MICROSEMI CORP - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 28, 2004

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File No. 0-8866

MICROSEMI CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		95-2110371
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)


2381 Morse Avenue, Irvine, California		92614
(Address of principal executive offices)		(Zip Code)

(949) 221-7100

(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 is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

The number of shares of the issuer’s Common Stock, $0.20 par value, outstanding on April 19, 2004 was 59,444,824.

PART I - FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

The unaudited consolidated income statements for the six months ended March 28, 2004 of Microsemi Corporation and Subsidiaries (“Microsemi”, “the Company”, “we”, “our”, “ours” and “us”), the unaudited consolidated statements of cash flows for the six months ended March 28, 2004, and the comparative unaudited consolidated financial information for the corresponding periods of the prior year, together with our balance sheets as of March 28, 2004 (unaudited) and as of September 28, 2003, are included herein.

MICROSEMI CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(amounts in thousands, except per share data)


	September 28, 2003			March 28, 2004
				(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	29,353		$	39,202
Accounts receivable, net of allowance for doubtful accounts, $1,445 at September 28, 2003 and $1,468 at March 28, 2004		28,866			32,024
Inventories		53,679			55,051
Deferred income taxes		5,239			5,239
Other current assets		1,234			1,611

Total current assets		118,371			133,127

Property and equipment, net		62,973			60,428
Deferred income taxes		10,162			10,162
Goodwill		3,258			3,258
Other intangible assets, net		6,622			6,017
Other assets		4,257			4,222

TOTAL ASSETS	$	205,643		$	217,214

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable	$	121		$	121
Current maturity of long-term debt		89			82
Accounts payable		11,918			13,464
Accrued liabilities		14,910			19,809
Income taxes payable		4,165			4,154

Total current liabilities		31,203			37,630

Long-term debt		449			432

Other long-term liabilities		4,131			3,956

Stockholders’ equity (see Note 10):
Preferred stock, $1.00 par value; authorized 1,000 shares; none issued		—			—
Common stock, $0.20 par value; authorized 100,000 shares; issued and outstanding 58,204 and 59,365 at September 28, 2003 and March 28, 2004, respectively		5,821			11,874
Capital in excess of par value of common stock		120,134			118,203
Retained earnings		43,915			45,138
Accumulated other comprehensive loss		(10	)		(19	)

Total stockholders’ equity		169,860			175,196

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	205,643		$	217,214

The accompanying notes are an integral part of these statements

MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Income Statements

(amounts in thousands, except earnings per share)


	Quarters Ended
	March 30, 2003			March 28, 2004
Net sales	$	48,217		$	57,745
Cost of sales		33,490			38,495

Gross profit		14,727			19,250

Operating expenses:
Selling, general and administrative		9,091			9,353
Research and development		4,825			5,362
Amortization of intangible assets		390			304
Restructuring charges		—			5,964
Gain on sales of assets, net		(2,821	)		—

Total operating expenses		11,485			20,983

Operating income (loss)		3,242			(1,733	)

Other income (expense):
Interest, net		(108	)		63
Other, net		3			(18	)

Total other income (expense)		(105	)		45

Income (loss) before income taxes		3,137			(1,688	)
Provision (benefit) for income taxes		1,035			(557	)

NET INCOME (LOSS)	$	2,102		$	(1,131	)

Earnings (loss) per share:
Basic	$	0.04		$	(0.02	)

Diluted	$	0.04		$	(0.02	)

Common and common equivalent shares outstanding:
Basic		57,868			59,119

Diluted		58,680			59,119

The accompanying notes are an integral part of these statements.

MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Income Statements

(amounts in thousands, except earnings per share)


	Six Months Ended
	March 30, 2003			March 28, 2004
Net sales	$	94,086		$	112,690
Cost of sales		66,330			75,258

Gross profit		27,756			37,432

Operating expenses:
Selling, general and administrative		18,108			19,060
Research and development		9,788			10,112
Amortization of intangible assets		713			606
Restructuring charges		686			5,964
Gain on sales of assets, net		(2,393	)		—

Total operating expenses		26,902			35,742

Operating income		854			1,690

Other income (expense):
Interest, net		(138	)		141
Other, net		(27	)		(6	)

Total other income (expense)		(165	)		135

Income before income taxes		689			1,825
Provision for income taxes		227			602

Income before cumulative effect of a change in accounting principle		462			1,223
Cumulative effect of a change in accounting principle, net of income taxes		(14,655	)		—

Net income (loss)	$	(14,193	)	$	1,223

Basic and Diluted earnings (loss) per share:
Earnings before cumulative effect of a change in accounting principle	$	0.01		$	0.02
Cumulative effect of a change in accounting principle		(0.25	)		—

Earnings (loss) per share	$	(0.24	)	$	0.02

Common and common equivalent shares outstanding:
-Basic		57,840			58,356

-Diluted		58,246			60,990

The accompanying notes are an integral part of these statements.

MICROSEMI CORPORATION AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

(amounts in thousands)


	Six Months Ended
	March 30, 2003			March 28, 2004
Cash flows from operating activities:
Net income (loss)	$	(14,193	)	$	1,223
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,345			6,063
Provision for doubtful accounts		201			97
Gain on dispositions of assets		(2,393	)		—
Impairment of assets		661			—
Impairment of goodwill, net of income taxes		14,655			—
Changes in assets and liabilities
Accounts receivable		1,847			(3,201	)
Inventories		1,445			(1,372	)
Other current assets		(88	)		(260	)
Accounts payable		(2,589	)		1,546
Accrued liabilities		(1,303	)		4,972
Income taxes payable		125			(11	)
Other long-term liabilities		(51	)		(175	)

Net cash provided by operating activities		3,662			8,882

Cash flows from investing activities:
Purchases of property and equipment		(5,357	)		(3,156	)
Changes in other assets		1,329			34
Proceeds from sales of assets		3,627			—

Net cash used in investing activities		(401	)		(3,122	)

Cash flows from financing activities:
Payments of long-term debt		(3,940	)		(24	)
Exercise of employee stock options		199			4,122

Net cash provided by (used in) financing activities		(3,741	)		4,098

Effect of exchange rate changes on cash		3