10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 June 30, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

COMMISSION FILE NUMBER 000-26124

IXYS CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	77-0140882
(State or other jurisdiction	(I.R.S. Employer Identification No.)
of incorporation or organization)

1590 BUCKEYE DRIVE

MILPITAS, CALIFORNIA 95035-7418

(Address of principal executive offices and Zip Code)

(408) 457-9000

(Registrant’s telephone number, including area code)

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 ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

The number of shares of the registrant’s common stock, $0.01 par value, outstanding as of July 26, 2016 was 31,458,652.

IXYS CORPORATION

FORM 10-Q

June 30, 2016

INDEX

	Page
PART I — Financial Information		3
Item 1. Financial Statements		3
Unaudited Condensed Consolidated Balance Sheets		3
Unaudited Condensed Consolidated Statements of Operations		4
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)		5
Unaudited Condensed Consolidated Statements of Cash Flows		6
Notes to Unaudited Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		28
Item 4. Controls and Procedures		28
PART II — Other Information		29
Item 1. Legal Proceedings		29
Item 1A. Risk Factors		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		42
Item 3. Defaults Upon Senior Securities		42
Item 4. Mine Safety Disclosures		42
Item 5. Other Information		42
Item 6. Exhibits		42

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	June 30,			March 31,
	2016			2016
ASSETS
Current assets:
Cash and cash equivalents	$	151,393		$	155,806
Restricted cash		272			277
Accounts receivable, net		41,063			38,440
Inventories		85,656			89,604
Prepaid expenses and other current assets		4,028			4,203
Total current assets		282,412			288,330
Property, plant and equipment, net		44,325			42,623
Intangible assets, net		6,590			7,607
Goodwill		42,313			42,355
Deferred income taxes		27,825			28,024
Other assets		14,171			13,762
Total assets	$	417,636		$	422,701
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of loans payable		1,076			1,804
Accounts payable		12,272			11,416
Accrued expenses and other current liabilities		23,575			21,290
Total current liabilities		36,923			34,510
Long term loans, net of current portion		77,940			85,253
Pension liabilities		15,620			16,307
Other long term liabilities		7,197			7,336
Total liabilities		137,680			143,406
Commitments and contingencies (Note 16)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized: 5,000,000 shares; none issued and outstanding		—			—
Common stock, $0.01 par value:
Authorized: 80,000,000 shares; 38,269,389 issued and 31,458,652 outstanding at June 30, 2016 and 38,214,158 issued and 31,375,524 outstanding at March 31, 2016		383			382
Additional paid-in capital		215,354			214,045
Treasury stock, at cost: 6,810,737 common shares at June 30, 2016 and 6,838,634 common shares at March 31, 2016		(61,592	)		(61,845	)
Retained earnings		148,727			146,979
Accumulated other comprehensive loss		(22,916	)		(20,266	)
Total stockholders’ equity		279,956			279,295
Total liabilities and stockholders’ equity	$	417,636		$	422,701

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended June 30,
	2016			2015
Net revenues	$	80,638		$	82,047
Cost of goods sold		56,644			56,445
Gross profit		23,994			25,602
Operating expenses:
Research, development and engineering		7,910			7,683
Selling, general and administrative		10,038			10,636
Amortization of acquisition-related intangible assets		1,017			1,579
Total operating expenses		18,965			19,898
Operating income		5,029			5,704
Other income (expense):
Interest income		62			47
Interest expense		(635	)		(314	)
Other income (expense), net		815			(790	)
Income before income tax provision		5,271			4,647
Provision for income tax		(2,252	)		(1,662	)
Net income	$	3,019		$	2,985
Net income per share:
Basic	$	0.10		$	0.09
Diluted	$	0.09		$	0.09
Cash dividends per common share	$	0.040		$	0.035
Weighted average shares used in per share calculation:
Basic		31,401			31,746
Diluted		32,001			32,733

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	Three Months Ended June 30,
	2016			2015
Net income	$	3,019		$	2,985
Foreign currency translation adjustments		(2,825	)		2,692
Changes in market value of investments:
Changes in unrealized gains (losses), net of tax of $45 and $(78)		85			(117	)
Reclassification adjustment for net losses (gains) realized in net income, net of tax of $61		90			—
Net change in market value of investments		175			(117	)
Total comprehensive income (loss)	$	369		$	5,560

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

IXYS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended
	June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	3,019		$	2,985
Adjustments to reconcile net income to net cash provided by operating activities, net of assets acquired and liabilities assumed:
Depreciation and amortization		2,832			3,784
Provision for receivable allowances		1,610			1,407
Net change in inventory provision		425			300
Stock-based compensation		855			739
Loss (gain) on investments		(169	)		147
Foreign currency adjustments on intercompany amounts and other non-cash items		(111	)		248
Changes in operating assets and liabilities, net of business acquired:
Accounts receivable		(4,652	)		(630	)
Inventories		2,083			611
Prepaid expenses and other current assets		130			(779	)
Accounts payable		559			609
Accrued expenses and other liabilities		1,113			329
Pension liabilities		(198	)		(301	)
Net cash provided by operating activities		7,496			9,449
Cash flows from investing activities:
Change in restricted cash		5			(5	)
Purchase of businesses, net of cash and cash equivalents acquired and installment payments		—			(14,571	)
Purchases of plant and equipment		(3,477	)		(3,696	)
Net cash used in investing activities		(3,472	)		(18,272	)
Cash flows from financing activities:
Principal payments on capital lease obligations		—			(321	)
Repayments of loans and notes payable		(7,970	)		(449	)
Proceeds from loans		—			3,317
Proceeds from employee equity plans		694			2,468
Net cash provided by (used in) financing activities		(7,276	)		5,015
Effect of exchange rate fluctuations on cash and cash equivalents		(1,161	)		860
Net decrease in cash and cash equivalents		(4,413	)		(2,948	)
Cash and cash equivalents at beginning of period		155,806			121,164
Cash and cash equivalents at end of period	$	151,393		$	118,216

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed consolidated balance sheet as of March 31, 2016 has been derived from our audited consolidated balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2016, or fiscal 2016, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year. Our fiscal years end March 31. References to any numerically identified year preceded by the word “fiscal” are references to the year ending on March 31 of such numerically identified year.

2. Recent Accounting Pronouncements and Accounting Changes

In May 2014, Financial Accounting Standards Board, or FASB, issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients, and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In March 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers relating to revenue recognition to clarify the implementation guidance on principal versus agent considerations and to address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of the new revenue recognition standard. We are currently evaluating the impact of these amendments on our financial statements.

In April 2016, FASB issued an amended guidance to clarify the following two aspects relating revenue recognition: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Before an entity can identify its performance obligation in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. The amendments include implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property or a right to access the entity’s intellectual property. The amendments are intended to improve the operability and understandability of the licensing implementation guidance. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

In May 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers which would affect the narrow aspects of Topic 606, including assessing the collectibility criterion and accounting for contracts that do not meet the criteria for identifying the contracts with a customer, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

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In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330, Inventory, for inventory that is measured using the methods other than last-in, first-out, or LIFO, and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for annual reporting periods beginning after December 15, 2016, and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

In January 2016, the FASB issued authoritative guidance that modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under Accounting Standards Codification, or ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our consolidated financial statements.

In February 2016, FASB issued amended guidance for lease arrangements, which requires lessees to recognize the followings for all leases with terms longer than 12 months: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The amendment is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

In March 2016, FASB issued amended guidance to simplify the transition to the equity method of accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Additionally, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings at the point an investment qualifies for the equity method. The amended guidance is effective for financial statements issued for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. It should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

In March, 2016, FASB issued amended guidance which simplifies several aspects of the accounting for employee share-based payment awards, including forfeitures, employer tax withholding on share-based compensation and excess tax benefits or deficiencies. The amended guidance also clarifies the statement of cash flows presentation for share-based awards. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

In June 2016, FASB issued amended guidance which replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect financial assets and net investment in leases that are not accounted for at fair value through net income. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

3. Business Combinations

RadioPulse, Inc.

On May 1, 2015, we acquired RadioPulse, Inc., or RadioPulse, for a total consideration of $15.7 million. Based in South Korea, RadioPulse is a fabless semiconductor company that develops, manufactures and sells wireless network technology solutions based on the ZigBee^® protocol, which combines microcontrollers and radio frequency devices. RadioPulse’s solutions are designed to enable a broad range of power-sensitive applications in the industrial, medical, consumer, smart grid and Internet of Things, or IoT, markets. RadioPulse offers a complementary product portfolio to our product lines. The consideration included cash consideration paid at closing of $14.7 million and $1.0 million related to an adjustment to eliminate debt owed to us for funds advanced prior to closing. The acquisition also included potential earnout payments aggregating up to $6.0 million payable over three years based on certain financial thresholds related to net revenues, gross profit and net income in calendar years 2015, 2016 and 2017. Based on our valuation, the fair value of the liability for the earnout payment was estimated to be nil as of June 30, 2016 and March 31, 2016. In connection with the acquisition, we incurred and expensed $248,000 in legal and consulting costs and $249,000 in acquisition-related compensation costs during fiscal 2016.

8

The following table summarizes the values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Purchase Consideration Allocation
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		547
Identifiable intangible assets		2,867
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(1,926	)
Total identifiable net liabilities		771
Goodwill		14,887
Total purchase consideration	$	15,658

Identifiable intangible assets consisted of developed intellectual property, in-process research and development expenses, customer relationships, and contract backlog. The value reflected in the table represents the purchase price allocation. The valuation of the acquired intangibles was classified as a level 3 measurement under the fair value measurement guidance because the valuation was based on significant unobservable inputs and involved management judgment and assumptions about market participants and pricing. We did not recognize any liability with respect to the contingent consideration based upon our analysis.

Identified intangible assets resulting from the RadioPulse acquisition consisted of the following (in thousands):

					Estimated
	Fair Value		Amortization		Useful Life
	(In thousands)		Method		(In months)
			(unaudited)
Developed intellectual property	$	1,005		Accelerated		60
In-process research and development expenses (1)		1,188		Straight-line		60
Customer relationships		500		Accelerated		36
Contract backlog		174		Straight-line		6
Total	$	2,867

(1) Amortization starts after the completion of the research and development activities of the related projects.

In determining the fair value of the acquired intangible assets, we determined the appropriate unit of measure, the exit market and the highest and best use for the assets. The income approach was used to estimate the fair value. The income approach indicates the fair value of an asset based on the value of the cash flows that the asset can be expected to generate in the future through a discounted cash flow method. The income approach was used to determine the fair values of developed intellectual property, in-process research and development expenses, contract backlog and customer relationships. The goodwill arising from the acquisition was largely attributable to the synergies expected to be realized after our acquisition and integration of RadioPulse and to the workforce acquired in the transaction. The goodwill is not deductible for tax purposes.

The results of operations and financial position of RadioPulse were immaterial compared to our financial statements and therefore pro-forma financial statements have not been separately presented.

4. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of non-performance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1 — Quoted prices for identical instruments in active markets.

9

Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 — Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable.

Fair Value Measurements on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of June 30, 2016 and March 31, 2016 (in thousands):

	June 30, 2016 (1)						March 31, 2016 (1)
			Fair Value Measured at						Fair Value Measured at
			Reporting Date Using						Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	89,440	$	89,440	$	—	$	115,974	$	115,974	$	—
Marketable equity securities (3)		1,879		1,879		—		1,749		1,749		—
Auction rate preferred securities (3)		350		—		350		350		—		350
Total Assets Measured at Fair Value	$	91,669	$	91,319	$	350	$	118,073	$	117,723	$	350

(1) We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.

(2) Included in “Cash and cash equivalents” on our unaudited condensed consolidated balance sheets.

(3) Included in “Other assets” on our unaudited condensed consolidated balance sheets.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates. We review any impairment to determine whether it is other than temporarily impaired. This review is based on factors such as length of time of impairment, extent to which the fair value is below the cost basis, financial conditions of the issuer of the security, our expectations of future recoveries and our ability and intent to hold or sell the securities. Based on our review, we recognized an other than temporary impairment loss of $151,000 and $0 in marketable equity securities during the three months ended June 30, 2016 and June 30, 2015 respectively.

From time to time, we use derivative instruments to manage exposure to changes in interest rates and currency exchange rates. The fair values of these instruments are recorded on the balance sheets. The changes in the fair value of these instruments are recorded in the current period’s statement of operations and are included in other income (expense), net. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2. We held no derivative instruments at June 30, 2016 and March 31, 2016.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. Our ARPS have credit ratings of A+, are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 200 percent. Accordingly, the remaining ARPS balance was categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of June 30, 2016 and March 31, 2016. We currently believe that the ARPS values are not impaired and as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at amounts that approximate fair value in our unaudited condensed consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

Our debt, which primarily consists of loans from banks, approximated fair value as the interest rates either adjusted according to the market rates or the interest rates approximated the market rates. The estimated fair value of our debt was approximately $79.0 million and $87.1 million as of June 30, 2016 and March 31, 2016, respectively. Our debt is categorized as Level 2 for fair value measurement. Our pension liabilities, net of plan assets approximated fair value. See Note 10, “Pension Plans” for a discussion of pension liabilities.

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The fair value of contingent consideration for a business acquisition is classified as Level 3 estimate. See Note 3, “Business Combinations” for a discussion of fair value of contingent consideration.

5. Accounts Receivable

Accounts receivable consist of the following (in thousands):

	June 30, 2016			March 31, 2016
	(unaudited)
Accounts receivable, gross	$	43,751		$	41,219
Allowances		(2,688	)		(2,779	)
Accounts receivable, net	$	41,063		$	38,440

6. Other Assets

Other assets consist of the following (in thousands):

	June 30, 2016		March 31, 2016
	(unaudited)
Marketable equity securities	$	1,879	$	1,749
Auction rate preferred securities		350		350
Long-term equity method investments		11,250		10,977
Other items		692		686
Total	$	14,171	$	13,762

7. Inventories

Inventories consist of the following (in thousands):

	June 30, 2016		March 31, 2016
	(unaudited)
Raw materials	$	18,252	$	18,269
Work in process		40,285		41,549
Finished goods		27,119		29,786
Total	$	85,656	$	89,604

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30,		March 31,
	2016		2016
	(unaudited)
Uninvoiced goods and services	$	11,152	$	8,824
Compensation and benefits		7,204		7,540
Income taxes		2,690		2,066
Commissions, royalties and other		2,529		2,860
Total	$	23,575	$	21,290

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9. Borrowing Arrangements

Revolving Credit Agreement

On November 20, 2015, we entered into a Revolving Credit Agreement with a syndicate of banks for a line of credit of $125.0 million. The agent for the banks is Bank of the West, or BOTW. The obligations are guaranteed by four of our subsidiaries. The loan is collateralized pursuant to a Contingent Collateral Agreement, under which the assets of the parent company and the four subsidiaries could be subject to security interest for the benefit of the banks in the event of a loan default. The Revolving Credit Agreement expires on November 20, 2017.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin or an alternative base rate plus a margin. The margin can range from 0.75% to 2.5%, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The applicable interest rate as of June 30, 2016 was 2.56%. An unused commitment fee is also payable. It ranges from 0.25% to 0.625%, depending on leverage. In relation to the execution of the credit agreement, we incurred loan costs that were deferred and reduced our “Long term loans, net of current portion” on our unaudited consolidated balance sheets. Those costs are being amortized over the two-year life of the credit agreement. The unamortized balance at June 30, 2016 and March 31, 2016 was $257,000 and $304,000, respectively.

The terms of the facility impose restrictions on the company’s ability to undertake certain transactions, to create liens on assets and to incur subsidiary indebtedness. In addition, the credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At June 30, 2016, we complied with all of these financial covenants.

At June 30, 2016 and March 31, 2016, the outstanding principal balances under the credit agreement were $73.0 million and $80.0 million, respectively.

The credit agreement also includes a $10.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

In April 2015, we entered into a loan with IKB Deutsche Industriebank, or IKB. Under the agreement, we borrowed €6.5 million, or about $7.2 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $258,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. Compliance with these covenants is required annually at March 31. We complied with all of these financial covenants at March 31, 2016. The loan may be prepaid in whole or in part with a modest penalty. The loan is also collateralized by a security interest in the facility in Lampertheim, Germany. At June 30, 2016, the outstanding principal balance was €5.3 million, or about $5.9 million. At March 31, 2016, the outstanding principal balance was €5.6 million, or about $6.3 million.

Loans Assumed from Business Acquisitions

Our outstanding balances relating to loans assumed upon business acquisitions at June 30, 2016 and March 31, 2016 were $344,000 and $1.1 million, respectively. These loans consisted of certain short-term facilities from financial institutions and loans from government agencies to support research and development activities.

10. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees, and one for Philippine employees. We deposit funds for the United Kingdom and Philippine plans with financial institutions and make payments to former German employees directly. We accrue for the unfunded portion of the obligations. The measurement date for projected benefit obligations and plan assets is March 31. As of June 30, 2016, the German defined benefit plan was completely unfunded and we accrued for its obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. We expect to contribute approximately $1.1 million to the United Kingdom and the Philippines plans in the fiscal year ending March 31, 2017.

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The net periodic pension expense includes the following components (in thousands):

	Three Months Ended
	June 30,
	2016			2015
	(unaudited)
Service cost	$	28		$	26
Interest cost on projected benefit obligation		352			368
Expected return on plan assets		(323	)		(438	)
Recognized actuarial loss		48			45
Net periodic pension expense	$	105		$	1

Information on Plan Assets

We report and measure the plan assets of our defined benefit pension plans at fair value. The table below sets forth the fair value of our plan assets as of June 30, 2016 and March 31, 2016, using the same three-level hierarchy of fair-value inputs described in Note 4, “Fair Value” (in thousands):

	June 30, 2016						March 31, 2016
Description	Level 1		Level 2		Total		Level 1		Level 2		Total
	(unaudited)						(unaudited)
Cash and cash funds	$	17	$	—	$	17	$	121	$	—	$	121
Equity		398		—		398		351		—		351
Fixed interest		1,326		94		1,420		1,225		96		1,321
Mutual funds		13,156		13,203		26,359		13,527		13,394		26,921
Total	$	14,897	$	13,297	$	28,194	$	15,224	$	13,490	$	28,714

11. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2009 Equity Incentive Plan, the 2011 Equity Incentive Plan, and the 2013 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On August 30, 2013, our stockholders approved the 2013 Equity Incentive Plan, or the 2013 Plan, under which 2,000,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan, the 2011 Plan and the 2013 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Stock Awards

Stock awards, denominated restricted stock under the 2009 Plan and the 2011 Plan, may be granted to any employee, director or consultant under the Plans. Pursuant to a stock award, we will issue shares of common stock. Shares that are subject to the restriction will be released from restriction if certain requirements, including continued performance of services, are met.

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Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and non-employee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and non-employee directors under the Plan. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

The 2016 Equity Incentive Plan

On June 9, 2016, the Board of Directors approved the adoption of the 2016 Equity Incentive Plan, or the 2016 Plan, under which 2,000,000 shares of the common stock will be reserved for the grant of stock options and other equity incentives. As of June 30, 2016, the 2016 Plan is subject to our stockholders’ approval.

Employee Stock Purchase Plan

The Board of Directors has approved the Amended and Restated 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved a total of 1,550,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee’s eligible compensation. During the three months ended June 30, 2016, there were 55,231 shares purchased under the Purchase Plan, leaving approximately 185,010 shares available for purchase under the Purchase Plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended June 30,
Statement of Operations Classifications	2016		2015
	(unaudited)
Cost of goods sold	$	100	$	122
Research, development and engineering (1)		303		460
Selling, general and administrative expenses		452		406
Stock-based compensation effect in income before taxes		855		988
Provision for income taxes (2)		342		346
Net stock-based compensation effects in net income	$	513	$	642

(1) Includes acquisition related compensation expenses of $249,000 during the quarter ended June 30, 2015.

(2) Calculated at the U.S. statutory income tax rate of 40% in fiscal 2017 and 35% in fiscal 2016.

During the three months ended June 30, 2016, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of June 30, 2016, approximately $6.8 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.8 years.

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The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three months ended June 30, 2016 and 2015, were based on estimates at the date of grant as follows:

	Stock Options						Purchase Plan
	Three Months Ended June  30,						Three Months Ended June  30,
	2016			2015			2016			2015
	(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	3.96		$	6.32		$	3.94		$	3.15
Risk-free interest rate		1.4	%		2.0	%		0.26	%		0.1	%
Expected term in years		6.41			6.75			1.00			1.00
Volatility		41.0	%		50.7	%		42.9	%		33.7	%
Dividend yield		1.41	%		1.01	%		1.42	%		1.11	%

Activity with respect to outstanding stock options for the three months ended June 30, 2016 was as follows:

				Weighted Average
	Number of			Exercise Price		Intrinsic Value (000) (1)
	Shares			Per Share
				(unaudited)
Balance at March 31, 2016		5,234,397		$	10.40
Options granted		222,000		$	10.97
Options exercised		(27,897	)	$	6.53	$	130
Options expired		(5,000	)	$	9.73
Balance at June 30, 2016		5,423,500		$	10.44
Exercisable at June 30, 2016		3,684,916		$	10.03
Exercisable at March 31, 2016		3,619,563		$	9.93

(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

12. Accumulated Other Comprehensive Income (Loss)

The components and the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2016 and 2015 were as follows (in thousands):

	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2016	$	(10,639	)	$	(82	)	$	(9,545	)	$	(20,266	)
Other comprehensive income (loss) before reclassifications		(2,825	)		85			—			(2,740	)
Net loss reclassified from accumulated other comprehensive income (loss)		—			90			—			90
Net current period other comprehensive income (loss)		(2,825	)		175			—			(2,650	)
Balance as of June 30, 2016	$	(13,464	)	$	93		$	(9,545	)	$	(22,916	)

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	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		2,692			(117	)		—			2,575
Net current period other comprehensive income (loss)		2,692			(117	)		—			2,575
Balance as of June 30, 2015	$	(10,885	)	$	(110	)	$	(9,518	)	$	(20,513	)

The amounts reclassified out of accumulated other comprehensive income (loss) for the three months ended June 30, 2016 and 2015 are as follows (in thousands):

Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)					Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended June 30,
	2016			2015
	(unaudited)
Impairment of marketable securities		(151	)		—	Other income (expense), net
Subtotal		(151	)		—	Income before income tax provision
Tax impact		61			—	Provision for income tax
Total reclassifications for the period	$	(90	)	$	—	Net income

13. Computation of Earnings per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended
	June 30,
	2016		2015
	(unaudited)
Net income	$	3,019	$	2,985
Weighted average shares—basic		31,401		31,746
Weighted average shares—diluted		32,001		32,733
Net income per share—basic	$	0.10	$	0.09
Net income per share—diluted	$	0.09	$	0.09

Diluted weighted average shares included approximately 600,000 and 987,000 common equivalent shares from stock options for the three months ended June 30, 2016 and 2015.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the three months ended June 30, 2016 and 2015, there were outstanding options to purchase 2,889,670 and 868,702 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. These options could dilute earnings per share in future periods if the market price of the common stock increases.

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14. Segment and Geographic Information

We have a single operating segment and reportable segment. We design develop, manufacture and market high performance semiconductor products. Our Chief Executive Officer and our President, together, have been identified as the chief operating decision makers. Our chief operating decision makers review financial information presented as one operating segment for the purpose of making decisions, allocating resources and assessing financial performance.

Our net revenues by major geographic area (based on destination) were as follows (in thousands):

	Three Months Ended June 30,
	2016		2015
	(unaudited)
United States	$	19,501	$	20,133
Europe and the Middle East
France		3,450		2,040
Germany		8,599		8,077
Italy		1,076		1,264
Netherlands		1,140		695
United Kingdom		3,627		3,220
Other		5,953		6,697
Asia Pacific
China		22,640		21,235
Japan		1,718		3,322
Korea		4,695		6,136
Malaysia		804		1,242
Singapore		3,007		3,117
Thailand		811		1,043
Other		1,747		1,484
Rest of the World
India		900		1,132
Other		970		1,210
Total	$	80,638	$	82,047

The following table sets forth net revenues for each of our product groups for the three months ended June 30, 2016 and 2015 (in thousands):

	Three Months Ended June 30,
	2016		2015
	(unaudited)
Power semiconductors	$	56,479	$	54,978
Integrated circuits		20,382		22,484
Systems and RF power semiconductors		3,777		4,585
Total	$	80,638	$	82,047

For the three months ended June 30, 2016 and 2015, one distributor accounted for 13.8% and 10.7% of our net revenues in each period, respectively. For the three months ended June 30, 2016, another distributor accounted for 10.6% of our net revenues.

15. Income Taxes

For the three months ended June 30, 2016 and 2015, we recorded income tax provisions of $2.3 million and $1.7 million, reflecting effective tax rates of 42.7% and 35.8%, respectively. Our effective tax rates for the quarters ended June 30, 2016 and 2015 were affected by non-benefitted losses incurred in certain tax jurisdictions. For both periods, the effective tax rates reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items.

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16. Commitments and Contingencies

Revolving Credit Agreement

On November 20, 2015, we entered into Revolving Credit Agreement with a syndicate of banks whose agent is BOTW for a line of credit of $125.0 million. All amounts owed under the credit agreement are due and payable on November 20, 2017. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by four of our subsidiaries. The loan is collateralized pursuant to a Contingent Collateral Agreement under which the assets of the parent company and the four subsidiaries could be subject to security interests for the benefit of the banks in the event of a loan default. The credit agreement includes a letter of credit subfacility, under which BOTW agrees to issue letters of credit of up to $10.0 million. However, borrowing under this subfacility is limited to the extent of availability under the $125.0 million revolving line of credit. During the first quarter ended June 30, 2016, we made a principal repayment of $7.0 million. At June 30, 2016, the outstanding principal under the credit agreement was $73.0 million. See Note 9, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of June 30, 2016 and March 31, 2016.

On July 1, 2016, in connection with an income tax audit of our subsidiary in the Philippines for fiscal year ended March 31, 2010, we received a notice from the Philippine Bureau of Internal Revenue, or BIR, that they upheld an initial assessment for a deficiency of income taxes, inclusive of interest and penalties, of approximately $2.5 million. In accordance with our rights, we have filed an appeal before the Philippine Court of Tax Appeals, or CTA. While there are no assurances that we will prevail, we believe that we have a valid legal reason to challenge the BIR’s decision and that our appeal before the CTA will merit a favorable resolution. Accordingly, we have not accrued any amount for this matter.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion contains forward-looking statements, which are subject to certain risks and uncertainties, including, without limitation, those described elsewhere in this Form 10-Q and, in particular, in Item 1A of Part I hereof. Actual results may differ materially from the results discussed in the forward-looking statements. For a discussion of risks that could affect future results, see “Item 1A. Risk Factors.” All forward-looking statements included in this document are made as of the date hereof, based on the information available to us as of the date hereof, and we assume no obligation to update any forward-looking statement, except as may be required by law.

Overview

We are a multi-market integrated semiconductor company. Our three principal product groups are: power semiconductors; integrated circuits, or ICs; and systems and radio frequency, or RF, power semiconductors.

Our power semiconductors improve system efficiency and reliability by converting electricity at relatively high voltage and current levels into the finely regulated power required by electronic products. We focus on the market for power semiconductors that are capable of processing greater than 200 watts of power.

We also design, manufacture and sell integrated circuits for a variety of applications. Our microcontrollers provide application-specific, embedded system-on-chip, or SoC, solutions for the industrial and consumer markets. Our analog and mixed-signal ICs are principally used in telecommunications applications. Our mixed-signal application-specific ICs, or ASICs, address the requirements of the medical imaging equipment and display markets. Our power management and control ICs are used in conjunction with our power semiconductors.

Our systems include laser diode drivers, high voltage pulse generators and modulators, and high power subsystems, sometimes known as stacks, that are principally based on our high power semiconductor devices. Our RF power semiconductors enable circuitry that amplifies or receives radio frequencies in wireless and other microwave communication applications, medical imaging applications and defense and space applications.

In the quarter ended June 30, 2016, our net revenues increased as compared to the immediately preceding quarter. Our net revenues from sales of power semiconductors increased while our net revenues from sales of ICs and systems and RF power semiconductors decreased. Comparing the same periods, sales to major application markets increased, except the industrial and commercial market. Geographically, sales to the United States and Asia Pacific region increased while sales to the Europe and Middle East regions decreased. During the quarter ended June 30, 2016, our net revenues through distribution increased while our net revenues from original equipment manufacturers, or OEMs, decreased. Our selling, general and administrative, or SG&A, expenses increased because of higher bad debt expenses. Our research, development and engineering expenses, or R&D expenses, also increased slightly. In future periods, we expect our SG&A expenses to remain fairly consistent, except to the extent that selling expenses vary with changing revenues. We expect our R&D expenses to fluctuate modestly in the upcoming quarters.

Critical Accounting Policies and Significant Management Estimates

The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the reasonableness of its estimates. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

We believe the following critical accounting policies require that we make significant judgments and estimates in preparing our consolidated financial statements.

Revenue recognition. Revenue is recognized when there is persuasive evidence that an arrangement exists, when delivery has occurred, when the price to the buyer is fixed or determinable and when collectability of the receivable is reasonably assured. These elements are typically met when title to the products is passed to the buyer, which is generally when product is shipped to the customer with sale terms ex-works, or EXW, or when product is delivered to the customer with sales terms delivered duty paid, or DDP.

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We sell to distributors and original equipment manufacturers, or OEMs. Approximately 59.5% of our net revenues in the three months ended June 30, 2016 and 55.2% of our net revenues in the three months ended June 30, 2015 were from distributors. We provide some of our distributors with the following programs: stock rotation and ship and debit.

Reserves for sales returns and allowances, including allowances for so called “ship and debit” transactions, are recorded at the time of shipment, and are based on historical levels of returns and current economic trends and changes in customer demand.

Accounts receivable from distributors are recognized and inventory is relieved when title to inventories transfer, typically upon shipment from us, at which point we have a legally enforceable right to collection under normal payment terms. Under certain circumstances, where we are not able to reasonably and reliably estimate the actual returns, revenues and costs relating to distributor sales are deferred until products are sold by the distributors to the distributors’ end customers. Deferred amounts are presented net and included under “Accrued expenses and other liabilities.”

We state our revenues net of any taxes collected from customers that are required to be remitted to various government agencies. The amount of taxes collected from customers and payable to governmental entities is included under “Accrued expenses and other liabilities.” Shipping and handling costs are included in cost of sales.

Allowance for sales returns. We maintain an allowance for sales returns based on estimated product returns by our customers. We estimate our allowance for sales returns based on our historical return experience, current economic trends, changes in customer demand, known returns we have not received and other assumptions. If we were to make different judgments or utilize different estimates, the amount and timing of our revenue could be materially different. Given that our revenues consist of a high volume of relatively similar products, to date our actual returns and allowances have not fluctuated significantly from period to period, and our returns provisions have historically been reasonably accurate. This allowance is included as part of “Accounts receivable, net” on the balance sheet and as a reduction of revenues in the statement of operations.

Allowance for stock rotation. We also provide “stock rotation” to select distributors. The rotation allows distributors to return a percentage of the previous six months’ sales in exchange for orders of an equal or greater amount. Under the program, approximately $321,000 and $349,000 of products were returned to us in the three months ended June 30, 2016 and 2015, respectively. We establish the allowance for sales to distributors except in cases where the revenue recognition is deferred and recognized upon sale by the distributor of products to the end-customer. The allowance, which is management’s best estimate of future returns, is based upon the historical experience of returns and inventory levels at the distributors. This allowance is included as part of “Accounts receivable, net” on the balance sheet and as a reduction of revenues in the statement of operations. Should distributors increase stock rotations beyond our estimates, these statements would be adversely affected.

Allowance for ship and debit. Ship and debit is a program designed to assist distributors in meeting competitive prices in the marketplace on sales to their end-customers. Ship and debit requires a request from the distributor for a pricing adjustment for a specific part for a customer sale to be shipped from the distributor’s stock. We have no obligation to accept this request. However, it is our historical practice to allow some companies to obtain pricing adjustments for inventory held. We receive periodic statements regarding our products held by our distributors. Ship and debit authorizations may cover current and future distributor activity for a specific part for sale to a distributor’s customer. At the time we record sales to distributors, we provide an allowance for the estimated future distributor activity related to such sales since it is probable that such sales to distributors will result in ship and debit activity. The sales allowance requirement is based on sales during the period, credits issued to distributors, distributor inventory levels, historical trends, market conditions, pricing trends we see in our direct sales activity with original equipment manufacturers and other customers and input from sales, marketing and other key management. We believe that the analysis of these inputs enables us to make reliable estimates of future credits under the ship and debit program. This analysis requires the exercise of significant judgments. Our actual results to date have approximated our estimates. At the time the distributor ships the part from stock, the distributor debits us for the authorized pricing adjustment. This allowance is included as part of “Accounts receivable, net” on the balance sheet and as a reduction of revenues in the statement of operations. If competitive pricing were to decrease sharply and unexpectedly, our estimates might be insufficient, which could significantly adversely affect our operating results.

Additions to the ship and debit allowance are estimates of the amount of expected future ship and debit activity related to sales during the period. Additions to the allowance reduce revenues and gross profit in the period. The following table sets forth the beginning and ending balances of, additions to, and deductions from, our allowance for ship and debit during the three months ended June 30, 2016 (in thousands):

	(unaudited)
Balance at March 31, 2016	$	866
Additions		1,493
Deductions		(1,273	)
Balance at June 30, 2016	$	1,086

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Allowance for doubtful accounts. We maintain an allowance for doubtful accounts for estimated losses from the inability of our customers to make required payments. We evaluate our allowance for doubtful accounts based on the aging of our accounts receivable, the financial condition of our customers and their payment history, our historical write-off experience and other assumptions. If we were to make different judgments of the financial condition of our customers or the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. This allowance is reported on the balance sheet as part of “Accounts receivable, net” and is included on the statement of operations as part of selling, general and administrative expenses. This allowance is based on historical losses and management’s estimates of future losses.

Inventories. Inventories are recorded at the lower of standard cost, which approximates actual cost on a first-in-first-out basis, or market value. Our accounting for inventory costing is based on the applicable expenditure incurred, directly or indirectly, in bringing the inventory to its existing condition. Such expenditures include acquisition costs, production costs and other costs incurred to bring the inventory to its use. As it is impractical to track inventory from the time of purchase to the time of sale for the purpose of specifically identifying inventory cost, our inventory is, therefore, valued based on a standard cost, given that the materials purchased are identical and interchangeable at various production processes. We review our standard costs on an as-needed basis but in any event at least once a year, and update them as appropriate to approximate actual costs. The authoritative guidance provided by FASB requires certain abnormal expenditures to be recognized as expenses in the current period instead of capitalized in inventory. It also requires that the amount of fixed production overhead allocated to inventory be based on the normal capacity of the production facilities.

We typically plan our production and inventory levels based on internal forecasts of customer demand, which are highly unpredictable and can fluctuate substantially. The value of our inventories is dependent on our estimate of future demand as it relates to historical sales. If our projected demand is overestimated, we may be required to reduce the valuation of our inventories below cost. We regularly review inventory quantities on hand and record an estimated provision for excess inventory based primarily on our historical sales and expectations for future use. We also recognize a reserve based on known technological obsolescence, when appropriate. Actual demand and market conditions may be different from those projected by our management. This could have a material effect on our operating results and financial position. If we were to make different judgments or utilize different estimates, the amount and timing of our write-down of inventories could be materially different.

Excess inventory frequently remains saleable. When excess inventory is sold, it yields a gross profit margin of up to 100%. Sales of excess inventory have the effect of increasing the gross profit margin beyond that which would otherwise occur, because of previous write-downs. Once we have written down inventory below cost, we do not write it up when it is subsequently utilized, sold or scrapped. We do not physically segregate excess inventory nor do we assign unique tracking numbers to it in our accounting systems. Consequently, we cannot isolate the sales prices of excess inventory from the sales prices of non-excess inventory. Therefore, we are unable to report the amount of gross profit resulting from the sale of excess inventory or quantify the favorable impact of such gross profit on our gross profit margin.

The following table provides information on our excess and obsolete inventory reserve charged against inventory at cost (in thousands):

	(unaudited)
Balance at March 31, 2016	$	21,380
Utilization or sale		(1,040	)
Scrap		(867	)
Additional accrual		1,363
Foreign currency translation adjustments		(173	)
Balance at June 30, 2016	$	20,663

The practical efficiencies of wafer fabrication require the manufacture of semiconductor wafers in minimum lot sizes. Often, when manufactured, we do not know whether or when all the semiconductors resulting from a lot of wafers will sell. With more than 10,000 different part numbers for semiconductors, excess inventory resulting from the manufacture of some of those semiconductors will be continual and ordinary. Because the cost of storage is minimal when compared to the potential value and because our products do not quickly become obsolete, we expect to hold excess inventory for potential future sale for years. Consequently, we have no set time line for the utilization, sale or scrapping of excess inventory.

In addition, our inventory is also being written down to the lower of cost or market or net realizable value. We review our inventory listing on a quarterly basis for an indication of losses being sustained for costs that exceed selling prices less direct costs to sell. When it is evident that our selling price is lower than current cost, inventory is marked down accordingly. At June 30, 2016, our lower of cost or market reserve was $472,000.

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Furthermore, we perform an annual inventory count and at certain locations periodic cycle counts for specific parts that have a high turnover. We also periodically identify any inventory that is no longer usable and write it off.

Valuation of Goodwill and Intangible Assets. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired. The costs of acquired intangible assets are recorded at fair value at acquisition. Intangible assets with finite lives are amortized using the straight-line method or accelerated method over their estimated useful lives and evaluated for impairment in accordance with the authoritative guidance provided by FASB.

Goodwill and intangible assets with indefinite lives are reviewed at least annually for impairment charges during the quarter ending March 31, or more frequently if events and circumstances indicate that the asset might be impaired, in accordance with the authoritative guidance provided by FASB. We first assess qualitative factors to determine whether it is necessary to perform the two-step fair value-based impairment test described below. If we believe that, as a result of its qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required.

Under the quantitative approach, there are two steps in the determination of the impairment of goodwill. The first step compares the carrying amount of the net assets to the fair value of the reporting unit. The second step, if necessary, recognizes an impairment loss to the extent the carrying value of the reporting unit’s net assets exceeds the implied fair value of goodwill. An impairment loss would be recognized to the extent that the carrying amount exceeds the fair value of the reporting unit. We operate our business as one reporting unit.

We assess the recoverability of the finite-lived intangible assets by examining the occurrences of certain events or changes of circumstances that indicate that the carrying amounts may not be recoverable. After our initial assessment, if it is necessary, we perform the impairment test by determining whether the estimated undiscounted cash flows attributable to the assets in question are less than their carrying values. Impairment losses, if any, are measured as the amount by which the carrying values of the assets exceed their fair value and are recognized in operating results. If a useful life is determined to be shorter than originally estimated, we accelerate the rate of amortization and amortize the remaining carrying value over the new shorter useful life.

Income tax. In preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our unaudited condensed consolidated balance sheets. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we establish a valuation allowance. A valuation allowance reduces our deferred tax assets to the amount that management estimates is more likely than not to be realized. In determining the amount of the valuation allowance, we consider income over recent years, estimated future taxable income, feasible tax planning strategies and other factors in each taxing jurisdiction in which we operate. If we determine that it is more likely than not that we will not realize all or a portion of our remaining deferred tax assets, then we will increase our valuation allowance with a charge to income tax expense. Conversely, if we determine that it is likely that we will ultimately be able to utilize all or a portion of the deferred tax assets for which a valuation allowance has been provided, then the related portion of the valuation allowance will reduce income tax expense. Significant management judgment is required in determining our provision for income taxes and potential tax exposures, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. In the event that actual results differ from these estimates or we adjust these estimates in future periods, we may need to establish a valuation allowance, which could materially impact our financial position and results of operations. Our ability to utilize our deferred tax assets and the need for a related valuation allowance are monitored on an ongoing basis.

Furthermore, computation of our tax liabilities involves examining uncertainties in the application of complex tax regulations. We recognize liabilities for uncertain tax positions based on the two-step process as prescribed by the authoritative guidance provided by FASB. The first step is to evaluate the tax position to determine whether there is sufficient available evidence to indicate if it is more likely than not that the position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step requires us to measure and determine the approximate amount of the tax benefit at the largest amount that is more than 50% likely of being realized upon ultimate settlement with the tax authorities. It is inherently difficult and requires significant judgment to estimate such amounts, as this requires us to determine the probability of various possible outcomes. We reexamine these uncertain tax positions on a quarterly basis. This reassessment is based on various factors during the period including, but not limited to, changes in worldwide tax laws and treaties, changes in facts or circumstances, effectively settled issues under audit and any new audit activity. A change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our unaudited condensed consolidated financial statements, see Note 2, “Recent Accounting Pronouncements and Accounting Changes” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

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Results of Operations — Three Months Ended June 30, 2016 and 2015

The following table sets forth selected consolidated statements of operations data for the fiscal periods indicated and the percentage change in such data from period to period. These historical operating results may not be indicative of the results for any future periods.

	Three Months Ended June  30,
	2016		% change			2015
	(unaudited)
	(000)					(000)
Net revenues	$	80,638		(1.7	)	$	82,047
Cost of goods sold		56,644		0.4			56,445
Gross profit	$	23,994		(6.3	)	$	25,602
Operating expenses:
Research, development and engineering	$	7,910		3.0		$	7,683
Selling, general and administrative		10,038		(5.6	)		10,636
Amortization of acquisition-related intangible assets		1,017		(35.6	)		1,579
Total operating expenses	$	18,965		(4.7	)	$	19,898

The following table sets forth selected statements of operations data as a percentage of net revenues for the fiscal periods indicated. These historical operating results may not be indicative of the results for any future periods.

	% of Net Revenues
	Three Months Ended June 30,
	2016			2015
	(unaudited)
Net revenues		100.0			100.0
Cost of goods sold		70.2			68.8
Gross profit		29.8			31.2
Operating expenses:
Research, development and engineering		9.8			9.4
Selling, general and administrative		12.4			12.9
Amortization of acquisition-related intangible assets		1.4			1.9
Total operating expenses		23.6			24.2
Operating income		6.2			7.0
Other income (expense), net		0.3			(1.3	)
Income before income tax		6.5			5.7
Provision for income tax		(2.8	)		(2.1	)
Net income		3.7			3.6

Revenues

The following table sets forth the net revenues for each of our product groups for the fiscal periods indicated:

Net Revenues (1)	Three Months Ended June 30,
	2016		% change			2015
	(unaudited)
	(000)					(000)
Power semiconductors	$	56,479		2.7		$	54,978
Integrated circuits		20,382		(9.3	)		22,484
Systems and RF power semiconductors		3,777		(17.6	)		4,585
Total	$	80,638		(1.7	)	$	82,047

(1) Revenue information includes intellectual property revenues that are not included in average selling prices.

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The following tables set forth the average selling prices, or ASPs, and units for the fiscal periods indicated:

Average Selling Prices	Three Months Ended June 30,
	2016		% change			2015
	(unaudited)
Power semiconductors	$	1.68		(13.8	)	$	1.95
Integrated circuits	$	0.45		4.7		$	0.43
Systems and RF power semiconductors	$	21.71		(34.6	)	$	33.22
Units	Three Months Ended June 30,
	2016		% change			2015
	(unaudited)
	(000)					(000)
Power semiconductors		33,554		19.3			28,134
Integrated circuits		44,694		(12.8	)		51,235
Systems and RF power semiconductors		174		26.1			138
Total		78,422		(1.4	)		79,507

The following table sets forth the net revenue by geographic region for the fiscal periods indicated:

	Three Months Ended June 30,
	2016				2015
	Net Revenue		% of Net Revenue		Net Revenue		% of Net Revenue
	(unaudited)
	(000)				(000)
Europe and Middle East	$	23,845		29.6	$	21,993		26.8
Asia Pacific		35,422		43.9		37,579		45.8
Rest of world		1,870		2.3		2,342		2.9
International revenues		61,137		75.8		61,914		75.5
USA		19,501		24.2		20,133		24.5
Total	$	80,638		100.0	$	82,047		100.0

The 1.7% decrease in net revenues in the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 reflected a decrease of $2.1 million, or 9.3%, in the sale of ICs and a decrease of $0.8 million, or 17.6%, in the sale of systems and RF power semiconductors, offset by an increase of $1.5 million, or 2.7%, in the sale of power semiconductors. The reduction in net revenues from ICs was primarily caused by decreased sales of microcontrollers to the consumer products market. The net revenues from the sale of systems and RF power semiconductors decreased primarily due to a decrease in net revenues from the sale of subassemblies, primarily to the industrial and commercial market. The increase in net revenues from power semiconductors was mainly due to a $1.7 million increase in the sale of metal-oxide-silicon, or MOS, products primarily to the industrial and commercial market.

For the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, the increases in unit shipments of power semiconductors and systems and RF power semiconductors were broad-based, except for a reduction in the shipment of IGBTs and subassemblies. For both product groups, the decreases in ASPs were primarily due to shifts in product mix, rather than changes in product prices. In the case of ICs, the reduction in units was largely the result of lower shipments of flash microcontrollers and the increase in ASPs was due to changes in product mix.

For the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, our sales decreased in the U.S. and Asia Pacific area and increased in the Europe and the Middle East. Comparing the same periods, our sales decreased to the industrial and commercial market and the consumer product market while our sales increased to our other major application markets.

For the three months ended June 30, 2016 and 2015, one distributor accounted for 13.8% and 10.7% of our net revenues, respectively. For the three months ended June 30, 2016, another distributor accounted for 10.6% of our net revenues.

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Our net revenues were reduced by allowances for sales returns, stock rotations and ship and debit. See “Critical Accounting Policies and Significant Management Estimates” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Gross Profit

Gross profit decreased to $24.0 million in the three months ended June 30, 2016 from $25.6 million in the three months ended June 30, 2015. Gross profit margin decreased to 29.8% in the quarter ended June 30, 2016 from 31.2% in the quarter ended June 30, 2015. The decrease in both gross profit dollars and margins were largely because of a shift in product mix to sales of lower margin products and, to a lesser extent, because of reduced revenues.

Our gross profit and gross profit margin were positively affected by the sale or utilization of excess inventories which had previously been written down. See “Critical Accounting Policies and Significant Management Estimates—Inventories” elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Research, Development and Engineering

R&D expenses typically consist of internal engineering efforts for product design, process improvement and development. As a percentage of net revenues, our R&D expenses for the three months ended June 30, 2016 were 9.8% as compared to 9.4% for the three months ended June 30, 2015. The increase in the percentage primarily resulted from lower net revenues and higher R&D expenses, primarily due to an increase in the headcount. Expressed in dollars, for the three months ended June 30, 2016 as compared to the same period of the prior year, our R&D expenses increased by approximately $227,000, or 3.0%.

Selling, General and Administrative

As a percentage of net revenues, our SG&A expenses for the three months ended June 30, 2016 were 12.4% as compared to 12.9% for the three months ended June 30, 2015. Expressed in dollars, SG&A expenses decreased by approximately $598,000, or 5.6%, in the three months ended June 30, 2016 as compared to the same period in the prior fiscal year. The decreases, both in the percentage and in dollars, were primarily due to lower selling expenses.

Amortization of Acquisition-Related Intangible Assets

For the three months ended June 30, 2016, we recorded amortization expenses on acquired intangible assets of $1.0 million as compared to $1.6 million for the same period in fiscal 2016.

Interest Expense

During the three months ended June 30, 2016, our interest expenses were $635,000 as compared to $314,000 for the three months ended June 30, 2015. The increase was primarily due to additional borrowing under the revolving loan.

Other Income (Expense), net

In the quarter ended June 30, 2016, other income, net, was $815,000 as compared to other expense, net, of $790,000 in the quarter ended June 30, 2015. The shift from other expense, net, in the three month period ended June 30, 2015 to other income, net, in the same period of fiscal 2017 was primarily related to fluctuations in foreign currency exchange rates. Other income, net, in the three months ended June 30, 2016 principally consisted of $620,000 in gains associated with changes in exchange rates for foreign currency transactions. Other expense, net in the three months ended June 30, 2015 consisted principally of $668,000 in losses associated with changes in exchange rates for foreign currency transactions.

Provision for Income Tax

For the three months ended June 30, 2016 and 2015, we recorded income tax provisions of $2.3 million and $1.7 million, reflecting effective tax rates of 42.7% and 35.8%, respectively. Our effective tax rates for quarter ended June 30, 2016 and 2015 were affected by non-benefitted losses incurred in certain tax jurisdictions. For both periods, the effective tax rates reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items.

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Liquidity and Capital Resources

At June 30, 2016, cash and cash equivalents were $151.4 million as compared to $155.8 million at March 31, 2016.

Our cash provided by operating activities for the three months ended June 30, 2016 was $7.5 million, a decrease of approximately $1.9 million as compared to the $9.4 million of cash provided by operating activities in the comparable period of the prior year. The change in our operating cash flow was primarily due to a decrease of $1.1 million in net income and total adjustments to reconcile net income, and a decrease of $804,000 in net changes in operating assets and liabilities.

The decrease in net income and total adjustments to reconcile net income was principally caused by the decrease in net revenues, depreciation and amortization expenses, foreign currency translation adjustments and net adjustments for investments. The changes in operating assets and liabilities for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 included the following: accounts receivable decreased due to lower net revenues and the timing of collection, inventory purchases decreased as a result of our efforts to reduce our inventory on hand, prepaid expenses and other current assets decreased due to the timing of payment from a subcontractor and a tax refund, while accrued expenses and other liabilities increased, primarily due to the timing of inventory receipts.

Our net cash used in investing activities for the three months ended June 30, 2016 was $3.5 million, as compared to net cash used in investing activities of $18.3 million during the three months ended June 30, 2015. During the three months ended June 30, 2016, we spent $3.5 million on the purchase of property and equipment. During the three months ended June 30, 2015, we spent $14.6 million, net of cash and cash equivalents acquired, on the acquisition of RadioPulse and $3.7 million on the purchase of property and equipment, including real estate in Germany.

For the three months ended June 30, 2016, net cash used in financing activities was $7.3 million, as compared to net cash provided by financing activities of $5.0 million in the three months ended June 30, 2015. During the three months ended June 30, 2016, we made a principal repayment of $8.0 million on loan obligations. During the three months ended June 30, 2015, we borrowed an additional €3.0 million, or about $3.3 million, and received $2.5 million from employee equity plans, offset by $770,000 used for principal repayment on capital lease and loan obligations.

At June 30, 2016, loans payable totalled $79.0 million. This represented 52.2% of our cash and cash equivalents and 28.2% of our stockholders’ equity.

In June 2005, IXYS Semiconductor GmbH, our German subsidiary, borrowed €10.0 million, or about $12.2 million at the time, from IKB. At March 31, 2015, the outstanding principal balance was €3.5 million, or about $3.8 million. In April 2015, we replaced the loan with a new loan from IKB Deutsche Industriebank, or IKB. Under the new agreement, we borrowed €6.5 million, or about $7.2 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $258,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. The loan may be prepaid in whole or in part with a modest penalty. The loan is also collateralized by a security interest in the facility in Lampertheim, Germany. These covenants are required to be complied with annually at March 31. We complied with all of these financial covenants at March 31, 2016. See Note 9, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the new agreement.

On November 20, 2015, we entered into a Revolving Credit Agreement with a syndicate of banks for a line of credit of $125.0 million. The agent for the banks is Bank of the West, or BOTW. The obligations are guaranteed by four of our subsidiaries. The loan is collateralized pursuant to Contingent Collateral Agreement, under which the assets of the parent company and the four subsidiaries could be subject to security interests for the benefit of the banks in the event of a loan default. The Revolving Credit Agreement expires on November 20, 2017.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin or an alternative base rate plus a margin. The margin can range from 0.75% to 2.5%, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The applicable interest rate as of June 30, 2016 was 2.56%. An unused commitment fee is also payable. It ranges from 0.25% to 0.625% annually, depending on leverage.

The terms of the facility impose restrictions on the Company’s ability to undertake certain transactions, to create liens on assets and to incur subsidiary indebtedness. In addition, the credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At June 30, 2016 we complied with these financial covenants.

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At June 30, 2016, the outstanding principal balance under the credit agreement was $73.0 million. See Note 9, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the credit agreement. The credit agreement also includes a $10.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” and Note 9, “Borrowing Arrangements” in the Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further information regarding the terms of our credit arrangements.

On May 1, 2015, we acquired RadioPulse. At closing, we paid a cash consideration of $14.7 million. The total consideration may also include earnout payments aggregating up to $6.0 million and payable over three years based on its operational results in calendar years 2015, 2016, and 2017.

We assumed loans of approximately $2.4 million related to the acquisition of RadioPulse. These loans were primarily short-term facilities from financial institutions and carried a weighted average interest rate of 4.9%. The loans were fully repaid in April 2016.

We assumed loans of approximately $723,000, related to an acquisition completed during the quarter ended June 30, 2014. The assumed borrowings were non-interest loans from government agencies to support the research and development activities with maturity dates varying from fiscal 2015 to fiscal 2021. As of June 30, 2016, the outstanding principal balance was approximately €310,000, or $344,000.

During the quarter ended June 30, 2016, we accrued $1.3 million for dividends to be paid in July 2016, consisting of a quarterly cash dividend of $0.04 per share. The quarterly dividend is at the discretion of the Board of Directors.

Additionally, we maintain three defined benefit pension plans: one in the United Kingdom, one in Germany and one in the Philippines. Benefits are based on years of service and the employees’ compensation. We either deposit funds for these plans with financial institutions, consistent with the requirements of local law, or accrue for the unfunded portion of the obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. The total pension liability accrued for the three plans at June 30, 2016 was $15.6 million.

We believe that our cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our anticipated cash requirements for the next 12 months. Our liquidity could be negatively affected by a decline in demand for our products, increases in the cost of materials or labor, investments in new product development, one or more acquisitions, or the inability to renew or replace our revolving line of credit in whole or in part. From time to time, we use derivative contracts in the normal course of business to manage our foreign currency exchange and interest rate risks. We did not have any open derivative contracts at June 30, 2016. There can be no assurance that additional debt or equity financing will be available when required or, if available, can be secured on terms satisfactory to us.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risk has not changed materially from the market risk disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2016.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Based on their evaluation as of June 30, 2016, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations. Furthermore, these controls and procedures were also effective to ensure that information required to be disclosed by us in this Quarterly Report on Form 10-Q was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our procedures or our internal controls will prevent or detect all errors and all fraud. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of our controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, have been detected.

Changes in Internal Controls over Financial Reporting

During the quarter ended June 30, 2016, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We currently are involved in a variety of legal matters that arise in the normal course of business. Based on information currently available, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition, results of operations and cash flows. Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on the results of operations of the period in which the ruling occurs.

Item 1A. Risk Factors

In addition to the other information in this Quarterly Report on Form 10-Q, the following risk factors should be considered carefully in evaluating our business and us. Additional risks not presently known to us or that we currently believe are not serious may also impair our business and its financial condition.

Our operating results fluctuate significantly because of a number of factors, many of which are beyond our control.

Given the nature of the markets in which we participate, as well as macroeconomic uncertainties, we cannot reliably predict future revenues and profitability and unexpected changes may cause us to adjust our operations. Large portions of our costs are fixed, due in part to our significant sales, research and development and manufacturing costs. Thus, small declines in revenues could seriously negatively affect our operating results in any given quarter. Our operating results may fluctuate significantly from quarter-to-quarter and year-to-year. For example, from fiscal 2008 to fiscal 2009, net income in one year shifted to net loss in the next year. Some of the factors that may affect our quarterly and annual results are:

• changes in business and economic conditions, including a downturn in demand or decrease in the rate of growth in demand, whether in the global economy, a regional economy or the semiconductor industry;

• changes in market conditions, potentially including changes in the credit markets, currency exchange rates, expectations for inflation or energy prices;

• the reduction, rescheduling or cancellation of orders by customers;

• fluctuations in timing and amount of customer requests for product shipments;

• changes in the mix of products that our customers purchase;

• changes in the level of customers’ component inventories;

• loss of key customers or employees;

• the availability of production capacity, whether internally or from external suppliers;

• the cyclical nature of the semiconductor industry;

• competitive pressures on selling prices;

• strategic actions taken by our competitors;

• market acceptance of our products and the products of our customers;

• fluctuations in our manufacturing yields and significant yield losses;

• difficulties in forecasting demand for our products and the planning and managing of inventory levels;

• the availability of raw materials, supplies and manufacturing services from third parties;

• the amount and timing of investments in research and development;

• damage awards or injunctions as the result of litigation;

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• changes in our product distribution channels and the timeliness of receipt of distributor resale information;

• the impact of vacation schedules and holidays, largely during the second and third quarters of our fiscal year; and

• the amount and timing of costs associated with product returns.

As a result of these factors, many of which are difficult to control or predict, as well as the other risk factors discussed in this Quarterly Report on Form 10-Q, we may experience materially adverse fluctuations in our future operating results on a quarterly or annual basis. Changes in demand for our products and in our customers’ product needs could have a variety of negative effects on our competitive position and our financial results, and, in certain cases, may reduce our revenues, increase our costs, lower our gross margin percentage or require us to recognize impairments of our assets. If product demand declines, our manufacturing or assembly and test capacity could be underutilized and we may be required to record an impairment on our long-lived assets, including facilities and equipment as well as intangible assets and goodwill, which would increase our expenses. Factory planning decisions may also shorten the useful lives of long-lived assets, including facilities and equipment, and cause us to accelerate depreciation. In addition, if product demand declines or we fail to forecast demand accurately, we could be required to write off inventory or record underutilization charges, which would have a negative impact on our gross margin.

We may not be successful in our acquisitions.

We have in the past made, and may in the future make, acquisitions of other technologies and companies. These acquisitions involve numerous risks, including:

• failure to retain key personnel of the acquired business;

• diversion of management’s attention during the acquisition process;

• disruption of our ongoing business;

• the potential strain on our financial and managerial controls and reporting systems and procedures;

• unanticipated expenses and potential delays related to integration of an acquired business;

• the risk that we will be unable to develop or exploit acquired technologies;

• the engineering risks inherent in transferring products from one wafer fabrication facility to another;

• failure to successfully integrate the operations of an acquired business with our own;

• the challenges in achieving strategic objectives, cost savings and other benefits from acquisitions;

• the risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets;

• the risks of entering new markets in which we have limited experience;

• difficulties in expanding our information technology systems or integrating disparate information technology systems to accommodate the acquired businesses;

• the challenges inherent in managing an increased number of employees and facilities and the need to implement appropriate policies, benefits and compliance programs;

• customer dissatisfaction or performance problems with an acquired company’s products or personnel, or with altered sales terms or a changed distribution channel;

• adverse effects on our relationships with suppliers;

• the reduction in financial stability associated with the incurrence of debt or the use of a substantial portion of our available cash;

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• the costs associated with acquisitions, including amortization expenses related to intangible assets, and the integration of acquired operations;

• assumption of known or unknown liabilities or other unanticipated events or circumstances; and

• failure or fraud in pre-acquisition due diligence.

We cannot assure that we will be able to successfully acquire other businesses or product lines or integrate them into our operations without substantial expense, delay in implementation or other operational or financial problems.

As a result of an acquisition, our financial results may differ from the investment community’s expectations in a given quarter. Further, if one or more of the foregoing risks materialize or market conditions or other factors lead us to change our strategic direction, we may not realize the expected value from such transactions. If we do not realize the expected benefits or synergies of such transactions, our consolidated financial position, results of operations, cash flows or stock price could be negatively impacted.

Our backlog may not result in future revenues.

Customer orders typically can be cancelled or rescheduled by the customer without penalty to the customer. Cancellations or reschedulings are common in periods of decreasing demand. Further, in periods of increasing demand, particularly when production is allocated or delivery delayed, customers of semiconductor companies have on occasion placed orders without expectation of accepting delivery to increase their share of allocated product or in an effort to improve the timeliness of delivery. While we are attuned to the potential for such behavior and attempt to identify such orders, we could accept orders of this nature and subsequently experience order cancellation unexpectedly.

Our backlog at any particular date is not necessarily indicative of actual revenues for any succeeding period. A reduction of backlog during any particular period, or the failure of our backlog to result in future revenues, could harm our results of operations.

Fluctuations in the mix of products sold may adversely affect our financial results.

Changes in the mix and types of products sold may have a substantial impact on our revenues and gross profit margins. In addition, more recently introduced products tend to have higher associated costs because of initial overall development costs and higher start-up costs. Fluctuations in the mix and types of our products may also affect the extent to which we are able to recover our fixed costs and investments that are associated with a particular product or wafer foundry, and, as a result, can negatively impact our financial results.

Our international operations expose us to material risks.

For the fiscal year ended March 31, 2016, our net revenues by region were approximately 24.0% in the United States, approximately 29.1% in Europe and the Middle East, approximately 44.2% in the Asia Pacific region and approximately 2.7% in India and the rest of the world. We expect net revenues from foreign markets to continue to represent a majority of total net revenues. We maintain significant business operations in Germany, the United Kingdom, the Philippines and South Korea and work with subcontractors, suppliers and manufacturers in South Korea, Japan, the Philippines and elsewhere in Europe and the Asia Pacific region. Some of the risks inherent in doing business internationally are:

• foreign currency fluctuations, particularly in the Euro and the British pound;

• longer payment cycles;

• challenges in collecting accounts receivable;

• changes in the laws, regulations or policies of the countries in which we manufacture or sell our products, including the impact of the vote in the United Kingdom to leave the European Union;

• trade restrictions;

• cultural and language differences;

• employment regulations;

• limited infrastructure in emerging markets;

• transportation delays;

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• seasonal reduction in business activities;

• work stoppages;

• labor and union disputes;

• electrical outages;

• terrorist attack or war; and

• economic or political instability.

Our sales of products manufactured in our Lampertheim, Germany facility and our costs at that facility are primarily denominated in Euros, and sales of products manufactured in our Chippenham, U.K. facility and our costs at that facility are primarily denominated in British pounds. Fluctuations in the value of the Euro and the British pound against the U.S. dollar could have a significant adverse impact on our balance sheet and results of operations. We generally do not enter into foreign currency hedging transactions to control or minimize these risks. Reductions in the value of the Euro or British pound would reduce our revenues recognized in U.S. dollars, all other things being equal. Changes in the value of the Euro or the British pound could cause or increase losses associated with changes in exchange rates for foreign currency transactions. Fluctuations in currency exchange rates could cause our products to become more expensive to customers in a particular country, leading to a reduction in sales or profitability in that country. Alternatively, fluctuations in currency exchange rates in the face of competitive pricing pressures could lead to lower gross profit margins, as customer prices in one currency fall relative to costs of production experienced in a different currency. If we expand our international operations or change our pricing practices to denominate prices in other foreign currencies, we could be exposed to even greater risks of currency fluctuations.

Our financial performance is dependent on economic stability and credit availability in international markets. Actions by governments to address deficits or sovereign or bank debt issues, particularly in Europe, could adversely affect gross domestic product or currency exchange rates in countries where we operate, which in turn could adversely affect our financial results. If our customers or suppliers are unable to obtain the credit necessary to fund their operations, we could experience increased bad debts, reduced product orders and interruptions in supplier deliveries leading to delays or stoppages in our production. Alternatively, governmental actions in China or other emerging markets to address economic problems, such as inflation, asset or other “bubbles” or the transfer of capital out of the country, could also adversely affect gross domestic product or the growth thereof and result in reduced product orders or increased bad debt expense for us.

In addition, the laws and courts of certain foreign countries may not protect our products or intellectual property rights to the same extent as do U.S. laws and courts. Therefore, the risk of piracy of our technology and products may be greater when we manufacture or sell our products in certain foreign countries.

The semiconductor industry is cyclical, and an industry downturn could adversely affect our operating results.

Business conditions in the semiconductor industry may rapidly change from periods of strong demand and insufficient production to periods of weakened demand and overcapacity. The industry in general is characterized by:

• changes in product mix in response to changes in demand;

• alternating periods of overcapacity and production shortages, including shortages of raw materials supplies and manufacturing services;

• cyclical demand for semiconductors;

• significant price erosion;

• variations in manufacturing costs and yields;

• rapid technological change and the introduction of new products; and

• significant expenditures for capital equipment and product development.

These factors could harm our business and cause our operating results to suffer.

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Our dependence on subcontractors to assemble and test our products subjects us to a number of risks, including an inadequate supply of products and higher materials costs.

We depend on subcontractors for the assembly and testing of our products. The substantial majority of our products are assembled by subcontractors located outside of the United States. Assembly subcontractors generally work on narrow margins and have limited capital. We have encountered assembly subcontractors who have ceased or reduced production because of financial problems. We engage assembly subcontractors who operate while in insolvency proceedings or whose financial stability is uncertain. The unexpected cessation of production or reduction in production by one or more of our assembly subcontractors could adversely affect our production, our customer relations, our revenues and our financial condition. Our reliance on these subcontractors also involves the following significant risks:

• reduced control over delivery schedules and quality;

• the potential lack of adequate capacity during periods of excess demand;

• difficulties selecting and integrating new subcontractors;

• limited or no warranties by subcontractors or other vendors on products supplied to us;

• potential increases in prices due to capacity shortages and other factors;

• potential misappropriation of our intellectual property; and

• economic or political instability in foreign countries.

These risks may lead to delayed product delivery or increased costs, which would harm our profitability and customer relationships.

Further, we use only a limited number of subcontractors to assemble most of our products. If one or more of these key subcontractors experience financial, operational, production or quality assurance difficulties, we could experience a significant reduction or interruption in supply. Although we believe alternative subcontractors are available, our operating results could temporarily suffer until we engage one or more of those alternative subcontractors. Moreover, in engaging alternative subcontractors in exigent circumstances, our production costs could increase markedly.

We depend on external foundries to manufacture many of our products.

Of our net revenues for our fiscal year ended March 31, 2016, 47.4% came from wafers manufactured for us by a number of external foundries. In particular, the wafers for all of our microcontrollers are fabricated at external foundries. Our dependence on external foundries may grow.

Our relationships with our external foundries do not guarantee prices, delivery or lead times or wafer or product quantities sufficient to satisfy current or expected demand. Generally, these foundries manufacture our products on a purchase order basis. We provide these foundries with rolling forecasts of our production requirements. However, the ability of each foundry to provide wafers to us is limited by the foundry’s available capacity. At any given time, these foundries could choose to prioritize capacity for their own use or other customers or reduce or eliminate deliveries to us. If growth in demand for our products occurs, our external foundries may be unable or unwilling to allocate additional capacity to our needs, thereby limiting our revenue growth. Accordingly, we cannot be certain that these foundries will allocate sufficient capacity to satisfy our requirements. In addition, we cannot be certain that we will continue to do business with these or other foundries on terms as favorable as our current terms. If we are not able to obtain foundry capacity as required, our relationships with our customers could be harmed, we could be unable to fulfill contractual requirements and our revenues could be reduced or our growth limited. Moreover, even if we are able to secure foundry capacity, we may be required, either contractually or as a practical business matter, to utilize all of that capacity or incur penalties or an adverse effect to the business relationship. The costs related to maintaining foundry capacity could be expensive and could harm our operating results. Other risks associated with our reliance on external foundries include:

• the lack of control over delivery schedules;

• the unavailability of, or delays in obtaining access to, key process technologies;

• limited control over quality assurance, manufacturing yields and production costs; and

• potential misappropriation of our intellectual property.

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Our requirements typically represent a small portion of the total production of the external foundries that manufacture our wafers and products. One or more of these external foundries may not continue to produce wafers for us or continue to advance the process design technologies on which the manufacturing of our products is based. If we are required to transition production from one foundry to another, we may make large last-time buys of product at the foundry that we are exiting, which could eventually result in substantial inventory write-offs if semiconductors are not sold or utilized. These circumstances could harm our ability to deliver our products or increase our costs.

Our gross margin is dependent on a number of factors, including our level of capacity utilization.

Semiconductor manufacturing requires significant capital investment, leading to high fixed costs, including depreciation expense. We are limited in our ability to reduce fixed costs quickly in response to any shortfall in revenues. If we are unable to utilize our manufacturing, assembly and testing facilities at a high level, the fixed costs associated with these facilities will not be fully absorbed, resulting in lower gross margins. Increased competition and other factors may lead to price erosion, lower revenues and lower gross margins for us in the future.

Our success depends on our ability to manufacture our products efficiently.

We manufacture our products in facilities that are owned and operated by us, as well as in external wafer foundries and subcontract assembly facilities. The fabrication of semiconductors is a highly complex and precise process, and a substantial percentage of wafers could be rejected or numerous dies on each wafer could be nonfunctional as a result of, among other factors:

• contaminants in the manufacturing environment;

• defects in the masks used to print circuits on a wafer;

• manufacturing equipment failure; or

• wafer breakage.

For these and other reasons, we could experience a decrease in manufacturing yields. Additionally, if we increase our manufacturing output, the additional demands placed on existing equipment and personnel or the addition of new equipment or personnel may lead to a decrease in manufacturing yields. As a result, we may not be able to cost-effectively expand our production capacity in a timely manner.

We order materials and commence production in advance of anticipated customer demand. Therefore, revenue shortfalls may also result in inventory write-downs.

We typically plan our production and inventory levels based on our own expectations for customer demand. Actual customer demand, however, can be highly unpredictable and can fluctuate significantly. In response to anticipated long lead times to obtain inventory and materials, we order materials and production in advance of customer demand. This advance ordering and production may result in excess inventory levels or unanticipated inventory write-downs if expected orders fail to materialize.

If our goodwill, acquired intangible assets or long-lived assets become impaired, we may be required to record a significant charge to earnings.

Under generally accepted accounting principles, goodwill is required to be tested for impairment at least annually and we review our acquired intangible assets and long-lived assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill, acquired intangible assets or long-lived assets may not be recoverable include a decline in stock price and market capitalization, reduced future cash flows and slower growth rates in our industry. From time to time, we have recorded impairment charges and written down the value of goodwill.

Costs related to product defects and errata may harm our results of operations and business.

Costs associated with unexpected product defects and errata (deviations from published specifications) due to, for example, unanticipated problems in our manufacturing processes, include the costs of:

• writing off the value of inventory of defective products;

• disposing of defective products;

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• recalling defective products that have been shipped to customers;

• providing product replacements for, or modifications to, defective products; and/or

• defending against litigation related to defective products.

These costs could be substantial and may, therefore, increase our expenses and lower our gross margin. In addition, our reputation with our customers or users of our products could be damaged as a result of such product defects and errata, and the demand for our products could be reduced. These factors could harm our financial results and the prospects for our business.

Semiconductors for inclusion in consumer products have shorter product life cycles.

We believe that consumer products are subject to shorter product life cycles, because of technological change, consumer preferences, trendiness and other factors, than other types of products sold by our customers. Shorter product life cycles result in more frequent design competitions for the inclusion of semiconductors in next generation consumer products, which may not result in design wins for us. Shorter product life cycles may lead to more frequent circumstances where sales of existing products are reduced or ended.

Uncertain global macroeconomic conditions could adversely affect our results of operations and financial condition.

Uncertain global macroeconomic conditions that affect the economy and the economic outlook of the United States, Europe, China and other parts of the world could adversely affect our customers and vendors, which could adversely affect our results of operations and financial condition. These uncertainties, including, among other things, sovereign and foreign bank debt levels, the inability of national or international political institutions to effectively resolve economic or budgetary crises or issues, consumer confidence, unemployment levels, interest rates, availability of capital, fuel and energy costs, tax rates and the threat or outbreak of terrorism or public unrest, could adversely impact our customers and vendors, which could adversely affect us. Recessionary conditions and depressed levels of consumer and commercial spending may cause customers to reduce, modify, delay or cancel plans to purchase our products and may cause vendors to reduce their output or change their terms of sales. We generally sell products to customers with credit payment terms. If customers’ cash flow or operating or financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, they may not be able to pay, or may delay payment to us. Likewise, for similar reasons vendors may restrict credit or impose different payment terms. Any inability of current or potential customers to pay us for our products or any demands by vendors for different payment terms may adversely affect our results of operations and financial condition.

Economic conditions and regulatory changes leading up to and following the United Kingdom’s likely exit from the European Union could have a material adverse effect on our business and results of operations.

Following a referendum in which voters in the United Kingdom, or U.K., approved an exit from the European Union, it is expected that the U.K. government will initiate a process to leave the European Union and begin negotiating the terms of the U.K.’s future relationship with the European Union. We face uncertainty regarding the impact of the likely exit of the U.K. from the European Union. Adverse consequences such as deterioration in global economic conditions, stability in global financial markets, volatility in currency exchange rates, new or increased tariffs or adverse changes in regulation of the cross-border agreements could have a negative impact on our operations, financial condition and results of operations.

Our debt agreements contain certain restrictions that may limit our ability to operate our business.

The agreements governing our debt contain, and any other future debt agreement we enter into may contain, restrictive covenants that limit our ability to operate our business, including, in each case subject to certain exceptions, restrictions on our ability to:

• incur additional indebtedness;

• grant liens;

• consolidate, merge or sell our assets, unless specified conditions are met;

• acquire other business organizations;

• make investments;

• redeem or repurchase our stock; and

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• change the nature of our business.

In addition, our debt agreements contain financial covenants and additional affirmative and negative covenants. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions. If we are not able to comply with all of these covenants for any reason, some or all of our outstanding debt could become immediately due and payable and the incurrence of additional debt under the credit facilities provided by the debt agreements would not be allowed. If our cash is utilized to repay any outstanding debt, depending on the amount of debt outstanding, we could experience an immediate and significant reduction in working capital available to operate our business. Related to these risks, our lenders waived a default under our existing Revolving Credit Agreement caused by the leverage ratio, which compared total funded indebtedness as of March 31, 2016 to EBITDA for the four fiscal quarters ended March 31, 2016. The leverage ratio minimally exceeded the contractually agreed ratio of 2:1. As of June 30, 2016, we complied with all of the financial covenants.

As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be beneficial to us, such as strategic acquisitions or joint ventures.

If we default on our Revolving Credit Agreement, most of our assets may become subject to security interests, which could lead to our lenders taking possession, selling or otherwise disposing of such assets, or to bankruptcy to forestall such actions.

We estimate tax liabilities, the final determination of which is subject to review by domestic and international taxation authorities.

We are subject to income taxes and other taxes in both the United States and foreign jurisdictions in which we currently operate or have historically operated. We are also subject to review and audit by both domestic and foreign taxation authorities. The determination of our worldwide provision for income taxes and current and deferred tax assets and liabilities requires significant judgment and estimation. The provision for income taxes can be adversely affected by a variety of factors, including but not limited to changes in tax laws, regulations and accounting principles, including accounting for uncertain tax positions, or interpretation of those changes. Significant judgment is required to determine the recognition and measurement attributes prescribed in the authoritative guidance issued by Financial Accounting Standards Board, or FASB, in connection with accounting for income taxes. Although we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our consolidated financial statements and may materially affect our income tax provision, net income, goodwill or cash flows in the period or periods for which such determination is made.

Our intellectual property revenues are uncertain and unpredictable in timing and amount.

We are unable to discern a pattern in or otherwise predict the amount of any payments for the sale or licensing of intellectual property that we may receive. Consequently, we are unable to plan on the timing of intellectual property revenues and our results of operations may be adversely affected by a reduction in the amount of intellectual property revenues.

Our markets are subject to technological change and our success depends on our ability to develop and introduce new products.

The markets for our products are characterized by:

• changing technologies;

• changing customer needs;

• frequent new product introductions and enhancements;

• increased integration with other functions; and

• product obsolescence.

To develop new products for our target markets, we must develop, gain access to and use leading technologies in a cost-effective and timely manner and continue to expand our technical and design expertise. Failure to do so could cause us to lose our competitive position and seriously impact our future revenues.

Products or technologies developed by others may render our products or technologies obsolete or non-competitive. A fundamental shift in technologies in our product markets would have a material adverse effect on our competitive position within the industry.

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Our revenues are dependent upon our products being designed into our customers’ products.

Many of our products are incorporated into customers’ products or systems at the design stage. The value of any design win largely depends upon the customer’s decision to manufacture the designed product in production quantities, the commercial success of the customer’s product and the extent to which the design of the customer’s electronic system also accommodates incorporation of components manufactured by our competitors. In addition, our customers could subsequently redesign their products or systems so that they no longer require our products. The development of the next generation of products by our customers generally results in new design competitions for semiconductors, which may not result in design wins for us, potentially leading to reduced revenues and profitability. We may not achieve design wins or our design wins may not result in future revenues.

We could be harmed by intellectual property litigation.

As a general matter, the semiconductor industry is characterized by substantial litigation regarding patent and other intellectual property rights. We have been sued for purported patent infringement and have been accused of infringing the intellectual property rights of third parties. We also have certain indemnification obligations to customers and suppliers with respect to the infringement of third party intellectual property rights by our products. We could incur substantial costs defending ourselves and our customers and suppliers from any such claim. Infringement claims or claims for indemnification, whether or not proven to be true, may divert the efforts and attention of our management and technical personnel from our core business operations and could otherwise harm our business. For example, in June 2000, we were sued for patent infringement by International Rectifier Corporation. The case was ultimately resolved in our favor, but not until October 2008. In the interim, the U.S. District Court entered multimillion dollar judgments against us on two different occasions, each of which was subsequently vacated.

In the event of an adverse outcome in any intellectual property litigation, we could be required to pay substantial damages, cease the development, manufacturing, use and sale of infringing products, discontinue the use of certain processes or obtain a license from the third party claiming infringement with royalty payment obligations upon us. An adverse outcome in an infringement action could materially and adversely affect our financial condition, results of operations and cash flows.

We may not be able to protect our intellectual property rights adequately.

Our ability to compete is affected by our ability to protect our intellectual property rights. We rely on a combination of patents, trademarks, copyrights, trade secrets, confidentiality procedures and non-disclosure and licensing arrangements to protect our intellectual property rights. Despite these efforts, we cannot be certain that the steps we take to protect our proprietary information will be adequate to prevent misappropriation of our technology, or that our competitors will not independently develop technology that is substantially similar or superior to our technology. More specifically, we cannot assure that our pending patent applications or any future applications will be approved, or that any issued patents will provide us with competitive advantages or will not be challenged by third parties. Nor can we assure that, if challenged, our patents will be found to be valid or enforceable, or that the patents of others will not have an adverse effect on our ability to do business. We may also become subject to or initiate patentability or interference proceedings in the U.S. Patent and Trademark Office, which can demand significant financial and management resources and could harm our financial results. Also, others may independently develop similar products or processes, duplicate our products or processes or design their products around any patents that may be issued to us.

Because our products typically have lengthy sales cycles, we may experience substantial delays between incurring expenses related to research and development and the generation of revenues.

The time from initiation of design to volume production of new semiconductors often takes 18 months or longer. We first work with customers to achieve a design win, which may take nine months or longer. Our customers then complete the design, testing and evaluation process and begin to ramp up production, a period that may last an additional nine months or longer. As a result, a significant period of time may elapse between our research and development efforts and our realization of revenues, if any, from volume purchasing of our products by our customers.

The markets in which we participate are intensely competitive.

Many of our target markets are intensely competitive. Our ability to compete successfully in our target markets depends on the following factors:

• proper new product definition;

• product quality, reliability and performance;

• product features;

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• price;

• timely delivery of products;

• technical support and service;

• design and introduction of new products;

• market acceptance of our products and those of our customers; and

• breadth of product line.

In addition, our competitors or customers may offer new products based on new technologies, industry standards or end-user or customer requirements, including products that have the potential to replace our products or provide lower cost or higher performance alternatives to our products. The introduction of new products by our competitors or customers could render our existing and future products obsolete or unmarketable.

Our primary power semiconductor competitors include Fairchild Semiconductor, Fuji, Hitachi, Infineon, Microsemi, Mitsubishi, On Semiconductor, Powerex, Renesas Electronics, Semikron International, STMicroelectronics, Toshiba and Vishay Intertechnology. Our IC products compete principally with those of Atmel, Cypress Semiconductor, NXP Semiconductors, Microchip, NEC, Renesas Electronics and Silicon Labs. Our RF power semiconductor competitors include Microsemi and Qorvo. Many of our competitors have greater financial, technical, marketing and management resources than we have. Some of these competitors may be able to sell their products at prices at which it would be unprofitable for us to sell our products or benefit from established customer relationships that provide them with a competitive advantage. We cannot assure that we will be able to compete successfully in the future against existing or new competitors or that our operating results will not be adversely affected by increased price competition.

We rely on our distributors and sales representatives to sell many of our products.

Most of our products are sold to distributors or through sales representatives. Our distributors and sales representatives could reduce or discontinue sales of our products. They may not devote the resources necessary to sell our products in the volumes and within the time frames that we expect. In addition, we depend upon the continued viability and financial resources of these distributors and sales representatives, some of which are small organizations with limited working capital. These distributors and sales representatives, in turn, depend substantially on general economic conditions and conditions within the semiconductor industry. We believe that our success will continue to depend upon these distributors and sales representatives. Foreign distributors are typically granted longer payment terms, resulting in higher accounts receivable balances for a given level of sales than domestic distributors. Our risk of loss from the financial insolvency of distributors is, therefore, disproportionally weighted to foreign distributors. If any significant distributor or sales representative experiences financial difficulties, or otherwise becomes unable or unwilling to promote and sell our products, our business could be harmed. For example, All American Semiconductor, Inc., one of our former distributors, filed for bankruptcy in April 2007.

Our future success depends on the continued service of management and key engineering personnel and our ability to identify, hire and retain additional personnel.

Our success depends upon our ability to attract and retain highly skilled technical, managerial, marketing and finance personnel, and, to a significant extent, upon the efforts and abilities of Nathan Zommer, Ph.D., our Chief Executive Officer, and other members of senior management. The loss of the services of one or more of our senior management or other key employees could adversely affect our business. We do not maintain key person life insurance on any of our officers, employees or consultants. There is intense competition for qualified employees in the semiconductor industry, particularly for highly skilled design, application and test engineers. We may not be able to continue to attract and retain engineers or other qualified personnel necessary for the development of our business or to replace engineers or other qualified individuals who could leave us at any time in the future. If we grow, we expect increased demands on our resources, and growth would likely require the addition of new management and engineering staff as well as the development of additional expertise by existing management. If we lose the services of or fail to recruit key engineers or other technical and management personnel, our business could be harmed.

Acquisitions, expansion, technological and administrative changes and software conversions and updates place a significant strain on our information systems.

Presently, because of our acquisitions, we are operating a number of different information systems that are not integrated, some of which are no longer supported by software vendors. As a consequence, we use spreadsheets, which are prepared by individuals rather than automated systems, in our accounting. In our accounting, we perform many manual reconciliations and other manual steps, which result in a high risk of errors. Manual steps also increase the possibility of control deficiencies and material weaknesses.

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If we do not adequately manage and evolve our financial reporting and managerial systems and processes, our ability to manage or grow our business may be harmed. Our ability to successfully implement our goals and comply with regulations, requires an effective planning and management system and process. We will need to continue to improve existing, and implement new, operational and financial systems, procedures and controls to manage our business effectively in the future.

In improving, consolidating, changing or updating our operational and financial systems, procedures and controls, we would expect to periodically implement new or different software and other systems that will affect our internal operations regionally or globally. The conversion process from one system to another is complex and could require, among other things, that data from the existing system be made compatible with the upgraded or different system.

In connection with any of the foregoing, we could experience errors, interruptions, delays, cessations of service and other inefficiencies, which could adversely affect our business. Any error, delay, disruption, interruption or cessation, including with respect to any new or different systems, software programs, procedures or controls, could harm our ability to forecast sales demand, manage our supply chain, achieve accuracy in the conversion of electronic data and record and report financial and management information on a timely and accurate basis. In addition, as we add or change functionality, transition or convert to different systems or programs or integrate additional data in connection with an acquisition, problems could arise that we have not foreseen. Such problems could adversely impact our ability to do the following in a timely manner: provide quotes; take customer orders; ship products; provide services and support to our customers; bill and track our customers; fulfill contractual obligations; and otherwise run our business. Failure to properly or adequately address these issues could result in the diversion of management’s attention and resources, adversely affect our ability to manage our business, increase expenses, or adversely affect our results of operations, cash flows, stock price or reputation.

System security risks, data protection breaches and cyber-attacks could disrupt our operations and any such disruption could reduce our expected revenues, increase our expenses, damage our reputation or adversely affect our stock price.

Computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise our intellectual property or other confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We manage and store proprietary information and sensitive or confidential data relating to our business and the businesses of third parties. Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us or our partners or customers, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, could expose us, our partners and customers to a risk of loss or misuse of this information; result in regulatory investigations, fines, litigation and potential liability for us; damage our brand and reputation; or otherwise harm our business. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Delayed sales, lower margins or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation.

Regulations related to conflict minerals create additional compliance risks and force us to incur additional expenses.

The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo, or DRC, and adjoining countries. As a result, the SEC established annual disclosure and reporting requirements for those companies who use “conflict” minerals mined from the DRC and adjoining countries in their products. These requirements could affect the sourcing and availability of minerals used in the manufacture of our products. As a result, we cannot ensure that we will be able to obtain minerals at competitive prices. Moreover, there are additional costs associated with complying with the extensive due diligence and audit procedures required by the SEC. In addition, we may face reputational challenges with our customers and other stakeholders as we have in the past and may in the future be unable to sufficiently verify the origins of all minerals used in our products. Finally, these rules bring implementation challenges. We may not successfully implement effective procedures to timely or adequately comply with these rules.

We depend on a limited number of suppliers for our substrates, most of whom we do not have long term agreements with.

We purchase the bulk of our silicon substrates from a limited number of vendors, most of whom we do not have long term supply agreements with. Any of these suppliers could reduce or terminate our supply of silicon substrates at any time. Our reliance on a limited number of suppliers involves several risks, including potential inability to obtain an adequate supply of silicon substrates and reduced control over the price, timely delivery, reliability and quality of the silicon substrates. We cannot assure that problems will not occur in the future with suppliers.

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Increasing raw material prices could impact our profitability.

Our products use large amounts of silicon, metals and other materials. From time to time, we have experienced price increases for many of these items. If we are unable to pass price increases for raw materials onto our customers, our gross margins and profitability could be adversely affected.

We may not be able to increase production capacity to meet the present and future demand for our products.

The semiconductor industry has been characterized by periodic limitations on production capacity. These limitations may result in longer lead times for product delivery than desired by many of our customers. If we are unable to increase our production capacity to meet future demand, some of our customers may seek other sources of supply, our future growth may be limited or our results of operations may be adversely affected.

We face the risk of financial exposure to product liability claims alleging that the use of products that incorporate our semiconductors resulted in adverse effects.

Approximately 9.7% of our net revenues for the fiscal year ended March 31, 2016 were derived from sales of products used in medical devices, such as defibrillators. Product liability risks may exist even for those medical devices that have received regulatory approval for commercial sale. We cannot be sure that the insurance that we maintain against product liability will be adequate to cover our losses. Any defects in our semiconductors used in these devices, or in any other product, could result in significant product liability costs to us.

Our results of operations could vary as a result of the methods, estimates, and judgments that we use in applying our accounting policies.

The methods, estimates and judgments that we use in applying our accounting policies have a significant impact on our results of operations (see “Critical Accounting Policies and Significant Management Estimates” in Part I, Item 2 of this Form 10-Q). Such methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that lead us to change our methods, estimates and judgments. Changes in those methods, estimates and judgments could significantly affect our results of operations.

We are exposed to various risks related to the regulatory environment.

We are subject to various risks related to new, different, inconsistent or even conflicting laws, rules and regulations that may be enacted by legislative bodies and/or regulatory agencies in the countries in which we operate; disagreements or disputes between national or regional regulatory agencies; and the interpretation and application of laws, rules and regulations. If we are found by a court or regulatory agency not to be in compliance with applicable laws, rules or regulations, our business, financial condition and results of operations could be materially and adversely affected.

In addition, approximately 9.7% of our net revenues for the fiscal year ended March 31, 2016 were derived from the sale of products included in medical devices that are subject to extensive regulation by numerous governmental authorities in the United States and internationally, including the U.S. Food and Drug Administration, or FDA. The FDA and certain foreign regulatory authorities impose numerous requirements for medical device manufacturers to meet, including adherence to Good Manufacturing Practices, or GMP, regulations and similar regulations in other countries, which include testing, control and documentation requirements. Ongoing compliance with GMP and other applicable regulatory requirements is monitored through periodic inspections by federal and state agencies, including the FDA, and by comparable agencies in other countries. Our failure to comply with applicable regulatory requirements could prevent our products from being included in approved medical devices or result in damages or other compensation payable to medical device manufacturers.

Our business could also be harmed by delays in receiving or the failure to receive required approvals or clearances, the loss of obtained approvals or clearances or the failure to comply with existing or future regulatory requirements.

We invest in companies for strategic reasons and may not realize a return on our investments.

We make investments in companies to further our strategic objectives and support our key business initiatives. Such investments include investments in equity securities of public companies and investments in non-marketable equity securities of private companies, which range from early-stage companies that are often still defining their strategic direction to more mature companies whose products or technologies may directly support a product or initiative. The success of these companies is dependent on product development, market acceptance, operational efficiency and other key business success factors. The private companies in which we

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invest may fail for operational reasons or because they may not be able to secure additional funding, obtain favorable investment terms for future financings or take advantage of liquidity events such as initial public offerings, mergers and private sales. If any of these private companies fail, we could lose all or part of our investment in that company. If we determine that an other-than-temporary decline in the fair value exists for the equity securities of the public and private companies in which we invest, we write down the investment to its fair value and recognize the related write-down as an investment loss. Furthermore, when the strategic objectives of an investment have been achieved, or if the investment or business diverges from our strategic objectives, we may decide to dispose of the investment, even at a loss. Our investments in non-marketable equity securities of private companies are not liquid, and we may not be able to dispose of these investments on favorable terms or at all. The occurrence of any of these events could negatively affect our results of operations.

Our ability to access capital markets could be limited.

From time to time, we may need to access the capital markets to obtain long-term financing. Although we believe that we can continue to access the capital markets on acceptable terms and conditions, our flexibility with regard to long-term financing activity could be limited by our existing capital structure, our credit ratings and the health of the semiconductor industry. In addition, many of the factors that affect our ability to access the capital markets, such as the liquidity of the overall capital markets and the current state of the economy, are outside of our control. There can be no assurance that we will continue to have access to the capital markets on favorable terms.

Geopolitical instability, war, terrorist attacks and terrorist threats, and government responses thereto, may negatively affect all aspects of our operations, revenues, costs and stock price.

Any such event may disrupt our operations or those of our customers or suppliers. Our markets currently include South Korea, Taiwan, Russia and Israel, which are currently experiencing political instability. Additionally, we have accounting and administrative operations in the Philippines, an external foundry and some of our design and sales operations are located in South Korea and assembly subcontractors are located in Indonesia, the Philippines and South Korea.

Business interruptions may damage our facilities or those of our suppliers.

Our operations and those of our suppliers are vulnerable to interruption by fire, earthquake, flood and other natural disasters, as well as power loss, telecommunications failure and other events beyond our control. We do not have a detailed disaster recovery plan and do not have backup generators. Our facilities in California are located near major earthquake faults and have experienced earthquakes in the past. For example, the March 2011 earthquake in Japan adversely affected the operations of some of our Japanese suppliers, which limited the availability of certain production inputs to us for a period of time. If a natural disaster occurs, our ability to conduct our operations could be seriously impaired, which could harm our business, financial condition and results of operations and cash flows. We cannot be sure that the insurance we maintain against general business interruptions will be adequate to cover all our losses.

We may be affected by environmental laws and regulations.

We are subject to a variety of laws, rules and regulations related to the use, storage, handling, discharge and disposal of certain chemicals and gases used in our manufacturing process. Any of those regulations could require us to acquire expensive equipment or to incur substantial other expenses to comply with them. If we incur substantial additional expenses, product costs could significantly increase. Failure to comply with present or future environmental laws, rules and regulations could result in fines, suspension of production or cessation of operations.

Nathan Zommer, Ph.D. owns a significant interest in our common stock.

Nathan Zommer, Ph.D., our Chief Executive Officer, beneficially owned, as of July 26, 2016, approximately 21.3% of the outstanding shares of our common stock. As a result, Dr. Zommer can exercise significant control over all matters requiring stockholder approval, including the election of the Board of Directors. His holdings could result in a delay of, or serve as a deterrent to, any change in control of our company, which may reduce the market price of our common stock.

Our stock price is volatile.

The market price of our common stock has fluctuated significantly to date. The future market price of our common stock may also fluctuate significantly in the event of:

• variations in our actual or expected quarterly operating results;

• announcements or introductions of new products;

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• technological innovations by our competitors or development setbacks by us;

• conditions in semiconductor markets;

• the commencement or adverse outcome of litigation;

• changes in analysts’ estimates of our performance or changes in analysts’ forecasts regarding our industry, competitors or customers;

• announcements of merger or acquisition transactions or a failure to achieve the expected benefits of an acquisition as rapidly or to the extent anticipated by participants in the stock market;

• terrorist attack or war;

• sales of our common stock by one or more members of management, including Nathan Zommer, Ph.D., our Chief Executive Officer; or

• general economic and market conditions.

In addition, the stock market in recent years has experienced extreme price and volume fluctuations that have affected the market prices of many high technology companies, including semiconductor companies. These fluctuations have often been unrelated or disproportionate to the operating performance of companies in our industry, and could harm the market price of our common stock.

The anti-takeover provisions of our certificate of incorporation and of the Delaware General Corporation Law may delay, defer or prevent a change of control.

Our Board of Directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by our stockholders. The rights of the holders of common stock will be subject to, and may be harmed by, the rights of the holders of any shares of preferred stock that may be issued in the future. The issuance of preferred stock may delay, defer or prevent a change in control because the terms of any issued preferred stock could potentially prohibit our consummation of any merger, reorganization, sale of substantially all of our assets, liquidation or other extraordinary corporate transaction, without the approval of the holders of the outstanding shares of preferred stock. In addition, the issuance of preferred stock could have a dilutive effect on our stockholders.

Our stockholders must give substantial advance notice prior to the relevant meeting to nominate a candidate for director or present a proposal to our stockholders at a meeting. These notice requirements could inhibit a takeover by delaying stockholder action. The Delaware anti-takeover law restricts business combinations with some stockholders once the stockholder acquires 15% or more of our common stock. The Delaware statute makes it more difficult for us to be acquired without the consent of our Board of Directors and management.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

See the Index to Exhibits, which is incorporated by reference herein.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

IXYS CORPORATION
By:	/s/ Uzi Sasson
	Uzi Sasson, President and Chief Financial Officer (Principal Financial Officer)

Date: August 2, 2016

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EXHIBIT INDEX

Exhibit No.	Description
10.1 31.1	IXYS Corporation 2016 Equity Incentive Plan. (1) Certificate of Chief Executive Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of Chief Financial Officer required under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification required under Section 906 of the Sarbanes-Oxley Act of 2002. (2)
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

(1) Management contract or compensatory plan or arrangement.

(2) This exhibit is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1933, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities and Exchange Act of 1993, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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EX-10.1

Exhibit 10.1

IXYS CORPORATION

2016 EQUITY INCENTIVE PLAN

(Effective June 9, 2016)

IXYS CORPORATION hereby adopts in its entirety the IXYS Corporation 2016 Equity Incentive (“Plan”), as of June 9, 2016 (“Plan Adoption Date”). Unless otherwise defined, terms with initial capital letters are defined in Section 2 below.

SECTION 1

BACKGROUND AND PURPOSE

1.1 Background The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (SARs), Stock Awards, and Restricted Stock Units.

1.2 Purpose of the Plan The Plan is intended to attract, motivate and retain the following individuals: (a) employees of the Company or its Affiliates; (b) consultants who provide significant services to the Company or its Affiliates and (c) directors of the Company or any of its Affiliates who are employees of neither the Company nor any Affiliate. The Plan is also designed to encourage stock ownership by such individuals, thereby aligning their interests with those of the Company’s shareholder.

SECTION 2

DEFINITIONS

The following words and phrases shall have the following meanings unless a different meaning is plainly required by the context:

2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the Act shall include such section, any valid rules or regulations promulgated under such section, and any comparable provisions of any future legislation, rules or regulations amending, supplementing or superseding any such section, rule or regulation.

2.2 “Administrator” means, collectively the Board, and/or one or more Committees, and/or one or more executive officers of the Company designated by the Board to administer the Plan or specific portions thereof; provided, however, that Awards to Section 16 Persons may only be administered by a committee of Independent Directors (as defined in Section 2.23) or the Board as a whole. The Plan permits coextensive administrative authority; provided, however, that the scope of any such authority is specifically approved by the Board in accordance with the Plan.

2.3 “Affiliate” means any corporation or any other entity (including, but not limited to, Subsidiaries, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.

2.4 “Applicable Law” means the legal requirements relating to the administration of Options, SARs, Stock Awards, Restricted Stock Units and similar incentive plans under any applicable laws, including but not limited to the laws of the United States and any applicable foreign country, including employment, labor, privacy, securities, and tax laws, the Code, and applicable rules and regulations promulgated by the Nasdaq, New York Stock Exchange, American Stock Exchange or the requirements of any other stock exchange or quotation system upon which the Shares may then be listed or quoted.

2.5 “Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, SARs, Stock Awards, and Restricted Stock Units.

2.6 “Award Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan, including the Grant Date.

2.7 “Board” or “Board of Directors” means the Board of Directors of the Company.

2.8 “Change in Control” means the occurrence of any of the following:

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2.8.1 Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting capital stock, other than a group of two or more persons not (A) acting in concert for the purpose of acquiring, holding or disposing of such stock or (B) otherwise required to file any form or report with any governmental agency or regulatory authority having jurisdiction over the Company which requires the reporting of any change in control;

2.8.2 The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets (whether by stock sale, merger, consolidation or otherwise);

2.8.3 The consummation of a liquidation or dissolution of the Company; or

2.8.4 The consummation of a merger or consolidation of the Company with any other corporation, other than (i) a merger or consolidation for the sole purpose of changing the Company’s jurisdiction of incorporation or (ii) a consolidation or merger of the Company in which the holders of the voting capital stock of the Company immediately prior to the consolidation or merger (other than Persons who are parties to such consolidation or merger and their respective Affiliates) hold at least fifty percent (50%) of the voting power represented by the Company’s then outstanding voting capital stock of the Company or the surviving entity (or its parent entity) immediately after the consolidation or merger.

2.9 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

2.10 “Committee” means any committee appointed by the Board of Directors to administer the Plan.

2.11 “Company” means IXYS Corporation, or any successor thereto.

2.12 “Consultant” means any consultant, independent contractor or other person who provides significant services to the Company or its Affiliates or any employee or Affiliate of any of the foregoing, but who is neither an Employee nor a Director.

2.13 “Continuous Status” as an Employee, Consultant or Director means that a Participant’s employment or service relationship with the Company or any Affiliate is not interrupted or terminated. “Continuous Status” shall not be considered interrupted in the following cases: (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and any Subsidiary or successor. A leave of absence approved by the Company shall include sick leave, military leave or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no leave of absence may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If such reemployment is approved by the Company but not guaranteed by statute or contract, then such employment will be considered terminated on the ninety-first (91st) day of such leave and on such date any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified Stock Option. In the event a Participant’s status changes among the positions of Employee, Director and Consultant, the Participant’s Continuous Status as an Employee, Director or Consultant shall be deemed to be continuous and uninterrupted.

2.14 “Director” means any individual who is a member of the Board of Directors of the Company or an Affiliate of the Company.

2.15 “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

2.16 “Employee” means any individual who is a common-law employee of the Company or of an Affiliate.

2.17 “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option, and the price used to determine the amount of cash or number of Shares payable to a Participant upon the exercise of a SAR.

2.18 “Fair Market Value” means, as of any date, provided the Common Stock is listed on an established stock exchange or a national market system, including without limitation the NASDAQ, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock on the Grant Date of the Award. If no sales were reported on such Grant Date of the Award, the Fair Market Value of a share of Common Stock shall be the closing price for such stock as quoted on the NASDAQ (or the exchange with the greatest volume of trading in the Common Stock) on the last market trading day with reported sales prior to the date of determination. In the case where the Company is not listed on an established stock exchange or national market system, Fair Market Value shall be determined by the Board in good faith in accordance with Code Section 409A and the applicable Treasury regulations.

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2.19 “Fiscal Year” means a fiscal year of the Company.

2.20 “Full-Value Award Limitation” means an aggregate limit of two hundred and fifty thousand (250,000) Shares, which is the total number of Shares that may be granted to all Participants combined, as “full value awards,” which includes both Stock Awards and Restricted Stock Units.

2.21 “Grant Date” means the date the Administrator approves the Award.

2.22 “Incentive Stock Option” means an Option to purchase Shares, which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code.

2.23 “Independent Director” means a Nonemployee Director who is (i) a “nonemployee director” within the meaning of Section 16b-3 of the 1934 Act and (ii) “independent” as determined under the applicable rules of the NASDAQ, as either of these definitions may be modified or supplemented from time to time.

2.24 “Misconduct” shall include commission of any act in competition with any activity of the Company (or any Affiliate) or any act contrary or harmful to the interests of the Company (or any Affiliate) as determined in good faith by the Administrator and shall include, without limitation: (a) conviction of a felony or crime involving moral turpitude or dishonesty, (b) violation of Company (or any Affiliate) policies, with or acting against the interests of the Company (or any Affiliate), including employing or recruiting any present, former or future employee of the Company (or any Affiliate), (c) misuse of any confidential, secret, privileged or non-public information relating to the Company’s (or any Affiliate’s) business, or (d) participating in a hostile takeover attempt of the Company or an Affiliate. The foregoing definition shall not be deemed to be inclusive of all acts or omissions that the Company (or any Affiliate) may consider as Misconduct for purposes of the Plan.

2.25 “NASDAQ” means The NASDAQ Stock Market, LLC.

2.26 “Nonemployee Director” means a Director who is not employed by the Company or an Affiliate.

2.27 “Nonqualified Stock Option” means an option to purchase Shares that is not intended to be an Incentive Stock Option.

2.28 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

2.29 “Participant” means an Employee, Consultant or Nonemployee Director who has an outstanding Award.

2.30 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Administrator, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement, including without limitation goals tied to individual objectives and/or the Company’s (or a business unit’s) return on assets, return on shareholders’ equity, efficiency ratio, earnings per share, net income, or other financial measures determined in accordance with U.S. generally accepted accounting principles (“GAAP”), with or without adjustments determined by the Administrator. The foregoing definition shall not be deemed to be inclusive of all Performance Goals for purposes of this Plan. The Performance Goals may differ from Participant to Participant and from Award to Award.

2.31 “Restricted Stock Units” means an Award granted to a Participant pursuant to Section 8 of the Plan that entitles the Participant to receive a prescribed number of Shares, or the equivalent value in cash, upon achievement of Performance Goals associated with such Award. The Participant’s Award Agreement shall specify whether the Restricted Stock Units will be settled in Shares or cash.

2.32 “Period of Restriction” means the period during which Stock Awards are subject to restrictions that subject the Shares to a substantial risk of forfeiture. As provided in Section 7, such restrictions may be based on the passage of time in which case the restrictions may lapse over the Period of Restriction, the achievement of Performance Goals, or the occurrence of other events as determined by the Administrator, in its discretion.

2.33 “Plan” means this IXYS Corporation 2016 Equity Incentive Plan, as set forth in this instrument and as hereafter amended from time to time.

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2.34 “Rule 16b-3” means the rule so designated promulgated under Section 16 of the 1934 Act, and any future rule or regulation amending, supplementing or superseding such rule.

2.35 “SEC” means the U.S. Securities Exchange Commission.

2.36 “Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the 1934 Act.

2.37 “Shares” means shares of common stock of the Company.

2.38 “Stock Appreciation Right” or “SAR” means an Award granted to a Participant pursuant to Section 6. Upon exercise, a SAR gives a Participant a right to receive a payment in cash, or the equivalent value in Shares, equal to the difference between the Fair Market Value of the Shares on the exercise date and the Exercise Price. Both the number of SARs and the Exercise Price are determined on the Grant Date. For example, assume a Participant is granted 100 SARs at an Exercise Price of $10 and the award agreement specifies that the SARs will be settled in Shares. Also assume that the SARs are exercised when the underlying Shares have a Fair Market Value of $20 per Share. Upon exercise of the SAR, the Participant is entitled to receive 50 Shares [(($20-$10)*100)/$20].

2.39 “Stock Awards” means an Award granted to a Participant pursuant to Section 7. A Stock Award constitutes a transfer of ownership of Shares to a Participant from the Company. Such transfer may be subject to restrictions against transferability, assignment, and hypothecation. Under the terms of the Award, the restrictions against transferability are removed when the Participant has met the specified vesting requirement. Shares granted pursuant to a Stock Award shall vest immediately upon the lapsing of the applicable Period of Restriction (if any). Stock Awards may also be granted without any restrictions or vesting requirements. Vesting may be based on continued employment or service over a stated service period, or on the attainment of specified Performance Goals. If employment or service is terminated prior to vesting, the unvested Shares revert back to the Company.

2.40 “Subsidiary” means any corporation, LLC or partnership (collectively referred to as “Entities”) in an unbroken chain of Entities beginning with the Company if each of the Entities other than the last Entity in the unbroken chain then owns fifty percent (50%) or more of the total combined voting power in one of the other Entities in such chain.

SECTION 3

ADMINISTRATION

3.1 The Administrator. The Administrator, if not the Board of Directors, shall be appointed by the Board of Directors from time to time. Grants of authority in a committee charter shall be deemed appointment.

3.2 Authority of the Administrator. It shall be the duty of the Administrator to administer the Plan in accordance with the Plan’s provisions and in accordance with Applicable Law. The Administrator, if the Board of Directors or a Committee, shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the following: (a) which Employees, Consultants and Directors shall be granted Awards; (b) the terms and conditions of the Awards at initial grant and any subsequent revisions or changes to the terms and conditions of Awards, including, but not limited to, changes to, or removal of restrictions on, outstanding Awards relating to vesting, Period of Restriction or exercisability periods, (c) interpretation of the Plan, (d) adoption of rules for the administration, interpretation and application of the Plan as are consistent therewith and (e) interpretation, amendment or revocation of any such rules.

3.3 Decisions Binding. All determinations and decisions made by the Administrator shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by Applicable Law.

SECTION 4

SHARES SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to adjustment, as provided in Section 4.3, the total number of Shares initially available for grant under the Plan shall be two million (2,000,000). Shares granted under the Plan may be authorized but unissued Shares or reacquired Shares bought on the market or otherwise. Awards settled in cash shall not count against the limitation set forth in this Section 4.1.

4.2 Reversion of Shares to the Plan. If any Award made under the Plan expires, or is forfeited or cancelled, the Shares underlying such Awards shall become available for future Awards under the Plan.

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4.3 Adjustments in Awards and Authorized Shares. The number of Shares covered by the Plan, each outstanding Award, and the per Share exercise price of each such Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, recapitalization, spin-off, combination, reclassification, the payment of a stock dividend on the common stock or any other increase or decrease in the number of such Shares of common stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of Shares of stock of any class, or securities convertible into Shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of common stock subject to an Option.

4.4 Legal Compliance. Shares shall not be issued pursuant to the making or exercise of an Award unless the exercise of Options and rights and the issuance and delivery of Shares shall comply with the Securities Act of 1933, as amended, the 1934 Act and other Applicable Law, and shall be further subject to the approval of counsel for the Company with respect to such compliance. Any Award made in violation hereof shall be null and void.

4.5 Investment Representations. As a condition to the exercise of an Option or other right, the Company may require the person exercising such Option or right to represent and warrant at the time of exercise that the Shares are being acquired only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

SECTION 5

STOCK OPTIONS

The provisions of this Section 5 are applicable to Options granted to Employees, Consultants and Nonemployee Directors. Such Participants shall also be eligible to receive other types of Awards as set forth in the Plan.

5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted at any time and from time to time as determined by the Administrator in its discretion. The Administrator may grant Incentive Stock Options, Nonqualified Stock Options, or a combination thereof, and the Administrator, in its discretion and subject to Sections 4.1, shall determine the number of Shares subject to each Option.

5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, any conditions to exercise the Option, and such other terms and conditions as the Administrator, in its discretion, shall determine. The Award Agreement shall also specify whether the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option.

5.3 Exercise Price. The Administrator shall determine the Exercise Price for each Option subject to the provisions of this Section 5.3.

5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock Option, the per Share exercise price shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date, as determined by the Administrator.

5.3.2 Incentive Stock Options. The grant of Incentive Stock Options shall be subject to the following limitations:

(a) The Exercise Price of an Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code) owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the Exercise Price shall be not less than one hundred and ten percent (110%) of the Fair Market Value of a Share on the Grant Date;

(b) Incentive Stock Options may be granted only to persons who are, as of the Grant Date, Employees of the Company or a Subsidiary, and may not be granted to Consultants or Nonemployee Directors.

(c) To the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any parent or Subsidiary) exceeds $100,000, the Options to acquire Shares in excess of such amount shall be treated as Nonqualified Stock Options. For purposes of this Section 5.3.2(c), Incentive Stock Options shall be taken into account in the order in which they were granted. For purposes of this limitation, the Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted; and

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(d) In the event of a Participant’s change of status from Employee to Consultant or Nonemployee Director, an Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonqualified Stock Option three (3) months and one (1) day following such change of status.

5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a transaction described in Section 424(a) of the Code (e.g., the acquisition of property or stock from an unrelated corporation), persons who become Employees, Directors or Consultants on account of such transaction may be granted Options in substitution for options granted by their former employer, and such Options may be granted with an Exercise Price less than the Fair Market Value of a Share on the Grant Date; provided, however, the grant of such substitute Option shall not constitute a “modification” as defined in Code Section 424(h)(3) and the applicable Treasury regulations.

5.4 Exercise of Options. Options granted under the Plan shall be exercisable only with respect to the underlying shares that have become vested and shall be subject to restrictions as set forth in the Award Agreement as the Administrator shall determine in its discretion. Except as set forth in Section 9.1, in all cases involving termination of Continuous Status as an Employee, Director or Consultant (including, but not limited to, the reasons described in subsections (c), (d), (e) and (f) of Section 5.5.1), such Option shall be exercisable only to the extent the Participant was entitled to exercise it at the date of such termination.

5.5 Expiration of Options

5.5.1 Expiration Dates. Unless otherwise specified in the Award Agreement, but in any event no later than ten (10) years from the Grant Date, each Option shall terminate no later than the first to occur of the following events:

(a) Date in Award Agreement. The date for termination of the Option set forth in the written Award Agreement;

(b) Termination of Continuous Status as Employee, Director or Consultant. The last day of the three (3)-month period following the date the Participant ceases his/her/its Continuous Status as an Employee, Director or Consultant (other than termination for a reason described in subsections (c), (d), (e), or (f) below).

(c) Misconduct. In the event a Participant’s Continuous Status as an Employee, Director or Consultant terminates because the Participant has performed an act of Misconduct as determined by the Administrator, all unexercised Options held by such Participant shall expire five (5) business days following Participant’s receipt of written notice from the Company of Participant’s termination due to Misconduct; provided, however, that the Administrator may, in its sole discretion, prior to the expiration of the five (5) day period, reinstate the Options by giving written notice of such reinstatement to Participant. In the event of such reinstatement, the Participant may exercise the Option only to such extent, for such time, and upon such terms and conditions as if the Participant had ceased to be employed by or affiliated with the Company or a Subsidiary upon the date of such termination for a reason other than Misconduct, disability or death;

(d) Disability. In the event that a Participant’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option at any time within twelve (12) months from the date of such termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). If, at the date of termination, the Participant is not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan;

(e) Death. In the event of the death of a Participant, the Participant’s Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance. If, at the time of death, the Participant was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan. If, after death, the Participant’s estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan; or

(f) 10 Years from Grant. An Option shall expire no more than ten (10) years from the Grant Date; provided, however, that if an Incentive Stock Option is granted to an Employee who, together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code, owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or any of its Subsidiaries, such Incentive Stock Option may not be exercised after the expiration of five (5) years from the Grant Date.

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5.5.2 Administrator Discretion. Notwithstanding the foregoing the Administrator may, after an Option is granted, extend the exercise period that an Option is exercisable following a Participant’s termination of Continuous Service (recognizing in some such circumstances the Options would cease to be Incentive Stock Options); provided, however, in no event may any such extension extend beyond the stated expiration date of the Option.

5.6 No “Re-Pricing” Without Shareholder Approval. Except as provided in Section 4.3, in no event may the Administrator directly or indirectly reduce the exercise price of an Option after it has been granted without the approval of a majority of the shareholders eligible to vote.

5.7 Exercise and Payment. Options shall be exercised by the Participant’s delivery of a written notice of exercise to the Secretary of the Company (or its designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares and payment of any additional amount that the Administrator specifies is necessary for the Company to pay any required withholding taxes in accordance with Section 11.

5.7.1 Form of Consideration. Upon the exercise of any Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Administrator, in its discretion, also may permit the exercise of Options and same-day sale of related Shares, or exercise by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price, or by any other means which the Administrator, in its discretion, determines to provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. The Administrator, in its discretion, may also permit a “net issuance” of any Option, where the term “net issuance” means the issuance of a number of Shares (rounded down to the nearest whole number of Shares) that is equivalent in value to the difference between the fair market value of the underlying stock on the exercise date, less the exercise price and minimum tax withholding. Such discretion may be exercised by the Administrator either in the Award Agreement or at any other time.

5.7.2 Delivery of Shares. As soon as practicable after receipt of a written notification of exercise and full payment for the Shares purchased and taxes required to be withheld, the Company shall deliver to the Participant (or the Participant’s designated broker), Share certificates (which may be in book entry form) representing such Shares.

SECTION 6

STOCK APPRECIATION RIGHTS

6.1 Grant of SARs. Subject to the terms of the Plan, a SAR may be granted to Employees, Consultants and Nonemployee Directors at any time and from time to time as shall be determined by the Administrator.

6.1.1 Number of Shares. The Administrator shall have complete discretion to determine the number of SARs granted to any Participant.

6.1.2 Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, shall have discretion to determine the terms and conditions of SARs granted under the Plan, including whether upon exercise the SARs will be settled in Shares or cash, which must be determined at the time of grant and set forth in the Award Agreement. However, the Exercise Price of a SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date.

6.2 Exercise of SARs. SARs granted under the Plan shall be exercisable at such times and be subject to such restrictions as set forth in the Award Agreement and conditions as the Administrator shall determine in its discretion.

6.3 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the Exercise Price, the term of the SAR, the conditions of exercise and such other terms and conditions as the Administrator shall determine.

6.4 Expiration of SARs. A SAR granted under the Plan shall expire upon the date determined by the Administrator in its discretion as set forth in the Award Agreement, or otherwise pursuant to the provisions relating to the expiration of Options as set forth in Section 5.5.

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6.5 No “Re-Pricing” Without Shareholder Approval. Except as provided in Section 4.3, in no event may the Administrator directly or indirectly reduce the exercise price of a SAR after it has been granted without the approval of a majority of the shareholders eligible to vote.

6.6 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive (whichever is specified in the Award Agreement) from the Company either (a) a cash payment in an amount equal to (x) the difference between the Fair Market Value of a Share on the date of exercise and the SAR Exercise Price, multiplied by (y) the number of Shares with respect to which the SAR is exercised, or (b) a number of Shares by dividing such cash amount by the Fair Market Value of a Share on the exercise date. If the Administrator designates in the Award Agreement that the SAR will be settled in cash, upon Participant’s exercise of the SAR the Company shall make a cash payment to Participant as soon as reasonably practicable.

SECTION 7

STOCK AWARDS

7.1 Grant of Stock Awards. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Stock Awards to Employees, Nonemployee Directors and Consultants in such amounts as the Administrator, in its discretion, shall determine. The Administrator shall determine the number of Shares to be granted to each Participant and the purchase price (if any) to be paid by the Participant for such Shares.

7.2 Stock Agreement. Each Stock Award shall be evidenced by an Award Agreement that shall specify the terms of the grant, including the Period of Restriction that applies to such grant (if any), the conditions that must be satisfied for the Period of Restriction to lapse, and such other terms and conditions as the Administrator, in its discretion, shall determine. Unless the Administrator determines otherwise, Shares granted pursuant to Stock Awards shall be held by the Company as escrow agent until the Period of Restriction has lapsed.

7.3 Transferability. Shares granted pursuant to a Stock Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until expiration of the applicable Period of Restriction (if any).

7.4 Restrictions. In its sole and absolute discretion, the Administrator may set restrictions based on a Participant’s Continuous Status as Employee, Nonemployee Director or Consultant or the achievement of specific Performance Goals (Company-wide, business unit, or individual), or any other basis determined by the Administrator in its discretion.

7.5 Legend on Certificates. The Administrator, in its discretion, may place a legend or legends on the Share certificates to give appropriate notice of such restrictions in the case the Shares are not held by the Company in escrow.

7.6 Release of Shares. Shares granted pursuant to Stock Awards shall be released from escrow as soon as practicable after expiration of the Period of Restriction. At such time, the Participant shall be entitled to have any legend or legends under Section 7.5 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant, subject to Applicable Law.

7.7 Voting Rights. During any Period of Restriction, Participants holding Shares granted pursuant this Section 7 may exercise full voting rights with respect to those Shares, unless otherwise provided in the Award Agreement.

7.8 Dividends and Other Distributions. During any Period of Restriction, Participants holding Shares granted pursuant to this Section 7 shall be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions on transferability and forfeitability as the Shares with respect to which they were paid.

7.9 Return of Stock to Company. On the date that any forfeiture event set forth in the Award Agreement occurs, the Stock for which restrictions have not lapsed shall revert to the Company and again shall become available for grant under the Plan.

SECTION 8

RESTRICTED STOCK UNITS

8.1 Grant of Restricted Stock Units. Subject to the terms and conditions of the Plan, Restricted Stock Units may be granted to Employees, Consultants and Nonemployee Directors at any time and from time to time, as shall be determined by the Administrator in its discretion. However, the award of Restricted Stock Units under this Section 8 is subject to the “Full-Value Award Limitation,” as described in Section 2.20.

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8.1.1 Number of Units. The Administrator will have complete discretion in determining the number of Restricted Stock Units granted to any Participant, subject to the limitations in Sections 4.1.

8.1.2 Value of Restricted Stock Units. Each Performance Unit shall have a value equal to the Fair Market Value of one Share.

8.2 Performance Goals and Other Terms. The Administrator will set Performance Goals or other vesting provisions, including, without limitation, time-based vesting provisions, in its discretion which, depending on the extent to which they are met, will determine the number Restricted Stock Units that are converted into Shares or into the equivalent value of cash that shall be paid to Participants. The time period during which the Performance Goals or other vesting provisions must be met will be called the “Performance Period.” Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its discretion, will determine. The Administrator may set Performance Goals based upon the achievement of Company-wide or Individual Objectives or any other basis determined by the Administrator in its discretion.

8.3 Earning of Restricted Stock Units. After the applicable Performance Period has ended, the holder of Restricted Stock Units will be entitled to receive a payment based on the number of Restricted Stock Units earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding Performance Goals or other vesting provisions have been achieved.

8.4 Form and Timing of Payment of Restricted Stock Units. Each Award Agreement of Restricted Stock Units shall specify the form of payment, which may be in the form of Shares or in cash. Payment with respect to earned Restricted Stock Units shall be made as soon as reasonably practical (and in no event more than two and one-half months) after the expiration of the Performance Period.

8.5 Cancellation of Restricted Stock Units. On the date that any forfeiture event set forth in the Award Agreement occurs, all unearned or unvested Restricted Stock Units will revert to the Company, and again will be available for grant under the Plan. Such reverted Restricted Stock Units shall credit the Full-Value Award Limitation.

SECTION 9

MISCELLANEOUS

9.1 Change In Control. Unless otherwise provided in the Award Agreement, in the event of a Change in Control, unless an Award is assumed or substituted by the successor corporation, then (i) such Awards shall become fully exercisable during the ten (10) day period immediately prior to the Change in Control, whether or not otherwise then exercisable and (ii) all restrictions and conditions on any Award then outstanding shall lapse as of the date of the Change in Control. Unless an Award is assumed or substituted by the successor corporation, such Award shall terminate and shall no longer be exercisable immediately upon the Change in Control, Participant shall be provided written notification of whether Options granted under the Plan will be assumed, substituted or shall become fully exercisable no later than ten (10) days prior to the Change in Control date.

9.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. Notwithstanding anything to the contrary contained in this Plan or in any Award Agreement, the Participant shall have the right to exercise his or her Award for a period of not less than ten (10) days immediately prior to such dissolution or transaction as to all of the Shares covered thereby, including Shares as to which the Award would not otherwise be exercisable.

9.3 No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or an Affiliate to terminate any Participant’s employment or service at any time, with or without cause. Unless otherwise provided by written contract, employment or service with the Company or any of its Affiliates is on an at-will basis only. Additionally, the Plan shall not confer upon any Director any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way with any rights which such Director or the Company may have to terminate his or her directorship at any time.

9.4 Participation. No Employee, Consultant or Nonemployee Director shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award.

9.5 Limitations on Awards. No Participant shall be granted an Award or Awards in any Fiscal Year in which the combined number of Shares underlying such Award(s) exceeds four hundred thousand (400,000) Shares; provided, however, that such limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 4.3.

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9.6 Successors. All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or, otherwise, sale or disposition of all or substantially all of the business or assets of the Company.

9.7 Beneficiary Designations. If permitted by the Administrator, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid Award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a form and manner acceptable to the Administrator. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any unexercised vested Award may be exercised by the administrator or executor of the Participant’s estate.

9.8 Limited Transferability of Awards. No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. All rights with respect to an Award granted to a Participant shall be available during his or her lifetime only to the Participant. Notwithstanding the foregoing, the Participant may, in a manner specified by the Administrator, (a) transfer a Nonqualified Stock Option to a Participant’s spouse, former spouse or dependent pursuant to a court-approved domestic relations order which relates to the provision of child support, alimony payments or marital property rights and (b) transfer a Nonqualified Stock Option or Stock Awards by bona fide gift and not for any consideration to (i) a member or members of the Participant’s immediate family, (ii) a trust established for the exclusive benefit of the Participant and/or member(s) of the Participant’s immediate family, (iii) a partnership, limited liability company of other entity whose only partners or members are the Participant and/or member(s) of the Participant’s immediate family or (iv) a foundation in which the Participant an/or member(s) of the Participant’s immediate family control the management of the foundation’s assets.

9.9 Restrictions on Share Transferability. The Administrator may impose such restrictions on any Shares acquired pursuant to the exercise of an Award as it may deem advisable, including, but not limited to, restrictions related to applicable federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded or any blue sky or state securities laws.

9.10 Transfers Upon a Change in Control. In the sole and absolute discretion of the Administrator, an Award Agreement may provide that in the event of certain Change in Control events, which may include any or all of the Change in Control events described in Section 2.8, Shares obtained pursuant to this Plan shall be subject to certain rights and obligations, which include but are not limited to the following: (i) the obligation to vote all such Shares in favor of such Change in Control transaction, whether by vote at a meeting of the Company’s shareholders or by written consent of such shareholders; (ii) the obligation to sell or exchange all such Shares and all rights to acquire Shares, under this Plan pursuant to the terms and conditions of such Change in Control transaction; (iii) the right to transfer less than all but not all of such Shares pursuant to the terms and conditions of such Change in Control transaction, and (iv) the obligation to execute all documents and take any other action reasonably requested by the Company to facilitate the consummation of such Change in Control transaction.

9.11 Performance-Based Awards. Each agreement for the grant of Restricted Stock Units or other performance-based awards shall specify the number of Shares or Units underlying the Award, the Performance Period and the Performance Goals (each as defined below), and each agreement for the grant of any other award that the Administrator determines to make subject to a Performance Goal similarly shall specify the applicable number of shares of Common Stock, the period for measuring performance and the Performance Goal. As used herein, “Performance Goals” means performance goals specified in the agreement for a Performance Unit Award, or for any other Award which the Administrator determines to make subject to Performance Goals, upon which the vesting or settlement of such award is conditioned and “Performance Period” means the period of time specified in an agreement over which Restricted Stock Units, or another Award which the Administrator determines to make subject to a Performance Goal, are to be earned. Each agreement for a performance-based Award shall specify in respect of a Performance Goal the minimum level of performance below which no payment will be made, shall describe the method of determining the amount of any payment to be made if performance is at or above the minimum acceptable level, but falls short of full achievement of the Performance Goal, and shall specify the maximum percentage payout under the agreement.

9.11.1 Performance Goals for Covered Employees. The Performance Goals for Restricted Stock Units and any other performance-based award granted to a Covered Employee, if deemed appropriate by the Administrator, shall be objective and shall otherwise meet the requirements of Section 162(m)(4)(C) of the Code, and shall be based upon one or more of the following performance-based business criteria, either on a business unit or Company-specific basis or in comparison with peer group performance: revenue, operating income, operating cash flows, return on net assets, return on assets, return on equity, return on capital, asset turnover, total stockholder return, net income, pre-tax income, gross margin, profit margin, net income margin, cash flow, book value, earnings per share, earnings growth, EBIT, EBITDA. Achievement of any such Performance Goal shall be measured over a period of years not to exceed ten (10) as specified by the Administrator in the agreement for the performance-based

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Award. No business criterion other than those named above in this Section 9.11.1 may be used in establishing the Performance Goal for an award to a Covered Employee under this Section 9.11. For each such award relating to a Covered Employee, the Administrator shall establish the targeted level or levels of performance for each such business criterion. The Administrator may, in its discretion, reduce the amount of a payout otherwise to be made in connection with an award under this Section 9.11, but may not exercise discretion to increase such amount, and the Administrator may consider other performance criteria in exercising such discretion. All determinations by the Administrator as to the achievement of Performance Goals under this Section 9.11 shall be made in writing. The Administrator may not delegate any responsibility under this Section 9.11. As used herein, “Covered Employee” shall mean, with respect to any grant of an award, an executive of the Company or any Subsidiary who is a member of the executive compensation group under the Company’s compensation practices (not necessarily an executive officer) whom the Administrator deems may be or become a covered employee as defined in Section 162(m)(3) of the Code for any year that such award may result in remuneration over $1 million which would not be deductible under Section 162(m) of the Code but for the provisions of the Program and any other “qualified performance-based compensation” plan (as defined under Section 162(m) of the Code) of the Company; provided, however, that the Administrator may determine that a Plan Participant has ceased to be a Covered Employee prior to the settlement of any award.

9.11.2 Mandatory Deferral of Income. The Administrator, in its sole discretion, may require that one or more award agreements contain provisions which provide that, in the event Section 162(m) of the Code, or any successor provision relating to excessive employee remuneration, would operate to disallow a deduction by the Company with respect to all or part of any award under the Program, a Plan Participant’s receipt of the benefit relating to such award that would not be deductible by the Company shall be deferred until the next succeeding year or years in which the Plan Participant’s remuneration does not exceed the limit set forth in such provisions of the Code; provided, however, that such deferral does not violate Code Section 409A.

SECTION 10

AMENDMENT, SUSPENSION, AND TERMINATION

10.1 Amendment, Suspension, or Termination. Except as provided in Section 10.2, the Board, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan.

10.2 No Amendment without Shareholder Approval. The Company shall obtain shareholder approval of any material Plan amendment (including but not limited to any provision to reduce the exercise or purchase price of any outstanding Options or other Awards after the Grant Date (other than for adjustments made pursuant Section 4.3), or to cancel and re-grant Options or other rights at a lower exercise price), to the extent required to comply with the rules of the NASDAQ, the Exchange Act, Section 422 of the Code, or other Applicable Law.

10.3 Plan Effective Date and Duration of Awards . The Plan shall be effective as of the Plan Adoption Date subject to the shareholders of the Company approving the Plan by the required vote), subject to Sections 10.1 and 10.2 (regarding the Board’s right to amend or terminate the Plan), and shall remain in effect thereafter. If the shareholders of the Company do not approve the Plan by the required vote within twelve months of the Plan Adoption Date, all Awards granted under this Plan, and this Plan in its entirety, shall immediately terminate. However, without further shareholder approval, no Award may be granted under the Plan more than ten (10) years after the Plan Adoption Date.

SECTION 11

TAX WITHHOLDING

11.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof) or the release of Shares from escrow arrangements or removal of legends, the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

11.2 Withholding Arrangements. The Administrator, in its discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) electing to have the Company withhold otherwise deliverable Shares or (b) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum amount required to be withheld. The amount of the withholding requirement shall be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made; provided, however, in the case Shares are withheld by the Company to satisfy the tax withholding that would otherwise by issued to the Participant, the amount of such tax withholding shall be determined by applying the statutory minimum federal, state or local income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date taxes are required to be withheld.

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SECTION 12

LEGAL CONSTRUCTION

12.1 Liability of Company. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful grant or any Award or the issuance and sale of any Shares hereunder, shall relieve the Company, its officers, Directors and Employees of any liability in respect of the failure to grant such Award or to issue or sell such Shares as to which such requisite authority shall not have been obtained.

12.2 Grants Exceeding Allotted Shares. If the Shares covered by an Award exceed, as of the date of grant, the number of Shares, which may be issued under the Plan without additional shareholder approval, such Award shall be void with respect to such excess Shares, unless shareholder approval of an amendment sufficiently increasing the number of Shares subject to the Plan is timely obtained.

12.3 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

12.4 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

12.5 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

12.6 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of California.

12.7 Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan.

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Nathan Zommer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IXYS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2016

/s/ Nathan Zommer                                                      

Nathan Zommer

Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Uzi Sasson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of IXYS Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2016

/s/ Uzi Sasson                                                               

Uzi Sasson

President and

Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to 18 U.S.C. 1350, Nathan Zommer, the Chief Executive Officer of IXYS Corporation (the “Company”), and Uzi Sasson, the Chief Financial Officer of the Company, each hereby certifies that, to his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the periods covered by the Periodic Report and the results of operations of the Company for the periods covered by the Periodic Report.

Dated: August 2, 2016

/s/ Nathan Zommer

Nathan Zommer

Chief Executive Officer

/s/ Uzi Sasson

Uzi Sasson

Chief Financial Officer

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Document And Entity Information - shares	3 Months Ended
	Jun. 30, 2016	Jul. 26, 2016
Document Information [Line Items]
Entity Registrant Name	IXYS CORP /DE/
Entity Central Index Key	0000945699
Trading Symbol	IXYS
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		31,458,652
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Current assets:
Cash and cash equivalents	$ 151,393	$ 155,806
Restricted cash	272	277
Accounts receivable, net	41,063	38,440
Inventories	85,656	89,604
Prepaid expenses and other current assets	4,028	4,203
Total current assets	282,412	288,330
Property, plant and equipment, net	44,325	42,623
Intangible assets, net	6,590	7,607
Goodwill	42,313	42,355
Deferred income taxes	27,825	28,024
Other assets	14,171	13,762
Total assets	417,636	422,701
Current liabilities:
Current portion of loans payable	1,076	1,804
Accounts payable	12,272	11,416
Accrued expenses and other current liabilities	23,575	21,290
Total current liabilities	36,923	34,510
Long term loans, net of current portion	77,940	85,253
Pension liabilities	15,620	16,307
Other long term liabilities	7,197	7,336
Total liabilities	137,680	143,406
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $0.01 par value: Authorized: 5,000,000 shares; none issued and outstanding
Common stock, $0.01 par value: Authorized: 80,000,000 shares; 38,269,389 issued and 31,458,652 outstanding at June 30, 2016 and 38,214,158 issued and 31,375,524 outstanding at March 31, 2016	383	382
Additional paid-in capital	215,354	214,045
Treasury stock, at cost: 6,810,737 common shares at June 30, 2016 and 6,838,634 common shares at March 31, 2016	(61,592)	(61,845)
Retained earnings	148,727	146,979
Accumulated other comprehensive loss	(22,916)	(20,266)
Total stockholders' equity	279,956	279,295
Total liabilities and stockholders' equity	$ 417,636	$ 422,701

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Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Jun. 30, 2016	Mar. 31, 2016
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, shares issued (in shares)	38,269,389	38,214,158
Common stock, shares outstanding (in shares)	31,458,652	31,375,524
Treasury stock, shares (in shares)	6,810,737	6,838,634

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Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net revenues	$ 80,638	$ 82,047
Cost of goods sold	56,644	56,445
Gross profit	23,994	25,602
Operating expenses:
Research, development and engineering	7,910	7,683
Selling, general and administrative	10,038	10,636
Amortization of acquisition-related intangible assets	1,017	1,579
Total operating expenses	18,965	19,898
Operating income	5,029	5,704
Other income (expense):
Interest income	62	47
Interest expense	(635)	(314)
Other income (expense), net	815	(790)
Income before income tax provision	5,271	4,647
Provision for income tax	(2,252)	(1,662)
Net income	$ 3,019	$ 2,985
Net income per share:
Basic (in dollars per share)	$ 0.10	$ 0.09
Diluted (in dollars per share)	0.09	0.09
Cash dividends per common share (in dollars per share)	$ 0.04	$ 0.035
Weighted average shares used in per share calculation:
Basic (in shares)	31,401	31,746
Diluted (in shares)	32,001	32,733

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 3,019	$ 2,985
Foreign currency translation adjustments	(2,825)	2,692
Changes in market value of investments:
Changes in unrealized gains (losses), net of tax of $45 and $(78)	85	(117)
Reclassification adjustment for net losses (gains) realized in net income, net of tax of $61	90
Net change in market value of investments	175	(117)
Total comprehensive income (loss)	$ 369	$ 5,560

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Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) - USD ($)	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Taxes (benefits) on changes in unrealized gain (loss)	$ 45,000	$ (78,000)
Taxes on reclassification adjustment for sales of securities included in net income	$ 61,000	$ 0

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 3,019	$ 2,985
Adjustments to reconcile net income to net cash provided by operating activities, net of assets acquired and liabilities assumed:
Depreciation and amortization	2,832	3,784
Provision for receivable allowances	1,610	1,407
Net change in inventory provision	425	300
Stock-based compensation	855	739
Loss (gain) on investments	(169)	147
Foreign currency adjustments on intercompany amounts and other non-cash items	(111)	248
Changes in operating assets and liabilities, net of business acquired:
Accounts receivable	(4,652)	(630)
Inventories	2,083	611
Prepaid expenses and other current assets	130	(779)
Accounts payable	559	609
Accrued expenses and other liabilities	1,113	329
Pension liabilities	(198)	(301)
Net cash provided by operating activities	7,496	9,449
Cash flows from investing activities:
Change in restricted cash	5	(5)
Purchase of businesses, net of cash and cash equivalents acquired and installment payments		(14,571)
Purchases of plant and equipment	(3,477)	(3,696)
Net cash used in investing activities	(3,472)	(18,272)
Cash flows from financing activities:
Principal payments on capital lease obligations		(321)
Repayments of loans and notes payable	(7,970)	(449)
Proceeds from loans		3,317
Proceeds from employee equity plans	694	2,468
Net cash provided by (used in) financing activities	(7,276)	5,015
Effect of exchange rate fluctuations on cash and cash equivalents	(1,161)	860
Net decrease in cash and cash equivalents	(4,413)	(2,948)
Cash and cash equivalents at beginning of period	155,806	121,164
Cash and cash equivalents at end of period	$ 151,393	$ 118,216

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Note 1 - Unaudited Condensed Consolidated Financial Statements

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Basis of Accounting [Text Block]

1

. Unaudited Condensed Consolidated Financial Statements

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed consolidated

balance sheet as of March 31, 2016 has been derived from our audited consolidated

balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2016, or fiscal 2016, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year. Our fiscal years end March 31. References to any numerically identified year preceded by the word “fiscal” are references to the year ending on March 31 of such numerically identified year.

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Note 2 - Recent Accounting Pronouncements and Accounting Changes

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

2. Recent Accounting Pronouncements

and Accounting Changes

In May 2014, Financial Accounting Standards Board, or FASB, issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients, and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In March 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers relating to revenue recognition

 to clarify the implementation guidance on principal versus agent considerations and to address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of the new revenue recognition standard. We are currently evaluating the impact of these amendments on our financial statements.

In April 2016, FASB issued an amended guidance to clarify the following two aspects relating revenue recognition: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Before an entity can identify its performance obligation in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. The amendments include implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property or a right to access the entity’s intellectual property. The amendments are intended to improve the operability and understandability of the licensing implementation guidance. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

In May 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers which would affect the narrow aspects of Topic 606, including assessing the collectibility criterion and accounting for contracts that do not meet the criteria for identifying the contracts with a customer, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

      In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330,

Inventory

, for inventory that is measured using the methods other than last-in, first-out, or LIFO, and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for annual reporting periods beginning after December 15, 2016,

and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

     In January 2016, the FASB issued authoritative guidance that modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under Accounting Standards Codification, or ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our consolidated financial statements.

    In February 2016, FASB issued amended guidance for lease arrangements, which requires lessees to recognize the followings

for all leases with terms longer than 12 months: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The amendment is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

    In March 2016, FASB issued amended guidance to simplify the transition to the equity method of accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Additionally, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings at the point an investment qualifies for the equity method. The amended guidance is effective for financial statements issued for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. It should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

    In March, 2016, FASB issued amended guidance which simplifies several aspects of the accounting for

employee share-based payment awards, including

forfeitures, employer tax withholding on share-based compensation and excess tax benefits or deficiencies.

The amended guidance also clarifies the statement of cash flows presentation for share-based awards. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

     In June 2016, FASB issued amended guidance which replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect financial assets and net investment in leases that are not accounted for at fair value through net income. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

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Note 3 - Business Combinations

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Business Combination Disclosure [Text Block]

3. Business Combinations

 

RadioPulse, Inc.

     On May 1, 2015, we acquired RadioPulse, Inc., or RadioPulse, for a total consideration of $15.7 million. Based in South Korea, RadioPulse is a fabless semiconductor company that develops, manufactures and sells wireless network technology solutions based on the ZigBee

®

 protocol, which combines microcontrollers and radio frequency devices. RadioPulse’s solutions are designed to enable a broad range of power-sensitive applications in the industrial, medical, consumer, smart grid and Internet of Things, or IoT, markets. RadioPulse offers a complementary product portfolio to our product lines. The consideration included cash consideration paid at closing of $14.7 million and $1.0 million related to an adjustment to eliminate debt owed to us for funds advanced prior to closing. The acquisition also included potential earnout payments aggregating up to $6.0 million payable over three years based on certain financial thresholds related to net revenues, gross profit and net income in calendar years 2015, 2016 and 2017. Based on our valuation, the fair value of the liability for the earnout payment was estimated to be nil as of June 30, 2016 and March 31, 2016. In connection with the acquisition, we incurred and expensed $248,000 in legal and consulting costs and $249,000 in acquisition-related compensation costs during fiscal 2016.

     The following table summarizes the values of the assets acquired and liabilities assumed at the acquisition date (in thousands):

	Purchase Consideration Allocation
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		547
Identifiable intangible assets		2,867
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(1,926	)
Total identifiable net liabilities		771
Goodwill		14,887
Total purchase consideration	$	15,658

     Identifiable intangible assets consisted of developed intellectual property, in-process research and development expenses, customer relationships, and contract backlog. The value reflected in the table represents the purchase price allocation. The valuation of the acquired intangibles was classified as a level 3 measurement under the fair value measurement guidance because the valuation was based on significant unobservable inputs and involved management judgment and assumptions about market participants and pricing. We did not recognize any liability with respect to the contingent consideration based upon our analysis.

Identified intangible assets resulting from the RadioPulse acquisition consisted of the following (in thousands):

				Estimated
	Fair Value		Amortization	Useful Life
	(In thousands)		Method	(In months)
	(unaudited)
Developed intellectual property	$	1,005	Accelerated		60
In-process research and development expenses (1)		1,188	Straight-line		60
Customer relationships		500	Accelerated		36
Contract backlog		174	Straight-line		6
Total	$	2,867

(1) Amortization starts after the completion of the research and development activities of the related projects.

     In determining the fair value of the acquired intangible assets, we determined the appropriate unit of measure, the exit market and the highest and best use for the assets. The income approach was used to estimate the fair value. The income approach indicates the fair value of an asset based on the value of the cash flows that the asset can be expected to generate in the future through a discounted cash flow method. The income approach was used to determine the fair values of developed intellectual property, in-process research and development expenses, contract backlog and customer relationships. The goodwill arising from the acquisition was largely attributable to the synergies expected to be realized after our acquisition and integration of RadioPulse and to the workforce acquired in the transaction. The goodwill is not deductible for tax purposes.

     The results of operations and financial position of RadioPulse were immaterial compared to our financial statements and therefore pro-forma financial statements have not been separately presented.

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Note 4 - Fair Value

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

4. Fair Value

We account for certain assets and liabilities at fair value. In determining fair value, we consider its principal or most advantageous market and the assumptions that market participants would use when pricing, such as inherent risk, restrictions on sale and risk of non-performance. The fair value hierarchy is based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy:

Level 1	—	Quoted prices for identical instruments in active markets.
Level 2	—	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
Level 3	—	Model-derived valuations in which one or more significant inputs or significant value drivers are unobservable.

Fair Value Measurements on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis, excluding accrued interest components, consisted of the following types of instruments as of June 30, 2016 and March 31, 2016 (in thousands):

	June 30, 2016 (1)						March 31, 2016 (1)
			Fair Value Measured at						Fair Value Measured at
			Reporting Date Using						Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	89,440	$	89,440	$	-	$	115,974	$	115,974	$	-
Marketable equity securities (3)		1,879		1,879		-		1,749		1,749		-
Auction rate preferred securities (3)		350		-		350		350		-		350
Total Assets Measured at Fair Value	$	91,669	$	91,319	$	350	$	118,073	$	117,723	$	350

(1)	We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.
(2)	Included in "Cash and cash equivalents" on our unaudited condensed consolidated balance sheets.
(3)	Included in "Other assets" on our unaudited condensed consolidated balance sheets.

We measure our marketable securities and derivative contracts at fair value. Marketable securities are valued using the quoted market prices and are therefore classified as Level 1 estimates. We review any impairment to determine whether it is other than temporarily impaired. This review is based on factors such as length of time of impairment, extent to which the fair value is below the cost basis, financial conditions of the issuer of the security, our expectations of future recoveries and our ability and intent to hold or sell the securities. Based on our review, we recognized an other than temporary impairment loss of $151,000 and $0 in marketable equity securities during the three months ended June 30, 2016 and June 30, 2015 respectively.

From time to time, we use derivative instruments to manage exposure to changes in interest rates and currency exchange rates. The fair values of these instruments are recorded on the balance sheets. The changes in the fair value of these instruments are recorded in the current period’s statement of operations and are included in other income (expense), net. All of our derivative instruments are traded on over-the-counter markets where quoted market prices are not readily available. For those derivatives, we measure fair value using prices obtained from the counterparties with whom we have traded. The counterparties price the derivatives based on models that use primarily market observable inputs, such as yield curves and option volatilities. Accordingly, we classify these derivatives as Level 2. We held no derivative instruments at June 30, 2016 and March 31, 2016.

Auction rate preferred securities, or ARPS, are stated at par value based upon observable inputs including historical redemptions received from the ARPS issuers. Our ARPS have credit ratings of A

+

,

are 100% collateralized and continue to pay interest in accordance with their contractual terms. Additionally, the collateralized asset value ranges exceed the value of our ARPS by approximately 200 percent. Accordingly, the remaining ARPS balance was categorized as Level 2 for fair value measurement in accordance with the authoritative guidance provided by FASB and was recorded at full par value on the unaudited condensed consolidated balance sheets as of June 30, 2016 and March 31, 2016. We currently believe that the ARPS values are not impaired and as such, no impairment has been recognized against the investment. If future auctions fail to materialize and the credit rating of the issuers deteriorates, we may be required to record an impairment charge against the value of our ARPS.

Cash and cash equivalents are recognized and measured at amounts that approximate fair value in our unaudited condensed consolidated financial statements. Accounts receivable and prepaid expenses and other current assets are financial assets with carrying values that approximate fair value. Accounts payable and accrued expenses and other current liabilities are financial liabilities with carrying values that approximate fair value.

Our debt, which primarily consists of loans from banks, approximated fair value as the interest rates either adjusted according to the market rates or the interest rates approximated the market rates. The estimated fair value of our debt was approximately $79.0 million and $87.1 million as of June 30, 2016 and March 31, 2016, respectively. Our debt is categorized as Level 2 for fair value measurement. Our pension liabilities, net of plan assets approximated fair value. See Note 10, “Pension Plans” for a discussion of pension liabilities.

The fair value of contingent consideration for a business acquisition is classified as Level 3 estimate. See Note 3, “Business Combinations” for a discussion of fair value of contingent consideration.

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Note 5 - Accounts Receivable

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5. Accounts Receivable

Accounts receivable consist of the following (in thousands):

	June 30,			March 31,
	2016			2016
	(unaudited)
Accounts receivable, gross	$	43,751		$	41,219
Allowances		(2,688	)		(2,779	)
Accounts receivable, net	$	41,063		$	38,440

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Note 6 - Other Assets

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Other Assets Disclosure [Text Block]

6. Other Assets

Other assets consist of the following (in thousands):

	June 30,		March 31,
	2016		2016
	(unaudited)
Marketable equity securities	$	1,879	$	1,749
Auction rate preferred securities		350		350
Long-term equity method investments		11,250		10,977
Other items		692		686
Total	$	14,171	$	13,762

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Note 7 - Inventories

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

7. Inventories

Inventories consist of the following (in thousands):

	June 30,		March 31,
	2016		2016
	(unaudited)
Raw materials	$	18,252	$	18,269
Work in process		40,285		41,549
Finished goods		27,119		29,786
Total	$	85,656	$	89,604

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Note 8 - Accrued Expenses and Other Current Liabilities

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Accrued Expenses and Other Current Liabilities Disclosure [Text Block]

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

	June 30,		March 31,
	2016		2016
	(unaudited)
Uninvoiced goods and services	$	11,152	$	8,824
Compensation and benefits		7,204		7,540
Income taxes		2,690		2,066
Commissions, royalties and other		2,529		2,860
Total	$	23,575	$	21,290

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Note 9 - Borrowing Arrangements

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

9.

Borrowing Arrangements

Revolving Credit Agreement

On November 20, 2015, we entered into a Revolving Credit Agreement with a syndicate of banks for a line of credit of $125.0 million. The agent for the banks is Bank of the West, or BOTW. The obligations are guaranteed by four of our subsidiaries. The loan is collateralized pursuant to a Contingent Collateral Agreement, under which the assets of the parent company and the four subsidiaries could be subject to security interest for the benefit of the banks in the event of a loan default. The Revolving Credit Agreement expires on November 20, 2017.

The credit agreement provides different interest rate alternatives under which we may borrow funds. We may elect to borrow based on LIBOR plus a margin or an alternative base rate plus a margin. The margin can range from 0.75% to 2.5%, depending on interest rate alternatives and on our leverage of liabilities to effective tangible net worth. The applicable interest rate as of June 30, 2016 was 2.56%. An unused commitment fee is also payable. It ranges from 0.25% to 0.625%, depending on leverage. In relation to the execution of the credit agreement, we incurred loan costs that were deferred and reduced our “Long term loans, net of current portion” on our unaudited consolidated balance sheets. Those costs are being amortized over the two-year life of the credit agreement. The unamortized balance at June 30, 2016 and March 31, 2016 was $257,000 and $304,000, respectively.

The terms of the facility impose restrictions on the company’s ability to undertake certain transactions, to create liens on assets and to incur subsidiary indebtedness. In addition, the credit agreement is subject to a set of financial covenants, including minimum effective tangible net worth, the ratio of cash, cash equivalents and accounts receivable to current liabilities, profitability, a leverage ratio and a minimum amount of U.S. domestic cash on hand. At June 30, 2016, we complied with all of these financial covenants.

At June 30, 2016 and March 31, 2016, the outstanding principal balances under the credit agreement were $73.0 million and $80.0 million, respectively.

The credit agreement also includes a $10.0 million letter of credit subfacility. See Note 16, “Commitments and Contingencies” for further information regarding the terms of the subfacility.

IKB Deutsche Industriebank

In April 2015, we entered into a loan with IKB Deutsche Industriebank, or IKB. Under the agreement, we borrowed €6.5 million, or about $7.2 million at the time. The loan has a term ending March 31, 2022 and bears a fixed annual interest rate of 1.75%. Each fiscal quarter a principal payment of €232,000, or about $258,000, and a payment of accrued interest are required. Financial covenants for a ratio of indebtedness to cash flow, a ratio of equity to total assets and a minimum stockholders’ equity for the German subsidiary must be satisfied for the loan to remain in good standing. Compliance with these covenants is required annually at March 31. We complied with all of these financial covenants at March 31, 2016. The loan may be prepaid in whole or in part with a modest penalty. The loan is also collateralized by a security interest in the facility in Lampertheim, Germany. At June 30, 2016, the outstanding principal balance was €5.3 million, or about $5.9 million. At March 31, 2016, the outstanding principal balance was €5.6 million, or about $6.3 million

.

Loans Assumed from Business Acquisitions

Our outstanding balances relating to loans assumed upon business acquisitions at June 30, 2016 and March 31, 2016 were $344,000 and $1.1 million, respectively. These loans consisted of certain short-term facilities from financial institutions and loans from government agencies to support the research and development activities.

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Note 10 - Pension Plans

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

10. Pension Plans

We maintain three defined benefit pension plans: one for United Kingdom employees, one for German employees, and one for Philippine employees. We deposit funds for the United Kingdom and Philippine plans with financial institutions and make payments to former German employees directly. We accrue for the unfunded portion of the obligations. The measurement date for projected benefit obligations and plan assets is March 31. As of June 30, 2016, the German defined benefit plan was completely unfunded and we accrued for its obligations. The United Kingdom and German plans have been curtailed. As such, the plans are closed to new entrants and no credit is provided for additional periods of service. We expect to contribute approximately $1.1 million to the United Kingdom and the Philippines plans in the fiscal year ending March 31, 2017.

The net periodic pension expense includes the following components (in thousands):

	Three Months Ended
	June 30,
	2016			2015
	(unaudited)
Service cost	$	28		$	26
Interest cost on projected benefit obligation		352			368
Expected return on plan assets		(323	)		(438	)
Recognized actuarial loss		48			45
Net periodic pension expense	$	105		$	1

Information on Plan Assets

We report and measure the plan assets of our defined benefit pension plans at fair value. The table below sets forth the fair value of our plan assets as of June 30, 2016 and March 31, 2016, using the same three-level hierarchy of fair-value inputs described in Note 4, “Fair Value” (in thousands):

	June 30, 2016						March 31, 2016
Description	Level 1		Level 2		Total		Level 1		Level 2		Total
	(unaudited)						(unaudited)
Cash and cash funds	$	17	$	-	$	17	$	121	$	-	$	121
Equity		398		-		398		351		-		351
Fixed interest		1,326		94		1,420		1,225		96		1,321
Mutual funds		13,156		13,203		26,359		13,527		13,394		26,921
Total	$	14,897	$	13,297	$	28,194	$	15,224	$	13,490	$	28,714

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Note 11 - Employee Equity Incentive Plans

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11. Employee Equity Incentive Plans

Stock Purchase and Stock Option Plans

The 2009 Equity Incentive Plan, the 2011 Equity Incentive Plan and the 2013 Equity Incentive Plan

On September 10, 2009, our stockholders approved the 2009 Equity Incentive Plan, or the 2009 Plan, under which 900,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On September 16, 2011, our stockholders approved the 2011 Equity Incentive Plan, or the 2011 Plan, under which 600,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. On August 30, 2013, our stockholders approved the 2013 Equity Incentive Plan, or the 2013 Plan, under which 2,000,000 shares of our common stock are reserved for the grant of stock options and other equity incentives. The 2009 Plan, the 2011 Plan and the 2013 Plan are referred to as the Plans.

Stock Options

Under the Plans, nonqualified and incentive stock options may be granted to employees, consultants and non-employee directors. Generally, the per share exercise price shall not be less than 100% of the fair market value of a share on the grant date. The Board of Directors has the full power to determine the provisions of each option issued under the Plans. While we may grant options that become exercisable at different times or within different periods, we have primarily granted options that vest over four years. The options, once granted, expire ten years from the date of grant.

Stock Awards

Stock awards, denominated restricted stock under the 2009 Plan and the 2011 Plan, may be granted to any employee, director or consultant under the Plans. Pursuant to a stock award, we will issue shares of common stock. Shares that are subject to the restriction will be released from restriction if certain requirements, including continued performance of services, are met.

Stock Appreciation Rights

Awards of stock appreciation rights, or SARs, may be granted to employees, consultants and non-employee directors pursuant to the Plans. A SAR is payable on the difference between the market price at the time of exercise and the exercise price at the date of grant. In any event, the exercise price of a SAR shall not be less than 100% of the fair market value of a share on the grant date and shall expire no later than ten years from the grant date. Upon exercise, the holder of a SAR shall be entitled to receive payment either in cash or a number of shares by dividing such cash amount by the fair market value of a share on the exercise date.

Restricted Stock Units

Restricted stock units, denominated performance units in the 2009 Plan, may be granted to employees, consultants and non-employee directors under the Plan. Each restricted stock unit shall have a value equal to the fair market value of one share. After the applicable performance period has ended, the holder will be entitled to receive a payment, either in cash or in the form of shares, based on the number of restricted stock units earned over the performance period, to be determined as a function of the extent to which the corresponding performance goals or other vesting provisions have been achieved.

The 2016 Equity Incentive Plan

On June 9, 2016, the Board of Directors approved the adoption of the 2016 Equity Incentive Plan, or the 2016 Plan, under which 2,000,000 shares of the common stock will be reserved for the grant of stock options and other equity incentives. As of June 30, 2016, the 2016 Plan is subject to our stockholders' approval.

Employee Stock Purchase Plan

The Board of Directors has approved the Amended and Restated 1999 Employee Stock Purchase Plan, or the Purchase Plan, and reserved a total of 1,550,000 shares of common stock for issuance under the Purchase Plan. Under the Purchase Plan, all eligible employees may purchase our common stock at a price equal to 85% of the lower of the fair market value at the beginning of the offer period or the semi-annual purchase date. Stock purchases are limited to 15% of an employee’s eligible compensation. During the three months ended June 30, 2016, there were 55,231 shares purchased under the Purchase Plan, leaving approximately 185,010 shares available for purchase under the Purchase Plan in the future.

Stock-Based Compensation

The following table summarizes the effects of stock-based compensation charges (in thousands):

	Three Months Ended June 30,
Statement of Operations Classifications	2016		2015
	(unaudited)
Cost of goods sold	$	100	$	122
Research, development and engineering (1)		303		460
Selling, general and administrative expenses		452		406
Stock-based compensation effect in income before taxes		855		988
Provision for income taxes (2)		342		346
Net stock-based compensation effects in net income	$	513	$	642

(1) Includes acquisition related compensation expenses of $249,000 during the quarter ended June 30, 2015.

(2) Calculated at the U.S. statutory income tax rate of 40% in fiscal 2017 and 35% in fiscal 2016.

During the three months ended June 30, 2016, the unaudited condensed consolidated statements of operations and cash flows do not reflect any tax benefit for the tax deduction from option exercises and other awards. As of June 30, 2016, approximately $6.8 million in stock-based compensation is to be recognized for unvested stock options granted under our equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.8 years.

The Black-Scholes option pricing model is used to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our stock purchase plan. The weighted average estimated fair values of employee stock option grants and rights granted under the Purchase Plan, as well as the weighted average assumptions that were used in calculating such values during the three months ended June 30, 2016 and 2015, were based on estimates at the date of grant as follows:

	Stock Options						Purchase Plan
	Three Months Ended June 30,						Three Months Ended June 30,
	2016			2015			2016			2015
	(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	3.96		$	6.32		$	3.94		$	3.15
Risk-free interest rate		1.4	%		2.0	%		0.26	%		0.1	%
Expected term in years		6.41			6.75			1.00			1.00
Volatility		41.0	%		50.7	%		42.9	%		33.7	%
Dividend yield		1.41	%		1.01	%		1.42	%		1.11	%

Activity with respect to outstanding stock options for the three months ended June 30, 2016 was as follows:

				Weighted Average
	Number of			Exercise Price		Intrinsic Value
	Shares			Per Share		(000) (1)
				(unaudited)
Balance at March 31, 2016		5,234,397		$	10.40
Options granted		222,000		$	10.97
Options exercised		(27,897	)	$	6.53	$	130
Options expired		(5,000	)	$	9.73
Balance at June 30, 2016		5,423,500		$	10.44
Exercisable at June 30, 2016		3,684,916		$	10.03
Exercisable at March 31, 2016		3,619,563		$	9.93

(1) Represents the difference between the exercise price and the value of our common stock at the time of exercise.

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Note 12 - Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Comprehensive Income (Loss) Note [Text Block]

12. Accumulated Other

Comprehensive Income (Loss)

     The components and the changes in accumulated other comprehensive income (loss), net of tax, for the three months ended June 30, 2016 and 2015 were as follows (in thousands):

	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2016	$	(10,639	)	$	(82	)	$	(9,545	)	$	(20,266	)
Other comprehensive income (loss) before reclassifications		(2,825	)		85			-			(2,740	)
Net loss reclassified from accumulated other comprehensive income (loss)		-			90			-			90
Net current period other comprehensive income (loss)		(2,825	)		175			-			(2,650	)
Balance as of June 30, 2016	$	(13,464	)	$	93		$	(9,545	)	$	(22,916	)

	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		2,692			(117	)		-			2,575
Net current period other comprehensive income (loss)		2,692			(117	)		-			2,575
Balance as of June 30, 2015	$	(10,885	)	$	(110	)	$	(9,518	)	$	(20,513	)

     The amounts reclassified out of accumulated other comprehensive income (loss) for the three months ended June 30, 2016 and 2015 are as follows (in thousands):

Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)					Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended June 30,
	2016			2015
	(unaudited)
Impairment of marketable securities		(151	)		-	Other income (expense), net
Subtotal		(151	)		-	Income before income tax provision
Tax impact		61			-	Provision for income tax
Total reclassifications for the period	$	(90	)	$	-	Net income

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Note 13 - Computation of Earnings Per Share

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

13. Computation of Earnings per Share

Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):

	Three Months Ended
	June 30,
	2016		2015
	(unaudited)
Net income	$	3,019	$	2,985
Weighted average shares - basic		31,401		31,746
Weighted average shares - diluted		32,001		32,733
Net income per share - basic	$	0.10	$	0.09
Net income per share - diluted	$	0.09	$	0.09

Diluted weighted average shares included approximately 600,000 and 987,000 common equivalent shares from stock options for the three months ended June 30, 2016 and 2015.

Basic net income available per common share is computed using net income and the weighted average number of common shares outstanding

during the period. Diluted net income per common share is computed using net income and the weighted average number of common shares outstanding, assuming dilution, which includes potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the assumed exercise of stock options using the treasury stock method. During the three months ended June 30, 2016 and 2015, there were outstanding options to purchase 2,889,670 and 868,702 shares, respectively, that were not included in the computation of diluted net income per share since the exercise prices of the options exceeded the market price of the common stock and thus their inclusion would be anti-dilutive. These options could dilute earnings per share in future periods if the market price of the common stock increases.

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Note 14 - Segment and Geographic Information

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

14. Segment and Geographic Information

We have a single operating segment and reportable segment. We design develop, manufacture and market high performance semiconductor products. Our Chief Executive Officer and our President, together, have been identified as the chief operating decision makers. Our chief operating decision makers review financial information presented as one operating segment for the purpose of making decisions, allocating resources and assessing financial performance.

Our net revenues by major geographic area (based on destination) were as follows (in thousands):

	Three Months Ended June 30,
	2016		2015
	(unaudited)
United States	$	19,501	$	20,133
Europe and the Middle East
France		3,450		2,040
Germany		8,599		8,077
Italy		1,076		1,264
Netherlands		1,140		695
United Kingdom		3,627		3,220
Other		5,953		6,697
Asia Pacific
China		22,640		21,235
Japan		1,718		3,322
Korea		4,695		6,136
Malaysia		804		1,242
Singapore		3,007		3,117
Thailand		811		1,043
Other		1,747		1,484
Rest of the World
India		900		1,132
Other		970		1,210
Total	$	80,638	$	82,047

The following table sets forth net revenues for each of our product groups for the three months ended June 30, 2016 and 2015 (in thousands):

	Three Months Ended June 30,
	2016		2015
	(unaudited)
Power semiconductors	$	56,479	$	54,978
Integrated circuits		20,382		22,484
Systems and RF power semiconductors		3,777		4,585
Total	$	80,638	$	82,047

For the three months ended June 30, 2016 and 2015, one distributor accounted for 13.8% and 10.7% of our net revenues in each period, respectively. For the three months ended June 30, 2016, another distributor accounted for 10.6% of our net revenues.

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Note 15 - Income Taxes

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

15. Income Taxes

For the three months ended June 30, 2016 and 2015, we recorded income tax provisions of $2.3 million and $1.7 million, reflecting effective tax rates of 42.7% and 35.8%, respectively. Our effective tax rates for the quarters ended June 30, 2016 and 2015 were affected by non-benefitted losses incurred in certain tax jurisdictions. For both periods, the effective tax rates reflected estimates of annual income in domestic and foreign jurisdictions, as adjusted by certain tax items.

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Note 16 - Commitments and Contingencies

3 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

16. Commitments and Contingencies

Revolving Credit Agreement

On November 20, 2015, we entered into Revolving Credit Agreement with a syndicate of banks whose agent is BOTW for a line of credit of $125.0 million. All amounts owed under the credit agreement are due and payable on November 20, 2017. Borrowings may be repaid and re-borrowed at any time during the term of the credit agreement. The obligations are guaranteed by four of our subsidiaries. The loan is collateralized pursuant to a Contingent Collateral Agreement under which the assets of the parent company and the four subsidiaries could be subject to security interests for the benefit of the banks in the event of a loan default. The credit agreement includes a letter of credit subfacility, under which BOTW agrees to issue letters of credit of up to $10.0 million. However, borrowing under this subfacility is limited to the extent of availability under the $125.0 million revolving line of credit. During the first quarter ended June 30, 2016, we made a principal repayment of $7.0 million. At June 30, 2016, the outstanding principal under the credit agreement was $73.0 million. See Note 9, “Borrowing Arrangements” for further information regarding the terms of the credit agreement.

Other Commitments and Contingencies

On occasion, we provide limited indemnification to customers against intellectual property infringement claims related to our products. To date, we have not experienced significant activity or claims related to such indemnifications. We also provide in the normal course of business indemnification to our officers, directors and selected parties. We are unable to estimate any potential future liability, if any. Therefore, no liability for these indemnification agreements has been recorded as of June 30, 2016 and March 31, 2016.

On July 1, 2016, in connection with an income tax audit of our subsidiary in the Philippines for fiscal year ended March 31, 2010, we received a notice from the Philippine Bureau of Internal Revenue, or BIR, that they upheld an initial assessment for a deficiency of income taxes, inclusive of interest and penalties, of approximately $2.5 million. In accordance with our rights, we have filed an appeal before the Philippine Court of Tax Appeals, or CTA. While there are no assurances that we will prevail, we believe that we have a valid legal reason to challenge the BIR’s decision and that our appeal before the CTA will merit a favorable resolution. Accordingly, we have not accrued any amount for this matter.

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Significant Accounting Policies (Policies)

3 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The unaudited condensed consolidated financial statements include the accounts of IXYS Corporation and its wholly-owned subsidiaries. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The accounting estimates that require management’s most difficult judgments include, but are not limited to, revenue reserves, inventory valuation, accounting for income taxes, and allocation of purchase price in business combinations. All significant intercompany transactions have been eliminated in consolidation. All adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair statement of the results for the interim periods have been made. The condensed consolidated

balance sheet as of March 31, 2016 has been derived from our audited consolidated

balance sheet as of that date. It is recommended that the interim financial statements be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended March 31, 2016, or fiscal 2016, contained in our Annual Report on Form 10-K. Interim results are not necessarily indicative of the operating results expected for later quarters or the full fiscal year. Our fiscal years end March 31. References to any numerically identified year preceded by the word “fiscal” are references to the year ending on March 31 of such numerically identified year.

New Accounting Pronouncements, Policy [Policy Text Block]

In May 2014, Financial Accounting Standards Board, or FASB, issued a new standard on the recognition of revenue from contracts with customers, which includes a single set of rules and criteria for revenue recognition to be used across all industries. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled. To accomplish this objective, the standard requires five basic steps: identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when or as the entity satisfies a performance obligation. This standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods during the annual period. Early adoption is prohibited for annual periods commencing before December 15, 2016. Different transition methods are available — full retrospective method, retrospective with certain practical expedients, and a modified retrospective (cumulative effect) approach. We are currently evaluating the impact of the adoption of the standard on our consolidated financial statements including selection of the transition method.

In March 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers relating to revenue recognition

 to clarify the implementation guidance on principal versus agent considerations and to address how an entity should assess whether it is the principal or the agent in contracts that include three or more parties. The effective date and transition requirements for these amendments are the same as the effective date and transition requirements of the new revenue recognition standard. We are currently evaluating the impact of these amendments on our financial statements.

In April 2016, FASB issued an amended guidance to clarify the following two aspects relating revenue recognition: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Before an entity can identify its performance obligation in a contract with a customer, the entity first identifies the promised goods or services in the contract. The amendments are expected to reduce the cost and complexity of applying the guidance on identifying promised goods or services. The amendments include implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property or a right to access the entity’s intellectual property. The amendments are intended to improve the operability and understandability of the licensing implementation guidance. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

In May 2016, FASB issued an amended guidance on the topic of revenue from contracts with customers which would affect the narrow aspects of Topic 606, including assessing the collectibility criterion and accounting for contracts that do not meet the criteria for identifying the contracts with a customer, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. The effective date and transition requirements for the amendments are the same as the effective date and transition requirements relating to the new revenue recognition standard. We are currently evaluating the impact of these amendments and the transition alternatives on our consolidated financial statements.

      In July 2015, FASB issued an amendment to modify the inventory measurement guidance in Topic 330,

Inventory

, for inventory that is measured using the methods other than last-in, first-out, or LIFO, and the retail inventory method. It requires that an entity measure inventory within the scope of this update at the lower of cost and net realizable value. It eliminated the guidance in Topic 330 that required a reporting entity measuring inventory at the lower of cost or market to consider the replacement cost of inventory and the net realizable value of inventory less an approximately normal profit margin along with net realizable value in determining the market value. The guidance will be effective for annual reporting periods beginning after December 15, 2016,

and interim periods during the annual period. The new standard is required to be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect this change to have a significant impact on our consolidated financial statements.

     In January 2016, the FASB issued authoritative guidance that modifies how entities measure equity investments and present changes in the fair value of financial liabilities. Under the new guidance, entities will have to measure equity investments that do not result in consolidation and are not accounted under the equity method at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicality exception. A practicality exception will apply to those equity investments that do not have a readily determinable fair value and do not qualify for the practical expedient to estimate fair value under Accounting Standards Codification, or ASC 820, Fair Value Measurements, and as such these investments may be measured at cost. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We are currently evaluating the impact of this standard on our consolidated financial statements.

    In February 2016, FASB issued amended guidance for lease arrangements, which requires lessees to recognize the followings

for all leases with terms longer than 12 months: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The amendment is effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

    In March 2016, FASB issued amended guidance to simplify the transition to the equity method of accounting. This standard eliminates the requirement that when an existing cost method investment qualifies for use of the equity method, an investor must restate its historical financial statements, as if the equity method had been used during all previous periods. Additionally, any unrealized gain or loss in accumulated other comprehensive income (loss) will be recognized through earnings at the point an investment qualifies for the equity method. The amended guidance is effective for financial statements issued for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. It should be applied prospectively. Early adoption is permitted. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

    In March, 2016, FASB issued amended guidance which simplifies several aspects of the accounting for

employee share-based payment awards, including

forfeitures, employer tax withholding on share-based compensation and excess tax benefits or deficiencies.

The amended guidance also clarifies the statement of cash flows presentation for share-based awards. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance.

We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

     In June 2016, FASB issued amended guidance which replaces the incurred loss impairment methodology in the current guidance with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect financial assets and net investment in leases that are not accounted for at fair value through net income. The new guidance is effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of this amended guidance on our consolidated financial statements.

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Note 3 - Business Combinations (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	Purchase Consideration Allocation
Cash, restricted cash and cash equivalents	$	196
Accounts receivable		1,497
Inventories		534
Property, plant and equipment		24
Prepaid expenses and other current assets		547
Identifiable intangible assets		2,867
Short-term borrowings		(2,354	)
Accounts payable		(614	)
Accruals and other liabilities		(1,926	)
Total identifiable net liabilities		771
Goodwill		14,887
Total purchase consideration	$	15,658

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

				Estimated
	Fair Value		Amortization	Useful Life
	(In thousands)		Method	(In months)
	(unaudited)
Developed intellectual property	$	1,005	Accelerated		60
In-process research and development expenses (1)		1,188	Straight-line		60
Customer relationships		500	Accelerated		36
Contract backlog		174	Straight-line		6
Total	$	2,867

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Note 4 - Fair Value (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	June 30, 2016 (1)						March 31, 2016 (1)
			Fair Value Measured at						Fair Value Measured at
			Reporting Date Using						Reporting Date Using
Description	Total		Level 1		Level 2		Total		Level 1		Level 2
	(unaudited)						(unaudited)
Assets
Money market funds (2)	$	89,440	$	89,440	$	-	$	115,974	$	115,974	$	-
Marketable equity securities (3)		1,879		1,879		-		1,749		1,749		-
Auction rate preferred securities (3)		350		-		350		350		-		350
Total Assets Measured at Fair Value	$	91,669	$	91,319	$	350	$	118,073	$	117,723	$	350

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Note 5 - Accounts Receivable (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	June 30,			March 31,
	2016			2016
	(unaudited)
Accounts receivable, gross	$	43,751		$	41,219
Allowances		(2,688	)		(2,779	)
Accounts receivable, net	$	41,063		$	38,440

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Note 6 - Other Assets (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Other Assets, Noncurrent [Table Text Block]

	June 30,		March 31,
	2016		2016
	(unaudited)
Marketable equity securities	$	1,879	$	1,749
Auction rate preferred securities		350		350
Long-term equity method investments		11,250		10,977
Other items		692		686
Total	$	14,171	$	13,762

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Note 7 - Inventories (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30,		March 31,
	2016		2016
	(unaudited)
Raw materials	$	18,252	$	18,269
Work in process		40,285		41,549
Finished goods		27,119		29,786
Total	$	85,656	$	89,604

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Note 8 - Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Accrued Expenses and Other Current Liabilities [Table Text Block]

	June 30,		March 31,
	2016		2016
	(unaudited)
Uninvoiced goods and services	$	11,152	$	8,824
Compensation and benefits		7,204		7,540
Income taxes		2,690		2,066
Commissions, royalties and other		2,529		2,860
Total	$	23,575	$	21,290

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Note 10 - Pension Plans (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Net Benefit Costs [Table Text Block]

	Three Months Ended
	June 30,
	2016			2015
	(unaudited)
Service cost	$	28		$	26
Interest cost on projected benefit obligation		352			368
Expected return on plan assets		(323	)		(438	)
Recognized actuarial loss		48			45
Net periodic pension expense	$	105		$	1

Defined Benefit Plan Plan Assets Fair Value [Table Text Block]

	June 30, 2016						March 31, 2016
Description	Level 1		Level 2		Total		Level 1		Level 2		Total
	(unaudited)						(unaudited)
Cash and cash funds	$	17	$	-	$	17	$	121	$	-	$	121
Equity		398		-		398		351		-		351
Fixed interest		1,326		94		1,420		1,225		96		1,321
Mutual funds		13,156		13,203		26,359		13,527		13,394		26,921
Total	$	14,897	$	13,297	$	28,194	$	15,224	$	13,490	$	28,714

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Note 11 - Employee Equity Incentive Plans (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

	Three Months Ended June 30,
Statement of Operations Classifications	2016		2015
	(unaudited)
Cost of goods sold	$	100	$	122
Research, development and engineering (1)		303		460
Selling, general and administrative expenses		452		406
Stock-based compensation effect in income before taxes		855		988
Provision for income taxes (2)		342		346
Net stock-based compensation effects in net income	$	513	$	642

Schedule of Employee Service Share Based Compensation Fair Value Assumptions and Methodology [Table Text Block]

	Stock Options						Purchase Plan
	Three Months Ended June 30,						Three Months Ended June 30,
	2016			2015			2016			2015
	(unaudited)						(unaudited)
Weighted average estimated fair value of grant per share	$	3.96		$	6.32		$	3.94		$	3.15
Risk-free interest rate		1.4	%		2.0	%		0.26	%		0.1	%
Expected term in years		6.41			6.75			1.00			1.00
Volatility		41.0	%		50.7	%		42.9	%		33.7	%
Dividend yield		1.41	%		1.01	%		1.42	%		1.11	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Weighted Average
	Number of			Exercise Price		Intrinsic Value
	Shares			Per Share		(000) (1)
				(unaudited)
Balance at March 31, 2016		5,234,397		$	10.40
Options granted		222,000		$	10.97
Options exercised		(27,897	)	$	6.53	$	130
Options expired		(5,000	)	$	9.73
Balance at June 30, 2016		5,423,500		$	10.44
Exercisable at June 30, 2016		3,684,916		$	10.03
Exercisable at March 31, 2016		3,619,563		$	9.93

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Note 12 - Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2016	$	(10,639	)	$	(82	)	$	(9,545	)	$	(20,266	)
Other comprehensive income (loss) before reclassifications		(2,825	)		85			-			(2,740	)
Net loss reclassified from accumulated other comprehensive income (loss)		-			90			-			90
Net current period other comprehensive income (loss)		(2,825	)		175			-			(2,650	)
Balance as of June 30, 2016	$	(13,464	)	$	93		$	(9,545	)	$	(22,916	)

	Foreign Currency			Unrealized Gains (Losses) on Securities			Defined Benefit Pension Plans			Accumulated Other Comprehensive Income (Loss)
				(unaudited)
Balance as of March 31, 2015	$	(13,577	)	$	7		$	(9,518	)	$	(23,088	)
Other comprehensive income (loss) before reclassifications		2,692			(117	)		-			2,575
Net current period other comprehensive income (loss)		2,692			(117	)		-			2,575
Balance as of June 30, 2015	$	(10,885	)	$	(110	)	$	(9,518	)	$	(20,513	)

Reclassification out of Accumulated Other Comprehensive Income [Table Text Block]

Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)					Impacted Line Item on Unaudited Condensed Consolidated Income Statements
	Three Months Ended June 30,
	2016			2015
	(unaudited)
Impairment of marketable securities		(151	)		-	Other income (expense), net
Subtotal		(151	)		-	Income before income tax provision
Tax impact		61			-	Provision for income tax
Total reclassifications for the period	$	(90	)	$	-	Net income

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Note 13 - Computation of Earnings Per Share (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
	June 30,
	2016		2015
	(unaudited)
Net income	$	3,019	$	2,985
Weighted average shares - basic		31,401		31,746
Weighted average shares - diluted		32,001		32,733
Net income per share - basic	$	0.10	$	0.09
Net income per share - diluted	$	0.09	$	0.09

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Note 14 - Segment and Geographic Information (Tables)

3 Months Ended

Jun. 30, 2016

Notes Tables

Revenue from External Customers by Geographic Areas [Table Text Block]

	Three Months Ended June 30,
	2016		2015
	(unaudited)
United States	$	19,501	$	20,133
Europe and the Middle East
France		3,450		2,040
Germany		8,599		8,077
Italy		1,076		1,264
Netherlands		1,140		695
United Kingdom		3,627		3,220
Other		5,953		6,697
Asia Pacific
China		22,640		21,235
Japan		1,718		3,322
Korea		4,695		6,136
Malaysia		804		1,242
Singapore		3,007		3,117
Thailand		811		1,043
Other		1,747		1,484
Rest of the World
India		900		1,132
Other		970		1,210
Total	$	80,638	$	82,047

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended June 30,
	2016		2015
	(unaudited)
Power semiconductors	$	56,479	$	54,978
Integrated circuits		20,382		22,484
Systems and RF power semiconductors		3,777		4,585
Total	$	80,638	$	82,047

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Note 3 - Business Combinations (Details Textual) - RadioPulse [Member] - USD ($)		3 Months Ended
	May 01, 2015	Jun. 30, 2015
Business Combination, Consideration Transferred	$ 15,700,000
Payments to Acquire Businesses, Gross	14,700,000
Business Combination, Consideration Transferred, Other	1,000,000
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 6,000,000
Business Combination, Contingent Consideration Arrangements, Earnout Payment Period	3 years
Business Acquisition, Transaction Costs	$ 248,000
Employee Service Share-based Compensation, Cash Flow Effect, Cash Used to Settle Awards	$ 249,000	$ 249,000

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Note 3 - Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016	May 01, 2015
RadioPulse [Member]
Cash, restricted cash and cash equivalents			$ 196
Accounts receivable			1,497
Inventories			534
Property, plant and equipment			24
Prepaid expenses and other current assets			547
Identifiable intangible assets			2,867
Short-term borrowings			(2,354)
Accounts payable			(614)
Accruals and other liabilities			(1,926)
Total identifiable net liabilities			771
Goodwill			14,887
Total purchase consideration			$ 15,658
Goodwill	$ 42,313	$ 42,355

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Note 3 - Business Combinations - Acquired Finite-Lived Intangible Assets (Details) $ in Thousands	May 01, 2015 USD ($)
Developed Technology Rights [Member]
Fair Value	$ 1,005
Finite-Lived Intangible Assets, Amortization Method	Accelerated
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	5 years
In Process Research and Development [Member]
Fair Value	$ 1,188	[1]
Finite-Lived Intangible Assets, Amortization Method	Straight-line	[1]
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	5 years	[1]
Customer Relationships [Member]
Fair Value	$ 500
Finite-Lived Intangible Assets, Amortization Method	Accelerated
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	3 years
Order or Production Backlog [Member]
Fair Value	$ 174
Finite-Lived Intangible Assets, Amortization Method	Straight-line
Acquired Finite-Lived Intangible Assets, Estimated Useful Life	180 days
Fair Value	$ 2,867

[1] Amortization starts after the completion of the research and development activities of the related projects.

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Note 4 - Fair Value (Details Textual) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Mar. 31, 2016
Other than Temporary Impairment Losses, Investments	$ 151,000	$ 0
Auction Rate Preferred Securities Percentage Collateralized	100.00%		100.00%
Collateralized Asset Value Exceeding Value of ARPS Percentage	200.00%		200.00%
Debt, Long-term and Short-term, Combined Amount	$ 79,000,000		$ 87,100,000

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Note 4 - Fair Value - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands		Jun. 30, 2016	Mar. 31, 2016
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets
Money market funds	[1],[2]	$ 89,440	$ 115,974
Marketable equity securities	[2],[3]	1,879	1,749
Auction rate preferred securities	[2],[3]
Total Assets Measured at Fair Value	[2]	91,319	117,723
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets
Money market funds	[1],[2]
Marketable equity securities	[2],[3]
Auction rate preferred securities	[2],[3]	350	350
Total Assets Measured at Fair Value	[2]	350	350
Fair Value, Measurements, Recurring [Member]
Assets
Money market funds	[1],[2]	89,440	115,974
Marketable equity securities	[2],[3]	1,879	1,749
Auction rate preferred securities	[2],[3]	350	350
Total Assets Measured at Fair Value	[2]	91,669	118,073
Marketable equity securities		1,879	1,749
Auction rate preferred securities		$ 350	$ 350

[1] Included in "Cash and cash equivalents" on our unaudited condensed consolidated balance sheets.

[2] We did not have any recurring fair value measurements of assets or liabilities whose fair value was measured using significant unobservable inputs.

[3] Included in "Other assets" on our unaudited condensed consolidated balance sheets.

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Note 5 - Accounts Receivable - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Accounts receivable, gross	$ 43,751	$ 41,219
Allowances	(2,688)	(2,779)
Accounts receivable, net	$ 41,063	$ 38,440

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Note 6 - Other Assets - Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Marketable equity securities	$ 1,879	$ 1,749
Auction rate preferred securities	350	350
Long-term equity method investments	11,250	10,977
Other items	692	686
Total	$ 14,171	$ 13,762

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Note 7 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Raw materials	$ 18,252	$ 18,269
Work in process	40,285	41,549
Finished goods	27,119	29,786
Total	$ 85,656	$ 89,604

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Note 8 - Accrued Expenses and Other Current Liabilities - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Uninvoiced goods and services	$ 11,152	$ 8,824
Compensation and benefits	7,204	7,540
Income taxes	2,690	2,066
Commissions, royalties and other	2,529	2,860
Total	$ 23,575	$ 21,290

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Note 9 - Borrowing Arrangements (Details Textual)			3 Months Ended
	Nov. 20, 2015 USD ($)	Apr. 01, 2015 EUR (€)	Jun. 30, 2016 EUR (€)	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 EUR (€)	Mar. 31, 2016 USD ($)	Apr. 01, 2015 USD ($)
Bank of West Amended and Restated Credit Agreement November 20, 2015 [Member] | Minimum [Member]
Line of Credit Facility Basis Spread on Variable Rate			0.75%		0.75%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.25%	0.25%
Bank of West Amended and Restated Credit Agreement November 20, 2015 [Member] | Maximum [Member]
Line of Credit Facility Basis Spread on Variable Rate			2.50%		2.50%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.625%	0.625%
Bank of West Amended and Restated Credit Agreement November 20, 2015 [Member]
Line of Credit Facility, Initiation Date	Nov. 20, 2015
Line of Credit Facility, Maximum Borrowing Capacity	$ 125,000,000
Line of Credit Facility, Interest Rate at Period End			2.56%		2.56%
Debt Issuance Costs, Net					$ 257,000		$ 304,000
Long-term Line of Credit					73,000,000		80,000,000
Available Credit Line for Letter of Credit	$ 10,000,000
Line of Credit Facility, Expiration Date	Nov. 20, 2017
April 2015 IKB Deutsche Industriebank Loan Payable [Member]
Debt Instrument, Face Amount		€ 6,500,000						$ 7,200,000
Debt Instrument, Interest Rate, Stated Percentage		1.75%						1.75%
Debt Instrument, Periodic Payment, Principal			€ 232,000	$ 258,000
Long-term Debt, Gross			€ 5,300,000		5,900,000	€ 5,600,000	6,300,000
Debt Instrument, Maturity Date		Mar. 31, 2022
Notes Payable, Other Payables [Member]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt					$ 344,000		$ 1,100,000

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Note 10 - Pension Plans (Details Textual) $ in Millions	12 Months Ended
	Mar. 31, 2017 USD ($)	Jun. 30, 2016
United Kingdom and the Philippines Plans [Member] | Scenario, Forecast [Member]
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year	$ 1.1
Number of Defined Benefit Plans		3

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Note 10 - Pension Plans - Net Periodic Pension Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Service cost	$ 28	$ 26
Interest cost on projected benefit obligation	352	368
Expected return on plan assets	(323)	(438)
Recognized actuarial loss	48	45
Net periodic pension expense	$ 105	$ 1

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Note 10 - Pension Plans - Information on Plan Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Mar. 31, 2016
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets	$ 17	$ 121
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	398	351
Fair Value, Inputs, Level 1 [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,326	1,225
Fair Value, Inputs, Level 1 [Member] | Mutual Fund [Member]
Defined Benefit Plan, Fair Value of Plan Assets	13,156	13,527
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	14,897	15,224
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets
Fair Value, Inputs, Level 2 [Member] | Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	94	96
Fair Value, Inputs, Level 2 [Member] | Mutual Fund [Member]
Defined Benefit Plan, Fair Value of Plan Assets	13,203	13,394
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan, Fair Value of Plan Assets	13,297	13,490
Cash and Cash Equivalents [Member]
Defined Benefit Plan, Fair Value of Plan Assets	17	121
Equity Securities [Member]
Defined Benefit Plan, Fair Value of Plan Assets	398	351
Fixed Income Funds [Member]
Defined Benefit Plan, Fair Value of Plan Assets	1,420	1,321
Mutual Fund [Member]
Defined Benefit Plan, Fair Value of Plan Assets	26,359	26,921
Defined Benefit Plan, Fair Value of Plan Assets	$ 28,194	$ 28,714

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Note 11 - Employee Equity Incentive Plans (Details Textual) - USD ($)		3 Months Ended
	May 01, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 09, 2016	Aug. 30, 2013	Sep. 16, 2011	Sep. 10, 2009
Plan 2009 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized							900,000
Plan 2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized						600,000
Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					2,000,000
Stock Options of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		100.00%
Stock Options of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Stock Appreciation Rights of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		100.00%
Stock Appreciation Rights of Plans Two Thousand and Nine Two Thousand and Eleven and Two Thousand and Thirteen [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Plan 2016 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				2,000,000
Employee Stock Purchase Plan 1999 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		1,550,000
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent		85.00%
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate		15.00%
Stock Issued During Period, Shares, Employee Stock Purchase Plans		55,231
Common Stock, Capital Shares Reserved for Future Issuance		185,010
RadioPulse [Member]
Employee Service Share-based Compensation, Cash Flow Effect, Cash Used to Settle Awards	$ 249,000		$ 249,000
Estimated Statutory Income Tax Rate		40.00%	35.00%
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 6,800,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		2 years 292 days

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Note 11 - Employee Equity Incentive Plans - Allocated Share-based Compensation Expense (Details) - USD ($) $ in Thousands		3 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Cost of Sales [Member]
Stock-based Compensation Effect in Income before Taxes		$ 100	$ 122
Research and Development Expense [Member]
Stock-based Compensation Effect in Income before Taxes		303	460	[1]
Selling, General and Administrative Expenses [Member]
Stock-based Compensation Effect in Income before Taxes		452	406
Stock-based Compensation Effect in Income before Taxes		855	988
Provision for income taxes	[2]	342	346
Net stock-based compensation effects in net income		$ 513	$ 642

[1] Includes acquisition related compensation expenses of $249,000 during the quarter ended June 30, 2015.

[2] Calculated at the U.S. statutory federal income tax rate of 40% in fiscal 2017 and 35% in fiscal 2016.

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Note 11 - Employee Equity Incentive Plans - Fair Value and Assumptions (Details) - $ / shares	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Employee Stock Option [Member]
Weighted average estimated fair value of grant per share (in dollars per share)	$ 3.96	$ 6.32
Risk-free interest rate	1.40%	2.00%
Expected term in years	6 years 149 days	6 years 273 days
Volatility	41.00%	50.70%
Dividend yield	1.41%	1.01%
Employee Stock Purchase Plan 1999 [Member]
Weighted average estimated fair value of grant per share (in dollars per share)	$ 3.94	$ 3.15
Risk-free interest rate	0.26%	0.10%
Expected term in years	1 year	1 year
Volatility	42.90%	33.70%
Dividend yield	1.42%	1.11%

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Note 11 - Employee Equity Incentive Plans - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Jun. 30, 2016	Mar. 31, 2016
Options outstanding, beginning of period (in shares)		5,234,397
Weighted average exercise price per share, beginning balance (in dollars per share)		$ 10.40
Options oustanding, Options granted (in shares)		222,000
Weighted average exercise price per share, Options granted (in dollars per share)		$ 10.97
Options oustanding, Options exercised (in shares)		(27,897)
Weighted average exercise price per share, Options exercised (in dollars per share)		$ 6.53
Options exercised, Intrinsic Value	[1]	$ 130
Options oustanding, Options expired (in shares)		(5,000)
Weighted average exercise price per share, Options expired (in dollars per share)		$ 9.73
Options oustanding, ending balance (in shares)		5,423,500
Weighted average exercise price per share, ending balance (in dollars per share)		$ 10.44
Options exercisable (in shares)		3,684,916	3,619,563
Weighted average exercise price per share, exercisable (in dollars per share)		$ 10.03	$ 9.93

[1] Represents the difference between the exercise price and the value of our common stock at the time of exercise.

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Note 12 - Accumulated Other Comprehensive Income (Loss) - AOCI Change (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	$ (10,639)	$ (13,577)
Other comprehensive income (loss) before reclassifications	(2,825)	2,692
Net loss reclassified from accumulated other comprehensive income (loss)
Net current period other comprehensive income (loss)	(2,825)	2,692
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(13,464)	(10,885)
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(82)	7
Other comprehensive income (loss) before reclassifications	85	(117)
Net loss reclassified from accumulated other comprehensive income (loss)	90
Net current period other comprehensive income (loss)	175	(117)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	93	(110)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(9,545)	(9,518)
Other comprehensive income (loss) before reclassifications
Net loss reclassified from accumulated other comprehensive income (loss)
Net current period other comprehensive income (loss)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(9,545)	(9,518)
AOCI Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(20,266)	(23,088)
Other comprehensive income (loss) before reclassifications	(2,740)	2,575
Net loss reclassified from accumulated other comprehensive income (loss)	90
Net current period other comprehensive income (loss)	(2,650)	2,575
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	(22,916)	$ (20,513)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, Beginning of Period	(20,266)
Accumulated Other Comprehensive Income (Loss) Net Of Tax, End of Period	$ (22,916)

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Note 12 - Accumulated Other Comprehensive (Loss) - AOCI Reclass (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Other-than-Temporary Impairment Attributable to Parent [Member]
Other income (expense), net	$ (151)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Income before Income Tax Provision	(151)
Tax impact	61
Total reclassifications for the period	(90)
Other income (expense), net	815	(790)
Income before Income Tax Provision	5,271	4,647
Tax impact	(2,252)	(1,662)
Total reclassifications for the period	$ 3,019	$ 2,985

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Note 13 - Computation of Earnings Per Share (Details Textual) - shares	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Weighted Average Number Diluted Shares Outstanding Adjustment	600,000	987,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,889,670	868,702

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Note 13 - Computation of Earnings per Share - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Net income	$ 3,019	$ 2,985
Weighted average shares - basic (in shares)	31,401	31,746
Weighted average shares - diluted (in shares)	32,001	32,733
Net income per share - basic (in dollars per share)	$ 0.10	$ 0.09
Net income per share - diluted (in dollars per share)	$ 0.09	$ 0.09

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Note 14 - Segment and Geographic Information (Details Textual)	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Distributor 1 [Member]
Number of Entity Wide Revenue Major Customers	1	1
Concentration Risk, Percentage	13.80%	10.70%
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Distributor 2 [Member]
Number of Entity Wide Revenue Major Customers	1
Concentration Risk, Percentage	10.60%
Number of Reportable Segments	1	1
Number of Operating Segments	1	1

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Note 14 - Segment and Geographic - Segment and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
UNITED STATES
Net Revenues	$ 19,501	$ 20,133
FRANCE
Net Revenues	3,450	2,040
GERMANY
Net Revenues	8,599	8,077
ITALY
Net Revenues	1,076	1,264
NETHERLANDS
Net Revenues	1,140	695
UNITED KINGDOM
Net Revenues	3,627	3,220
Other Europe and the Middle East Regions [Member]
Net Revenues	5,953	6,697
CHINA
Net Revenues	22,640	21,235
JAPAN
Net Revenues	1,718	3,322
KOREA, REPUBLIC OF
Net Revenues	4,695	6,136
MALAYSIA
Net Revenues	804	1,242
SINGAPORE
Net Revenues	3,007	3,117
THAILAND
Net Revenues	811	1,043
Other Asia Pacific Regions [Member]
Net Revenues	1,747	1,484
INDIA
Net Revenues	900	1,132
Other Rest of the World [Member]
Net Revenues	970	1,210
Net Revenues	$ 80,638	$ 82,047

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Note 14 - Segment and Geographic Information - Revenue by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Power Semiconductors [Member]
Net Revenues	$ 56,479	$ 54,978
Integrated Circuits [Member]
Net Revenues	20,382	22,484
Systems and RF Power Semiconductors [Member]
Net Revenues	3,777	4,585
Net Revenues	$ 80,638	$ 82,047

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Note 15 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Income Tax Expense (Benefit)	$ 2,252	$ 1,662
Effective Income Tax Rate Reconciliation, Percent	42.70%	35.80%

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Note 16 - Commitments and Contingencies (Details Textual) - USD ($)		3 Months Ended
	Nov. 20, 2015	Jun. 30, 2016	Jun. 30, 2015	Jul. 01, 2016	Mar. 31, 2016
Bank of West Amended and Restated Credit Agreement November 20, 2015 [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 125,000,000
Available Credit Line for Letter of Credit	$ 10,000,000
Repayments of Debt		$ 7,000,000
Long-term Line of Credit		73,000,000			$ 80,000,000
Line of Credit Facility, Initiation Date	Nov. 20, 2015
Line of Credit Facility, Expiration Date	Nov. 20, 2017
Subsequent Event [Member] | Foreign Tax Authority [Member] | Bureau of Internal Revenue [Member]
Loss Contingency, Estimate of Possible Loss				$ 2,500,000
Repayments of Debt		$ 7,970,000	$ 449,000