-----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, MFXdsnp7D+dklK3k9cU34P6OwGac2RFtanD80AiERX7yoPF9e9fo+GAtZRJLUZql t3wPMWngu80BzwcP/ssTzA== 0000730000-98-000005.txt : 19981030 0000730000-98-000005.hdr.sgml : 19981030 ACCESSION NUMBER: 0000730000-98-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981029 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPERTEX INC CENTRAL INDEX KEY: 0000730000 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 948328535 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12718 FILM NUMBER: 98732872 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 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 September 30, 1998 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 of (IRS Employer Identification #) 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 October 19, 1998, 12,0050,988 shares of the Registrant's common stock were issued and outstanding. Total number of pages: 11 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 .................. 7 PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders .. 9 Item 6. Exhibits, Financial Statement Schedule and Reports on Form 8-K .............................. 9 PART I - FINANCIAL INFORMATION Item 1. Financial Statements SUPERTEX, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts)
Three-months Ended, Six-months Ended, ------------------ ---------------- September 30, September 30, ------------ ------------ 1998 1997 1998 1997 ---- ---- ---- ---- Net sales $ 12,650 $ 13,613 $ 25,651 $ 25,925 -------- -------- -------- -------- Cost and expenses: Cost of sales 6,508 7,468 13,415 14,147 Research and development 1,478 1,425 2,979 2,801 Selling, general and administrative 1,785 1,603 3,477 3,237 -------- -------- -------- -------- Total costs and expenses 9,771 10,496 19,871 20,185 -------- -------- -------- -------- Income from operations 2,879 3,117 5,780 5,740 Interest income 483 373 953 717 Other income (expense), net (13) (2) (42) 26 -------- -------- -------- -------- Income before provision for income taxes 3,349 3,488 6,691 6,483 Provision for income taxes 1,139 1,186 2,274 2,204 -------- -------- -------- -------- Net income $ 2,210 $ 2,302 $ 4,417 $ 4,279 ======== ======== ======== ======== Net income per share: Basic $ 0.18 $ 0.19 $ 0.37 $ 0.35 ======== ======== ======== ======== Diluted $ 0.18 $ 0.19 $ 0.36 $ 0.35 ======== ======== ======== ======== Shares used in per share computation Basic 12,066 12,064 12,082 12,057 ======== ======== ======== ======== Diluted 12,258 12,421 12,290 12,400 ======== ======== ======== ======== See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED BALANCE SHEETS (unaudited)
Sept. 30, 1998 Mar. 31, 1998 -------------- ------------- (in thousands) ASSETS Current Assets: Cash and cash equivalents $ 15,827 $ 24,556 Short term investments 20,989 6,956 Trade accounts receivable, net of allowances of $847 and $700 8,104 9,784 Other receivables 334 322 Inventories 10,367 10,263 Deferred income taxes 2,181 2,181 Prepaid expenses 204 218 -------- -------- Total current assets 58,006 54,280 Property and equipment, net 11,692 12,349 -------- -------- TOTAL ASSETS $ 69,698 $ 66,629 ======== ========
LIABILITIES
Current liabilities: Trade accounts payable and accrued liabilities $ 5,947 $ 6,881 Income taxes payable 1,351 1,080 Deferred revenue on shipments to distributors 1,145 1,451 -------- -------- Total current liabilities 8,443 9,412 -------- -------- 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 12,050 and 12,097 shares 20,689 20,710 Accumulated other comprehensive income 106 3 Retained earnings 40,460 36,504 -------- -------- Total shareholders' equity 61,255 57,217 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 69,698 $ 66,629 ======== ======== See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)
Six Months Ended ---------------- Sept. 30, 1998 Sept. 30, 1997 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,417 $ 4,279 -------- -------- Non-cash adjustments to net income: Depreciation and amortization 1,668 1,120 Provision for doubtful accounts and sales returns 895 679 Provision for excess and obsolete inventories (161) (30) Changes in operating assets and liabilities: Accounts and other receivables 773 (2,059) Inventories 57 (298) Prepaid expenses 14 48 Trade accounts payable and accrued expenses (934) (357) Income taxes payable 271 719 Deferred revenue on shipments to distributors (306) 381 -------- -------- ------- ------- Total adjustments 2,277 203 -------- -------- ------- ------- Net cash provided by operating activities 6,694 4,482 -------- -------- ------- ------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (1,011) (1,443) Purchases of short term investments (21,409) (14,188) Proceeds from maturities of short term investments 7,478 8,153 -------- -------- ------- ------- Net cash used in investing activities (14,942) (7,478) -------- -------- ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 82 205 Repurchase of stock (563) (208) -------- -------- ------- ------- Net cash used in financing activities (481) (3) -------- -------- ------- ------- NET DECREASE IN CASH AND CASH EQUIVALENTS (8,729) (2,999) CASH AND CASH EQUIVALENTS: Beginning of period 24,556 19,166 -------- -------- End of period $ 15,827 $ 16,167 ======== ======== 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 six months ended September 30, 1998 and 1997, 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, 1998, 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): Sept. 30, 1998 March 31, 1998 -------------- -------------- (unaudited) Finished goods .............................. $ 3,509 $ 2,919 Work-in-process ............................. 6,130 6,200 Raw materials ............................... 728 1,144 ------- ------- $10,367 $10,263 ======= ======= Note 3 - ------ Net Income per Share Basic 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. For Three-months Ended, For Six-months Ended, September 30, September 30, 1998 1997 1998 1997 ---- ---- ---- ---- BASIC: Weighted average shares outstanding for the period 12,066 12,064 12,082 12,057 Net income $ 2,210 $ 2,302 $ 4,417 $ 4,279 -------- -------- -------- -------- Net income per share $ 0.18 $ 0.19 $ 0.37 $ 0.35 ======== ======== ======== ======== DILUTED: Weighted average shares outstanding for the period 12,066 12,064 12,082 12,057 Common stock equivalents 192 357 208 343 ------ ------ ------ ------ Total common and common equivalent shares 12,258 12,421 12,290 12,400 ------ ------ ------ ------ Net income $ 2,210 $ 2,302 $ 4,417 $ 4,279 ------- ------- ------ ------ Net income per share $ 0.18 $ 0.19 $ 0.36 $ 0.35 ======= ======= ======= ======= Note 4 - ------ Comprehensive Income The Company has adopted the provisions of Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income", effective April 1, 1998. The statement requires the disclosure of comprehensive income and its components on the Statement of Income or in a full set of general-purpose financial statements. Comprehensive income is defined as net income plus revenues, expenses, gains and losses that, under generally accepted accounting principles are excluded from net income. For the quarter ended September 30, 1998 and 1997, comprehensive income approximated net income. 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, 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 September 30, 1998 were $12,650,000, a 7% decrease from $13,613,000 of the same quarter last year. The sales decline was primarily due to price concessions given to our foreign customers for large exchange rate differentials and also due to slower sales in our digital integrated circuit family. For the six months ended September 30, 1998, net sales declined slightly by 1% to $25,651,000 from $25,925,000 when compared with the same period of the prior year. In this quarter as well as the six months period, approximately 56% of the Company's net sales were derived from customers outside the United States. All of the company's sales to international customers were denominated in U.S. currencies. Gross Margin: As a percent of sales, the Company's gross margin for the quarter and the six month periods ended September 30, 1998 increased to 49% and 48% respectively, compared with the 45% gross margin for the same quarter and six month periods of last fiscal year, primarily due to cost control measures taken. Research and Development: Research and development expenses increased to 12% of net sales for the quarter and six months ending September 30, 1998. This compares with R&D expenses of 11% of net sales for the same quarter and six month periods of last year. Dollar expenditures increased slightly to $1,478,000 and $2,979,000 for the quarter and six months ended September 30, 1998 respectively, as compared with $1,425,000 and $2,801,000 for the same periods of the last fiscal year. The increase was related to new product development and the Company expects that new product development expenses will continue to increase during this fiscal year. Selling, General and Administrative: Expenses for selling, general and administrative were higher at $1,785,000, or 14% of net sales as compared with $1,603,000, or 12%, in the same quarter of last fiscal year. For the six months ended September 30, 1998, selling, general and administrative expenses were at 14% of net sales compared to 13% for the same period last year. The percentage increase in this category was due to an increase in bad debts expense. Interest Income: Interest income for this quarter were $483,000 compared with $373,000 last year. Six months interest income was $953,000, a 33% increase from $717,000 of the same period of last fiscal year. Higher amount of funds available for investments contributed to this increase. Provision for Income Taxes: The Company's effective tax rate for the three- and six- months ended June 30, 1998 remained at 34%, same as last fiscal year. Overview: Total assets grew to $69,698,000 as of September 30, 1998, up from $66,629,000 from quarter ending March 31, 1998. The increase is due to favorable operating results for the quarter. Liquidity and Capital Resources On September 30, 1998, the Company had $36,816,000 in cash, cash equivalents, and short term investments, compared with $31,512,000 on March 31, 1998. This increase is mostly due to positive cash flow from operating activities of $6,694,000 consisting principally of net income of $4,417,000. Net cash used in investing activities as of the second quarter of fiscal year 1999 was $14,942,000 compared to $7,478,000 for the same period last year. Net cash used in short-term investment activities totaled $13,931,000, and $1,011,000 was used in the purchase of equipment. Net cash used in financing activities was $481,000. Repurchase of stocks accounted for $563,000, which was offset by proceeds from stock option exercises of $82. The Company anticipates that 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 year 1999. Year 2000 Compliance Risks: The Company is 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" 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 cause a system to fail. As a result, many companies' software, computer systems and other equipment may need to be upgraded or replaced in order to comply with such "Year 2000" requirements. The Company is utilizing both internal and external resources to identify, correct or reprogram, and test the systems for year 2000 compliance. It has initiated its Year 2000 compliance program and has completed the process of identifying the programs and systems that could be affected by the Year 2000 issue. The Company has also developed an implementation plan to address the potential exposures related to the impact of the millennium. This plan includes modification or conversion of certain existing systems with new systems in order to comply with such "Year 2000" requirements. It is expected that the evaluation, remediation, and testing of all necessary modifications for compliance will be completed by December 31, 1999. The financial impact of making the required systems changes cannot be known precisely at this time while the total cost of Year 2000 systems assessments and modifications will be funded through cash flows from operations. Based upon its evaluation to date, the Company believes that the Year 2000 issue will not have a material impact on the operations of the Company. However, if such modifications and conversions are not made, or are not completed in a timely fashion, the Year 2000 issue will have a material adverse effect on the Company's operations, business, financial condition and operating results. The Company has relationships with, and is to varying degrees dependent upon, a large number of third parties that provide information, goods and services to the Company. If significant numbers of these third parties experience failures in their systems or equipment due to Year 2000 non-compliance, it could materially adversely affect the Company's ability to process transactions, manufacture products, or engage in similar normal business activities. While some of these risks are outside the control of the Company, the Company has initiated formal communications with all its primary vendors and service providers to determine if plans are being developed or are already in place to address processing of transactions in the year 2000. Meanwhile, the Company's net sales could be materially adversely affected if the Company's customers or potential customers reallocate spending from the Company's products to their efforts to resolve the Year 2000 issue. PART II - OTHER INFORMATION Item 4. - Submission of Matters to a Vote of Security Holders The Company's Annual Shareholders' Meeting was held on August 7, 1998 at 10:00 a.m., at which the following matters were acted upon: Votes Votes Withheld/ Broker ----- --------------- ------ Matter Acted Upon Votes For Against Abstentions Non-Votes ----------------- --------- ------- ----------- --------- 1. Election of Directors Henry C. Pao 10,824,023 0 53,632 0 Yunni Pao 10,823,023 0 54,632 0 Benedict C. K. Choy 10,824,023 0 53,632 0 Frank C. Pao 10,823,023 0 54,632 0 Richard E. Siegel 10,823,023 0 54,632 0 2. Ratification of PricewaterhouseCoopers LLP as independent accountants for the Company for fiscal year ending March 31,1999. 10,855,294 8,015 14,346 0 Item 6. - Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule (b) Reports on Form 8-K. None. 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: October 29, 1998 By: /s/ Henry C. Pao --------------------------- Dr. Henry C. Pao, President (Principal Executive and Financial Officer) EX-27 2 ARTICLE 5 FINANCIAL DATA SCHEDULE FOR 2ND QTR. 10-Q
5 1,000 6-MOS MAR-30-1999 SEP-30-1998 15,827 20,989 8,438 847 10,367 58,006 27,646 15,954 69,698 5,947 0 0 0 20,795 40,460 69,698 25,651 25,651 13,415 19,871 29 192 0 6,691 2,274 4,417 0 0 0 4,417 .37 .36
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