended March 31, 2000, 1999 and 1998 would have been reduced to the pro forma amounts indicated below (in thousands except per share data):
2000 1999 1998 ---- ---- ---- Net Income As reported $8,475 $5,334 $8,817 Pro forma $7,015 $4,261 $7,894 Dilutive As reported $ 0.68 $ 0.44 $0.71 Earnings per share Pro forma $ 0.56 $ 0.35 $0.64
SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 7.COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases its four-inch manufacturing facility under an operating lease that expires in 2001, from a corporation owned by one of the Company's directors. Under the lease, the Company is responsible for maintenance costs, including real property taxes, utilities and other costs. As part of the acquisition of the Orbit's six inch wafer fabrication operation, the Company assumed an operating lease for a manufacturing facility. The lease expires on April 30, 2004 with two (2) options to extend the term of the lease, each for a period of five (5) years. Monthly rent during the entire term is $68,000 which is adjusted annually based on Bureau of Labor Statistic's Consumer Price Index. The Company is responsible for maintenance costs, including real property taxes, utilities, insurance and other costs. In addition, following the acquisition of the six inch wafer fabrication facility, the Company assumed an existing equipment operating lease from Orbit Semiconductor. This operating lease consists of four different lease schedules representing four groups of equipment. Operating lease expenses were approximately $773,000 and $129,000 in fiscal years 2000 and 1999, respectively. Future minimum lease payments under all operating leases at March 31, 2000 are as follows (in thousands): Fiscal Year 2001 2002 2003 2004 2005 Total ---- ---- ---- ---- ---- ----- $ 1,788 $ 1,038 $ 816 $ 816 $ 68 $ 4,526 Future sublease income under all operating leases at March 31, 2000 are as follows: Fiscal Year 2001 2002 2003 2004 2005 Total ---- ---- ---- ---- ---- ----- $ 600 $ 403 -- -- -- $ 1,003 Facilities rental expenses, net of facilities sublease, were approximately $944,000, $462,000, and $ 315,000 (net of facilities sublease income of $260,000, $49,000, and $49,000) in fiscal years 2000, 1999, and 1998, respectively. Of the total rental expenses paid, $388,000, $375,000, and $362,000 were paid to the Company's director in fiscal 2000, 1999, and 1998 respectively. In addition to the foregoing, from time to time the Company is subject to possible claims or assessments from third parties arising in the normal course of business. Management has reviewed such possible claims and assessments with legal counsel and believes that it is unlikely that they will result in a material adverse impact on the Company's financial position or results of operations. 8. SEGMENT INFORMATION The Company operates in one business segment. The Company's principal markets are in the United States, Europe and Asia. Following is a summary of the geographic information related to revenues for the years ended March 31, 2000, 1999, and 1998:
(in thousands) 2000 1999 1998 Revenues United States $ 45,148 $ 24,608 $ 24,595 Europe 9,372 11,379 10,732 Asia 14,790 12,215 13,338 Other 1,528 2,519 4,041 -------- -------- -------- Total Revenue $ 70,838 $ 50,721 $ 52,706 ======== ======== ========
International sales are entirely comprised of export sales. The Company's assets are located in the United States. The Company does not segregate information related to operating income generated by its export sales. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) SCHEDULE II
SUPERTEX, INC. VALUATION AND QUALIFYING ACCOUNTS (in thousands) Balance at Charged to Balance at Beginning Costs and Write-Off End of Period Expenses of Accounts of Period Year ended March 31, 1998 Allowance for sales returns......$ 377 $ 1,333 $1,167 $ 543 Allowance for doubtful accounts.. 148 240 231 157 Inventory allowances............. 644 277 47 874 Year ended March 31, 1999 Allowance for sales returns......$ 543 $ 1,932 $2,102 $ 373 Allowance for doubtful accounts.. 157 485 (5) 647 Inventory allowances............. 874 1,300 727 1,447 Year end March 31, 2000 Allowance for sales returns......$ 373 2,975 2,503 $ 845 Allowance for doubtful accounts... 647 175 301 521 Inventory allowances......... 1,447 (458) 133 856
SUPERTEX, INC. EXHIBIT INDEX (The Registrant will furnish to any shareholders who so request a copy of this Annual Report on Form 10-K and any Exhibit listed below, provided that the Registrant may require payment of a reasonable fee not to exceed its expense in furnishing such information.) ExhibitExhibit Description 2.1(1) Agreement for purchases and sale of assets by and between Supertex, Inc. and Orbit Semiconductor dated January 16, 1999. 3.1(2) Restated Articles of Incorporation of Registrant filed May 21, 1980. 3.2(2) Certificate of Amendment of Articles of Incorporation filed April 16, 1981. 3.3(2) Certificate of Amendment of Articles of Incorporation filed September 30, 1983. 3.4(5) Bylaws of Registrant, as amended. 10.2(2) Lease for 1225 and 1231 Bordeaux Drive, Sunnyvale, California, dated January 25, 1991, between Fortuna Realty Company, as Lessor, and Registrant, as Lessee. 10.2a Lease for 71 Vista Montana, San Jose, California, dated December 7, 1988, between Sobrato Development Companies #871, a California Limited Partnership, as Lessor, and Paradigm Technology, Inc., a California Corporation, as Lessee. 10.2b Lease Assignment agreement for 71 Vista Montana, San Jose, California, dated February 1, 1999 among Orbit Semiconductor, as seller, Sobrato Development Companies #871, as landlord, and Supertex, Inc., as buyer. 10.2c Master Lease Agreement #06714-00300 dated September 15, 1995 between NationsBanc Leasing Corporation, as Lessor, and Orbit Semiconductors, Inc., as lessee. 10.2d Transfer and Assumption Agreement for leased equipment located at 71 Vista Montana, San Jose, California dated January 22, 1999 by and among Orbit Semiconductor, Inc., as Transferor, Supertex, Inc., as Transferee, and NationsBanc Leasing Corporation, as Lessor. 10.6(2) 1981 Stock Option Plan, as amended, with form of stock option agreement. 10.6a(5) 1991 Stock Option Plan, as amended, with form of stock option agreement. 10.6b(6) 1991 Stock Option Plan, as amended, with form of stock option agreement. 10.7(2) Profit Sharing Plan. 10.21(3) Certificate of Amendment of Articles of Incorporation filed October 14, 1988. 10.22(4) Agreement with Texas Instruments Inc. dated May 31, 1991.* 23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants. 24.1 Power of Attorney. 27.1 Financial Data Schedule. (1) Incorporated by reference to the exhibit of the same number filed with current report on form 8-K dated January 19, 1999. (2) Incorporated by reference to exhibit of same number of Registrant's Registration Statement on Form S-1 (File No. 2-86898), which became effective December 6, 1983. (3) Incorporated by reference to exhibit filed with Quarterly Report on Form 10-Q for period ended October 1, 1988. (4) Incorporated by reference to exhibit filed with Annual Report on Form 10-K for year ended March 31, 1991. (5) Incorporated by reference to exhibit included in Registrant's Registration Statement on Form S-8 (File No. 33-43691) which became effective September 1, 1995. (6) Incorporated by reference to exhibit included in Registrant's Registration Statement on Form S-8 (File No. 33-43691) which became effective September 29, 1999. * Confidential treatment of portions of this exhibit was granted by order dated August 12, 1991. EX-27.1 2 0002.txt ARTICLE 5 FIN. DATA SCHEDULE FOR YEAR END 10-K
5 1000 YEAR MAR-31-2000 MAR-31-2000 22,584 11,592 16,109 1,366 15,083 67,304 38,029 23,139 86,623 14,354 0 0 0 23,167 49,102 86,623 70,838 70,838 44,976 44,976 15,448 175 0 12,649 4,174 8,475 0 0 0 8,475 0.70 0.68
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