Attached files
| file | filename |
|---|---|
| 8-K - 8-K - INTERNATIONAL RECTIFIER CORP /DE/ | a12-4118_18k.htm |
Exhibit 99.1
International Rectifier Announces Second Quarter 2012 Results
EL SEGUNDO, Calif.—(BUSINESS WIRE)—February 2, 2012— International Rectifier Corporation (NYSE:IRF) today announced financial results for the second quarter (ended December 25, 2011) of its fiscal year 2012. Revenue for the second quarter fiscal year 2012 was $230.1 million, a 24% decrease from $302.7 million in the first quarter fiscal year 2012 and an 18.3% decrease from $281.7 million in the second quarter fiscal year 2011.
International Rectifier reported net loss of $6.3 million, or $0.09 per fully diluted share for the second quarter fiscal year 2012, compared with net income of $22.0 million, or $0.31 per fully diluted share in the first quarter fiscal year 2012. The second quarter fiscal year 2012 results included a reduction in intellectual property revenue due to a royalty over reporting and overpayment by one of the Company’s licensees in prior periods of $1.5 million, and $1.5 million equity investment impairment. Combined, these two items negatively impacted fully diluted earnings per share by $0.04. For the second quarter fiscal year 2011, International Rectifier reported a net income of $43.9 million, or $0.62 per fully diluted share.
“While industry conditions led to a sequential sales decline in the December quarter, we managed to reduce our channel inventory dollars by approximately 15%,” stated President and Chief Executive Officer Oleg Khaykin. “Despite the downturn, our design win activities were robust and we remain optimistic about our long-term growth prospects.”
Gross margin for the second quarter fiscal year 2012 was 35.4%, down 2.5 percentage points compared with the first quarter fiscal year 2012 and down from 43.0% in the second quarter fiscal year 2011.
Operating loss was $3.3 million compared with operating income of $30.2 million in the first quarter fiscal year 2012 and operating income of $44.6 million in the second quarter fiscal year 2011.
Research and development expenses for the second quarter fiscal year 2012 were $32.2 million, down from $33 million in the first quarter fiscal year 2012.
Selling, general and administrative expenses for the second quarter fiscal year 2012 were $50.6 million, up from $49 million in the prior quarter.
Cash, cash equivalents and marketable investments totaled $398.6 million at the end of the second quarter fiscal year 2012, including restricted cash of $1.4 million.
Cash used in operating activities for the second quarter fiscal year 2012 was $19.4 million.
The Company had 69,069,135 shares outstanding at the end of the quarter.
March Quarter Outlook
Oleg Khaykin noted: “We have seen improvements in orders and believe customers are starting to replenish inventory. As a result, we currently expect revenue to range from $230 million to $250 million. Gross margin is expected to be between 31% and 32% mainly due to planned lower factory utilization.
“The market is showing promising signs that a bottom has formed and demand is starting to improve. As demand returns, we remain well-positioned with new products and capacity for future growth,” concluded Mr. Khaykin.
Segment Table Information/Customer Segments
The business segment tables included with this release for the Company’s fiscal quarters ended December 25, 2011, September 25, 2011, and December 26, 2010, respectively, reconcile revenue and gross margin for the Company’s customer segments to the consolidated total amounts of such measures for the Company. What we refer to as our “customer segments” includes our Power Management Devices, Energy Saving Products, Automotive Products, Enterprise Power and HiRel reporting segments, and does not include our Intellectual Property reporting segment.
Quarterly Report on Form 10-Q
The Company expects to file its Quarterly Report on Form 10-Q for the second quarter of its 2012 fiscal year with the Securities and Exchange Commission on Friday, February 3, 2012. This financial report will be available for viewing and download at http://investor.irf.com.
NOTE: A conference call will begin today at 2:00 p.m. Pacific time. CEO Oleg Khaykin and CFO Ilan Daskal will discuss the company’s December quarter results and March quarter outlook. All participants, both in the U.S. and international, may join the call by dialing 706-679-3195 by 1:55 p.m. Pacific time. In order to join this conference call, participants will be required to provide the Conference Passcode: “International Rectifier”. Participants may also listen over the Internet at http://investor.irf.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download, and install any necessary audio software.
A taped replay of this call will be available from approximately 6:00 p.m. Pacific time on Thursday, February 2 through Thursday, February 9, 2012. To listen to the replay by phone, call 855-859-2056 or 404-537-3406 for international callers and enter reservation number 42587205. To listen to the replay over the Internet, please go to http://investor.irf.com. The live call and replay will also be available on www.streetevents.com.
About International Rectifier
International Rectifier Corporation (NYSE:IRF) is a world leader in power management technology. IR’s analog, digital, and mixed signal ICs, and other advanced power management products, enable high performance computing and save energy in a wide variety of business and consumer applications. Leading manufacturers of computers, energy efficient appliances, lighting, automobiles, satellites, aircraft, and defense systems rely on IR’s power management solutions to power their next generation products. For more information, go to www.irf.com.
Forward-Looking Statements:
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to expectations concerning matters that (a) are not historical facts, (b) predict or forecast future events or results, or (c) embody assumptions that may prove to have been inaccurate. These forward-looking statements involve risks, uncertainties and assumptions. When we use words such as “believe,” “expect,” “anticipate,” “will” or similar expressions, we are making forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give readers any assurance that such expectations will prove correct. The actual results may differ materially from those anticipated in the forward-looking statements as a result of numerous factors, many of which are beyond our control. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, reduced demand arising from a decline or volatility in general market and economic conditions or customer forecasts; order cancellations due to decreased demand or softening market conditions for customer products; reduced demand as a result of adverse effects on customers from the recent flooding in Thailand; reduced margins from lower than expected factory utilization and higher than expected costs; manufacturing delays; operational and manufacturing disruptions from implementing our new enterprise resource planning (ERP) system and additional costs related thereto; additional costs or adverse financial effects from implementing our strategic growth initiatives; volatility or deterioration of capital markets; the effects of longer lead times for certain products on meeting demand and any inability by us to satisfy or to timely satisfy customer demand, including, without limitation, operational effects from our ERP system; unexpected costs or delays in implementing our plans to secure and qualify additional manufacturing capacity for our products, including the use of third party contract manufacturers and the purchase and installation of additional manufacturing equipment; the adverse impact (whether financial, operational or otherwise) of regulatory, investigative, enforcement and legal actions, including without limitation, any of the foregoing in regards to environmental compliance; increased competition in the highly competitive semiconductor business that could adversely affect the prices of our products or our ability to secure additional business; the effects of manufacturing, operational and vendor disruptions; unexpected delays and disruptions in our supply, manufacturing and delivery efforts due to, among other things, supply constraints, equipment malfunction, power or other utility disruptions or natural disasters (including without limitation, any effects from events that may occur from natural and related disasters affecting Japan, Thailand and the United States); delays in launching new technology products; our ability to maintain current intellectual property licenses and obtain new intellectual property licenses; costs arising from pending and threatened litigation or claims (including, without limitation threatened litigation and claims related to intellectual property); and other uncertainties disclosed in the Company’s reports filed from time to time with the Securities and Exchange Commission, including its most recent reports on Forms 10-K and 10-Q, as filed from time to time.
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|
|
|
Three Months Ended |
| |||||||
|
|
|
December 25, |
|
September 25, |
|
December 26, |
| |||
|
Revenues |
|
$ |
230,078 |
|
$ |
302,741 |
|
$ |
281,744 |
|
|
Cost of sales |
|
148,659 |
|
187,903 |
|
160,733 |
| |||
|
Gross profit |
|
81,419 |
|
114,838 |
|
121,011 |
| |||
|
|
|
|
|
|
|
|
| |||
|
Selling, general and administrative expense |
|
50,558 |
|
48,991 |
|
46,617 |
| |||
|
Research and development expense |
|
32,227 |
|
33,028 |
|
28,544 |
| |||
|
Amortization of acquisition-related intangible assets |
|
1,939 |
|
2,615 |
|
1,242 |
| |||
|
Asset impairment, restructuring and other charges |
|
— |
|
— |
|
(4 |
) | |||
|
Operating income (loss) |
|
(3,305 |
) |
30,204 |
|
44,612 |
| |||
|
Other expense, net |
|
1,956 |
|
2,203 |
|
1,708 |
| |||
|
Interest income, net |
|
(31 |
) |
(209 |
) |
(4,152 |
) | |||
|
Income (loss) before income taxes |
|
(5,230 |
) |
28,210 |
|
47,056 |
| |||
|
Provision for income taxes |
|
1,107 |
|
6,247 |
|
3,127 |
| |||
|
Net income (loss) |
|
$ |
(6,337 |
) |
$ |
21,963 |
|
$ |
43,929 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income (loss) per common share-basic (1) |
|
$ |
(0.09 |
) |
$ |
0.31 |
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
| |||
|
Net income (loss) per common share-diluted (1) |
|
$ |
(0.09 |
) |
$ |
0.31 |
|
$ |
0.62 |
|
|
|
|
|
|
|
|
|
| |||
|
Average common shares outstanding—basic |
|
69,046 |
|
69,768 |
|
69,587 |
| |||
|
Average common shares and potentially dilutive shares outstanding—diluted |
|
69,046 |
|
70,285 |
|
70,235 |
| |||
(1) Net income per common share is computed using the two-class method as required by accounting rules. We do not pay dividends; however, net income must be allocated to unvested restricted stock units (“RSUs”) on which we could pay dividend equivalents. The amount of net income allocated to these RSUs is excluded from income available to common shareholders in the calculation of earnings per share. These amounts were $267 thousand, and $713 thousand for the three months ended September 25, 2011, and December 26, 2010, respectively. As we were in a net loss for the three months ended December 25, 2011, we did not have any income to allocate to unvested RSUs on which we could pay dividend equivalents.
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
December 25, |
|
September 25, |
|
December 26, |
| |||
|
Assets |
|
|
|
|
|
|
| |||
|
Current assets: |
|
|
|
|
|
|
| |||
|
Cash and cash equivalents |
|
$ |
271,489 |
|
$ |
264,539 |
|
$ |
249,301 |
|
|
Restricted cash |
|
492 |
|
445 |
|
1,629 |
| |||
|
Short-term investments |
|
115,344 |
|
172,248 |
|
300,939 |
| |||
|
Trade accounts receivable, net |
|
165,963 |
|
183,408 |
|
169,426 |
| |||
|
Inventories |
|
308,896 |
|
282,927 |
|
223,162 |
| |||
|
Current deferred tax assets |
|
2,005 |
|
1,988 |
|
2,008 |
| |||
|
Prepaid expenses and other receivables |
|
38,246 |
|
34,918 |
|
30,412 |
| |||
|
Total current assets |
|
902,435 |
|
940,473 |
|
976,877 |
| |||
|
Restricted cash |
|
915 |
|
1,632 |
|
1,776 |
| |||
|
Long-term investments |
|
10,312 |
|
4,815 |
|
48,820 |
| |||
|
Property, plant and equipment, net |
|
463,273 |
|
459,061 |
|
368,357 |
| |||
|
Goodwill |
|
121,570 |
|
121,570 |
|
74,955 |
| |||
|
Acquisition-related intangible assets, net |
|
32,391 |
|
34,330 |
|
12,485 |
| |||
|
Long-term deferred tax assets |
|
24,945 |
|
25,118 |
|
7,995 |
| |||
|
Other assets |
|
51,804 |
|
55,519 |
|
50,072 |
| |||
|
Total assets |
|
$ |
1,607,645 |
|
$ |
1,642,518 |
|
$ |
1,541,337 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
| |||
|
Current liabilities: |
|
|
|
|
|
|
| |||
|
Accounts payable |
|
$ |
93,695 |
|
$ |
102,509 |
|
$ |
100,236 |
|
|
Accrued income taxes |
|
4,442 |
|
11,714 |
|
5,164 |
| |||
|
Accrued salaries, wages and benefits |
|
39,755 |
|
44,801 |
|
50,323 |
| |||
|
Current deferred tax liabilities |
|
2 |
|
2 |
|
1,687 |
| |||
|
Other accrued expenses |
|
84,221 |
|
96,531 |
|
79,991 |
| |||
|
Total current liabilities |
|
222,115 |
|
255,557 |
|
237,401 |
| |||
|
Long-term deferred tax liabilities |
|
3,856 |
|
3,845 |
|
5,334 |
| |||
|
Other long-term liabilities |
|
37,503 |
|
35,662 |
|
34,061 |
| |||
|
Total liabilities |
|
263,474 |
|
295,064 |
|
276,796 |
| |||
|
Commitments and contingencies |
|
|
|
|
|
|
| |||
|
Stockholders’ equity: |
|
|
|
|
|
|
| |||
|
Common shares |
|
74,795 |
|
74,708 |
|
74,184 |
| |||
|
Capital contributed in excess of par value of shares |
|
1,029,085 |
|
1,023,632 |
|
1,011,345 |
| |||
|
Treasury stock, at cost |
|
(104,821 |
) |
(104,821 |
) |
(73,589 |
) | |||
|
Retained earnings |
|
361,360 |
|
367,698 |
|
256,616 |
| |||
|
Accumulated other comprehensive loss |
|
(16,248 |
) |
(13,763 |
) |
(4,015 |
) | |||
|
Total stockholders’ equity |
|
1,344,171 |
|
1,347,454 |
|
1,264,541 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
1,607,645 |
|
$ |
1,642,518 |
|
$ |
1,541,337 |
|
(1) Certain reclassifications have been made to the previously reported amounts to conform to the current presentation.
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
3 Months Ended |
| |||||||
|
|
|
December 25, |
|
September |
|
December 26, |
| |||
|
Cash flows from operating activities: |
|
|
|
|
|
|
| |||
|
Net income (loss) |
|
$ |
(6,337 |
) |
$ |
21,963 |
|
$ |
43,929 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
| |||
|
Depreciation and amortization |
|
20,670 |
|
19,523 |
|
19,638 |
| |||
|
Amortization of acquisition-related intangible assets |
|
1,939 |
|
2,615 |
|
1,242 |
| |||
|
Loss (gain) on disposal of fixed assets |
|
431 |
|
692 |
|
(48 |
) | |||
|
Stock compensation expense |
|
4,262 |
|
3,707 |
|
3,660 |
| |||
|
Gain on sale of investments |
|
(7 |
) |
(54 |
) |
(3,483 |
) | |||
|
Other-than-temporary impairment of investments |
|
1,844 |
|
535 |
|
— |
| |||
|
(Recovery of) provision for bad debts |
|
(34 |
) |
1,232 |
|
(449 |
) | |||
|
Provision for inventory write-downs |
|
3,138 |
|
4,211 |
|
2,635 |
| |||
|
Gain on derivatives |
|
(77 |
) |
(1,409 |
) |
(1,684 |
) | |||
|
Deferred income taxes |
|
2,132 |
|
1,424 |
|
(90 |
) | |||
|
Tax benefit from stock-based awards |
|
— |
|
— |
|
536 |
| |||
|
Excess tax benefit from stock-based awards |
|
(50 |
) |
(623 |
) |
(1,694 |
) | |||
|
Changes in operating assets and liabilities, net |
|
(48,343 |
) |
(39,237 |
) |
(10,664 |
) | |||
|
Other |
|
1,038 |
|
2,021 |
|
3,531 |
| |||
|
Net cash (used in) provided by operating activities |
|
(19,394 |
) |
16,600 |
|
57,059 |
| |||
|
Cash flows from investing activities: |
|
|
|
|
|
|
| |||
|
Additions to property, plant and equipment |
|
(26,603 |
) |
(45,245 |
) |
(32,945 |
) | |||
|
Proceeds from sale of property, plant and equipment |
|
|
|
|
|
800 |
| |||
|
Sale of investments |
|
9,521 |
|
5,342 |
|
18,697 |
| |||
|
Maturities of investments |
|
95,298 |
|
52,025 |
|
64,400 |
| |||
|
Purchase of investments |
|
(53,753 |
) |
(36,096 |
) |
(89,524 |
) | |||
|
Release from (additions to) restricted cash |
|
675 |
|
(21 |
) |
— |
| |||
|
Net cash (provided by) used in investing activities |
|
25,138 |
|
(23,995 |
) |
(38,572 |
) | |||
|
Cash flows from financing activities: |
|
|
|
|
|
|
| |||
|
Proceeds from exercise of stock options |
|
1,364 |
|
399 |
|
6,859 |
| |||
|
Excess tax benefit from stock-based awards |
|
50 |
|
623 |
|
1,694 |
| |||
|
Purchase of treasury stock |
|
— |
|
(23,576 |
) |
(4,887 |
) | |||
|
Net settlement of restricted stock units for tax withholdings |
|
(87 |
) |
(1,802 |
) |
(1,667 |
) | |||
|
Net cash (used in) provided by financing activities |
|
1,327 |
|
(24,356 |
) |
1,999 |
| |||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(121 |
) |
(2,441 |
) |
(866 |
) | |||
|
Net increase (decrease) in cash and cash equivalents |
|
6,950 |
|
(34,192 |
) |
19,620 |
| |||
|
Cash and cash equivalents, beginning of period |
|
264,539 |
|
298,731 |
|
229,681 |
| |||
|
Cash and cash equivalents, end of period |
|
$ |
271,489 |
|
$ |
264,539 |
|
$ |
249,301 |
|
(1) Certain reclassifications have been made to the previously reported amounts to conform to the current presentation.
For the three months ended December 25, 2011 and September 25, 2011, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
|
|
|
December 25, 2011 |
|
September 25, 2011 |
| ||||||||||
|
Business Segment |
|
Revenues |
|
Percentage |
|
Gross |
|
Revenues |
|
Percentage |
|
Gross |
| ||
|
Power management devices |
|
$ |
72,490 |
|
31.5 |
% |
29.3 |
% |
$ |
111,207 |
|
36.7 |
% |
29.4 |
% |
|
Energy saving products |
|
58,938 |
|
25.6 |
|
36.6 |
|
76,058 |
|
25.1 |
|
41.4 |
| ||
|
Automotive products |
|
24,647 |
|
10.7 |
|
17.9 |
|
28,900 |
|
9.6 |
|
31.5 |
| ||
|
Enterprise power |
|
30,530 |
|
13.3 |
|
36.1 |
|
35,966 |
|
11.9 |
|
40.3 |
| ||
|
HiRel |
|
44,410 |
|
19.3 |
|
54.2 |
|
48,842 |
|
16.1 |
|
51.8 |
| ||
|
Customer segments total |
|
231,015 |
|
100.4 |
|
35.6 |
|
300,973 |
|
99.4 |
|
37.6 |
| ||
|
Intellectual property |
|
(937 |
) |
(0.4 |
) |
(100.0 |
) |
1,768 |
|
0.6 |
|
100.0 |
| ||
|
Consolidated total |
|
$ |
230,078 |
|
100.0 |
% |
35.4 |
% |
$ |
302,741 |
|
100.0 |
% |
37.9 |
% |
For the three months ended December 26, 2010, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
|
|
|
December 26, 2010 |
| |||||
|
Business Segment |
|
Revenues |
|
Percentage |
|
Gross |
| |
|
Power management devices |
|
$ |
112,550 |
|
39.9 |
% |
37.1 |
% |
|
Energy saving products |
|
63,056 |
|
22.4 |
|
47.3 |
| |
|
Automotive products |
|
25,514 |
|
9.1 |
|
32.5 |
| |
|
Enterprise power |
|
31,600 |
|
11.2 |
|
50.5 |
| |
|
HiRel |
|
47,066 |
|
16.7 |
|
49.3 |
| |
|
Customer segments total |
|
279,786 |
|
99.3 |
|
42.6 |
| |
|
Intellectual property |
|
1,958 |
|
0.7 |
|
100.0 |
| |
|
Consolidated total |
|
$ |
281,744 |
|
100.0 |
% |
43.0 |
% |
International Rectifier Corporation
Investors:
Chris Toth
310-252-7731
or
Media:
Sian Cummings
310-252-7148