| International Rectifier Announces First Quarter Fiscal Year 2010 Results |
EL SEGUNDO, Calif.--(BUSINESS WIRE)--Nov. 5, 2009--
International Rectifier Corporation (NYSE:IRF) today announced financial
results for the first quarter fiscal year 2010, ended September 27,
2009. Revenue for the first quarter fiscal year 2010 was $179.4 million,
a 12% increase from $159.6 million in the fourth quarter fiscal year
2009 and a 27% decrease from $244.5 million in the first quarter fiscal
year 2009. Revenue for the fourth quarter fiscal year 2009 included $2.7
million of Transition Services segment revenue. The first quarter fiscal
year 2009 included $18.7 million of Intellectual Property revenue
recognized from a one-time patent license amendment and $12.4 million of
Transition Services segment revenue.
International Rectifier reported a first quarter fiscal year 2010 net
loss of $16.9 million, or $0.24 per share, compared with net income of
$29.1 million, or $0.40 per share in the prior quarter, and a net loss
of $4.2 million, or $0.06 per share in the first quarter fiscal year
2009. The results for the fourth quarter fiscal year 2009 included a
$96.1 million gain on the divestiture of the Power Control Systems (PCS)
business, related to the settlement agreement with Vishay
Intertechnology, Inc., a $45.0 million charge related to an agreement in
principle to settle the pending securities class action litigation, a
$9.6 million tax benefit and a $9.5 million expense recovery from an
insurance reimbursement.
Gross margin was 26.4%, up from 20.8% in the prior quarter and down from
39.4% in the first quarter fiscal year 2009. Gross margin for the first
quarter fiscal year 2009 included a benefit from $18.7 million of
Intellectual Property revenue with a 100% gross margin recognized from a
one-time patent license amendment.
Research and development expenses for the first quarter fiscal year 2010
were $22.8 million, down from $26.2 million in the prior quarter.
Selling, general and administrative expenses for the first quarter
fiscal year 2010 were $43.6 million, compared with $83.0 million in the
prior quarter. Selling, general and administrative expenses for the
fourth quarter fiscal year 2009 included a $45.0 million charge related
to the agreement in principle to settle the pending securities class
action litigation and a $9.5 million expense recovery from an insurance
reimbursement.
Cash, cash equivalents and marketable investments totaled $591.0 million
at the end of the first quarter fiscal year 2010. This included
restricted cash of $3.9 million. Net cash used in operating activities
for the first quarter fiscal year 2010 was $7.1 million.
The Company had 71,270,161 shares outstanding at the end of the quarter.
Second Quarter Outlook
International Rectifier President and Chief Executive Officer Oleg
Khaykin stated: “The growth momentum we experienced in the September
quarter continues into the December quarter. We currently expect second
quarter fiscal year 2010 revenue to range from $185 million to $200
million.”
“The strong design win activity in the past year in discrete products,
servers and notebooks and energy saving appliances, together with
recovery in automotive and industrial demand, is starting to show
results. We are confident that we are taking steps in the right
direction to better position IR for future growth.”
Segment Table Information
The customer segment tables included with this release for the Company’s
fiscal quarters ended September 27, 2009, June 28, 2009 and September
28, 2008, respectively, reconcile revenue and gross margin for the
Company’s ongoing customer segments to the consolidated total amounts of
such measures for the Company.
Quarterly Report on Form 10-Q
The Company expects to file its 2010 fiscal first quarter report on Form
10-Q with the Securities and Exchange Commission on Friday, November 6,
2009. This financial report will be available for viewing and download
at http://investor.irf.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; reduced margins from low factory utilization and inventory
reduction efforts; continued volatility and further deterioration of the
capital markets; the effects of longer lead times for certain products
on meeting demand; unexpected costs or delays in implementing our cost
savings programs, including the ability to transfer, consolidate and
qualify product lines and unexpected costs in connection with the
closure of facilities; the ability of the Company to achieve the
expected reductions in headcount and expected savings; the impact of
regulatory, investigative and legal actions; increased competition in
the highly competitive semiconductor business that could adversely
affect the prices of our products; the effects of manufacturing,
operational and vendor disruptions and inefficiencies from swine flu and
similar influenza; our ability to maintain current IP licenses and
obtain new IP licenses; the material weaknesses in our internal control
over financial reporting that we have identified that could impact our
ability to report our results of operations and financial condition
accurately and in a timely manner and the extensive work remaining to
remedy these material weaknesses in our internal control over financial
reporting; 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. Additionally,
to the foregoing factors should be added the financial, market, supply
disruption and other ramifications of terrorist actions and natural
disasters.
NOTE: A conference call will begin today at 5:15 p.m. Eastern
time (2:15 p.m. Pacific time). Participants can join the call by dialing
706-679-3195 or by logging onto the Internet at http://investor.irf.com
or http://www.streetevents.com
at least 15 minutes ahead of the start time. A replay of the call will
be available from approximately 5:15 p.m. Pacific time on Thursday,
November 5, through Thursday, November 12, 2009. To listen to the replay
by phone, call 800-642-1687 or 706-645-9291 for international callers
and enter reservation number 37154132. 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.
The Company plans to present an updated investor presentation at its
2009 Annual Meeting to be held at The Belamar Hotel, located at
3501 Sepulveda Boulevard in Manhattan Beach, California next Monday,
November 9, at 9:00 a.m. A copy of the presentation will be posted and
available for viewing at the Company’s investor relations website at http://investor.irf.com
that morning prior to the annual meeting.
|
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
|
|
|
|
|
|
Three Months Ended
|
|
|
September 27,
2009
|
|
June 28,
2009 (1)
|
|
September 28,
2008
|
|
Revenues
|
$
|
179,371
|
|
|
$
|
159,557
|
|
|
$
|
244,474
|
|
|
Cost of sales
|
|
132,014
|
|
|
|
126,372
|
|
|
|
148,082
|
|
|
Gross profit
|
|
47,357
|
|
|
|
33,185
|
|
|
|
96,392
|
|
|
Selling, general and administrative expense
|
|
43,582
|
|
|
|
82,959
|
|
|
|
64,877
|
|
|
Research and development expense
|
|
22,827
|
|
|
|
26,214
|
|
|
|
24,717
|
|
|
Amortization of acquisition-related intangible assets
|
|
1,094
|
|
|
|
1,117
|
|
|
|
1,097
|
|
|
Asset impairment, restructuring and other charges
|
|
167
|
|
|
|
(71
|
)
|
|
|
471
|
|
|
Gain on divestiture
|
|
—
|
|
|
|
(96,136
|
)
|
|
|
—
|
|
|
Operating (loss) income
|
|
(20,313
|
)
|
|
|
19,102
|
|
|
|
5,230
|
|
|
Other expense, net
|
|
778
|
|
|
|
2,910
|
|
|
|
14,582
|
|
|
Interest income, net
|
|
(3,970
|
)
|
|
|
(3,312
|
)
|
|
|
(5,060
|
)
|
|
Loss (income) before income taxes
|
|
(17,121
|
)
|
|
|
19,504
|
|
|
|
(4,292
|
)
|
|
Benefit from income taxes
|
|
(221
|
)
|
|
|
(9,589
|
)
|
|
|
(106
|
)
|
|
Net (loss) income
|
$
|
(16,900
|
)
|
|
$
|
29,093
|
|
|
$
|
(4,186
|
)
|
|
|
|
|
|
|
|
|
Net (loss) income per share-basic
|
$
|
(0.24
|
)
|
|
$
|
0.40
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
Net (loss) income per share-diluted
|
$
|
(0.24
|
)
|
|
$
|
0.40
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
Average common shares outstanding—basic
|
|
71,218
|
|
|
|
71,885
|
|
|
|
72,843
|
|
|
Average common shares and potentially dilutive
|
|
|
|
|
|
|
securities outstanding—diluted
|
|
71,218
|
|
|
|
71,895
|
|
|
|
72,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Beginning in fiscal year 2010 the Company’s restricted
stock units are treated as participating securities for the purpose of
computing basic and diluted earnings per share as a result of the
adoption of FASB ASC 260-10-45 (formerly FSP EITF 03-6-1) effective for
the first quarter of fiscal 2010. Prior period basic and diluted
shares have been adjusted to reflect this change.
|
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
|
|
|
|
|
|
|
September 27,
2009
|
|
June 28,
2009
|
|
September 28,
2008 (1)(2)
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
292,499
|
|
|
$
|
365,761
|
|
|
$
|
302,782
|
|
Restricted cash
|
|
3,925
|
|
|
|
3,925
|
|
|
|
4,341
|
|
Short-term investments
|
|
199,116
|
|
|
|
113,247
|
|
|
|
102,965
|
|
Trade accounts receivable, net
|
|
112,928
|
|
|
|
97,572
|
|
|
|
110,322
|
|
Inventories
|
|
152,586
|
|
|
|
151,121
|
|
|
|
175,889
|
|
Current deferred tax assets
|
|
1,248
|
|
|
|
1,223
|
|
|
|
13,071
|
|
Prepaid expenses and other receivables
|
|
30,002
|
|
|
|
28,556
|
|
|
|
52,851
|
|
Total current assets
|
|
792,304
|
|
|
|
761,405
|
|
|
|
762,221
|
|
Restricted cash
|
|
—
|
|
|
|
—
|
|
|
|
15,046
|
|
Long-term investments
|
|
95,278
|
|
|
|
121,508
|
|
|
|
286,696
|
|
Property, plant and equipment, net
|
|
358,684
|
|
|
|
369,713
|
|
|
|
488,810
|
|
Goodwill
|
|
74,955
|
|
|
|
74,955
|
|
|
|
98,822
|
|
Acquisition-related intangible assets, net
|
|
10,727
|
|
|
|
11,821
|
|
|
|
15,128
|
|
Long-term deferred tax assets
|
|
7,913
|
|
|
|
7,994
|
|
|
|
89,971
|
|
Other assets
|
|
55,652
|
|
|
|
53,911
|
|
|
|
54,696
|
|
Total assets
|
$
|
1,395,513
|
|
|
$
|
1,401,307
|
|
|
$
|
1,811,390
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
$
|
70,627
|
|
|
$
|
62,570
|
|
|
$
|
66,349
|
|
Accrued income taxes
|
|
8,417
|
|
|
|
6,830
|
|
|
|
29,992
|
|
Accrued salaries, wages and commissions
|
|
20,890
|
|
|
|
22,325
|
|
|
|
26,989
|
|
Current deferred tax liabilities
|
|
2,793
|
|
|
|
2,793
|
|
|
|
2,266
|
|
Other accrued expenses
|
|
116,201
|
|
|
|
114,043
|
|
|
|
99,402
|
|
Total current liabilities
|
|
218,928
|
|
|
|
208,561
|
|
|
|
224,998
|
|
Long-term deferred tax liabilities
|
|
5,266
|
|
|
|
4,439
|
|
|
|
4,975
|
|
Deferred gain on divestiture
|
|
—
|
|
|
|
—
|
|
|
|
112,922
|
|
Other long-term liabilities
|
|
53,270
|
|
|
|
53,055
|
|
|
|
56,332
|
|
Total liabilities
|
|
277,464
|
|
|
|
266,055
|
|
|
|
399,227
|
|
Commitments and contingencies
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
Common shares
|
|
73,181
|
|
|
|
73,101
|
|
|
|
72,876
|
|
Capital contributed in excess of par value of shares
|
|
984,916
|
|
|
|
981,786
|
|
|
|
974,313
|
|
Treasury stock, at cost
|
|
(23,632
|
)
|
|
|
(23,632
|
)
|
|
|
—
|
|
Retained earnings
|
|
68,115
|
|
|
|
85,015
|
|
|
|
328,246
|
|
Accumulated other comprehensive income
|
|
15,469
|
|
|
|
18,982
|
|
|
|
36,728
|
|
Total stockholders’ equity
|
|
1,118,049
|
|
|
|
1,135,252
|
|
|
|
1,412,163
|
|
Total liabilities and stockholders’ equity
|
$
|
1,395,513
|
|
|
$
|
1,401,307
|
|
|
$
|
1,811,390
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) In the fourth quarter of fiscal year 2009, the Company
changed its method of accounting for patent-related costs. Prior
periods have been restated to reflect this change.
(2) 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)
|
|
|
|
|
|
Three Months Ended
|
|
|
September 27,
2009
|
|
September 28,
2008
|
|
Cash flow from operating activities:
|
|
|
|
|
Net loss
|
$
|
(16,900
|
)
|
|
$
|
(4,186
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
16,558
|
|
|
|
16,622
|
|
|
Amortization of acquisition-related intangible assets
|
|
1,093
|
|
|
|
1,097
|
|
|
Stock compensation expense
|
|
2,539
|
|
|
|
1,190
|
|
|
Provision for bad debt
|
|
41
|
|
|
|
225
|
|
|
Provision for inventory write-downs
|
|
(5,135
|
)
|
|
|
951
|
|
|
Deferred income taxes
|
|
(1,830
|
)
|
|
|
163
|
|
|
Write-down of investments
|
|
1,905
|
|
|
|
15,198
|
|
|
(Gain) loss on derivatives
|
|
(1,256
|
)
|
|
|
178
|
|
|
(Gain) loss on sale of investments
|
|
(2,560
|
)
|
|
|
927
|
|
|
Changes in operating assets and liabilities, net
|
|
(2,425
|
)
|
|
|
(52,260
|
)
|
|
Other
|
|
901
|
|
|
|
3,764
|
|
|
Net cash used in operating activities
|
|
(7,069
|
)
|
|
|
(16,131
|
)
|
|
Cash flow from investing activities:
|
|
|
|
|
Additions to property, plant and equipment
|
|
(9,466
|
)
|
|
|
(4,799
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
50
|
|
|
|
19
|
|
|
Additions to restricted cash
|
|
—
|
|
|
|
(34
|
)
|
|
Sale or maturities of investments
|
|
52,757
|
|
|
|
60,086
|
|
|
Purchase of investments
|
|
(110,420
|
)
|
|
|
(57,444
|
)
|
|
Other, net
|
|
—
|
|
|
|
1,032
|
|
|
Net cash used in investing activities
|
|
(67,079
|
)
|
|
|
(1,140
|
)
|
|
Cash flow from financing activities:
|
|
|
|
|
Proceeds from exercise of stock options and stock participation plan
|
|
870
|
|
|
|
981
|
|
|
Net settlement of restricted stock units
|
|
(192
|
)
|
|
|
—
|
|
|
Other, net
|
|
—
|
|
|
|
(129
|
)
|
|
Net cash provided by financing activities
|
|
678
|
|
|
|
852
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
208
|
|
|
|
(1,263
|
)
|
|
Net decrease in cash and cash equivalents
|
|
(73,262
|
)
|
|
|
(17,682
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
365,761
|
|
|
|
320,464
|
|
|
Cash and cash equivalents, end of period
|
$
|
292,499
|
|
|
$
|
302,782
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 27, 2009 and September 28, 2008,
revenue and gross margin by reportable segments are as follows (in
thousands, except percentages):
|
|
|
Three Months Ended
September 27, 2009
(Unaudited)
|
|
Three Months Ended
September 28, 2008
(Unaudited)
|
|
Business Segment
|
|
Revenues
|
|
Percentage
of Total
|
|
Gross
Margin
|
|
Revenues
|
|
Percentage
of Total
|
|
Gross
Margin
|
|
Power Management Devices
|
|
$
|
66,524
|
|
37.1
|
%
|
|
5.3
|
%
|
|
$
|
73,778
|
|
30.2
|
%
|
|
21.4
|
%
|
|
Energy-Saving Products
|
|
|
37,863
|
|
21.1
|
|
|
34.6
|
|
|
|
46,136
|
|
18.9
|
|
|
42.9
|
|
|
HiRel
|
|
|
32,609
|
|
18.2
|
|
|
48.2
|
|
|
|
37,352
|
|
15.3
|
|
|
52.7
|
|
|
Automotive Products
|
|
|
13,192
|
|
7.4
|
|
|
18.3
|
|
|
|
17,593
|
|
7.2
|
|
|
33.4
|
|
|
Enterprise Power
|
|
|
27,445
|
|
15.3
|
|
|
39.6
|
|
|
|
37,279
|
|
15.2
|
|
|
42.6
|
|
|
Ongoing customer segments total
|
|
|
177,633
|
|
99.0
|
|
|
25.7
|
|
|
|
212,138
|
|
86.8
|
|
|
36.3
|
|
|
Intellectual Property
|
|
|
1,738
|
|
1.0
|
|
|
100.0
|
|
|
|
19,967
|
|
8.2
|
|
|
100.0
|
|
|
Ongoing segments total
|
|
|
179,371
|
|
100.0
|
|
|
26.4
|
|
|
|
232,105
|
|
95.0
|
|
|
41.8
|
|
|
Transition Services
|
|
|
-
|
|
-
|
|
|
-
|
|
|
|
12,369
|
|
5.0
|
|
|
(4.7
|
)
|
|
Consolidated total
|
|
$
|
179,371
|
|
100.0
|
%
|
|
26.4
|
%
|
|
$
|
244,474
|
|
100.0
|
%
|
|
39.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 28, 2009, revenue and gross margin by
reportable segments are as follows (in thousands, except percentages):
|
|
|
Three Months Ended
June 28, 2009
(Unaudited)
|
|
|
|
|
Business Segment
|
|
Revenues
|
|
Percentage
of Total
|
|
Gross
Margin
|
|
Power Management Devices
|
|
$
|
54,433
|
|
34.1
|
%
|
|
(1.5
|
)%
|
|
Energy-Saving Products
|
|
|
30,255
|
|
19.0
|
|
|
21.0
|
|
|
HiRel
|
|
|
37,527
|
|
23.5
|
|
|
49.5
|
|
|
Automotive Products
|
|
|
12,340
|
|
7.7
|
|
|
8.4
|
|
|
Enterprise Power
|
|
|
19,534
|
|
12.2
|
|
|
36.0
|
|
|
Ongoing customer segments total
|
|
|
154,089
|
|
96.6
|
|
|
20.9
|
|
|
Intellectual Property
|
|
|
2,748
|
|
1.7
|
|
|
100.0
|
|
|
Ongoing segments total
|
|
|
156,837
|
|
98.3
|
|
|
22.3
|
|
|
Transition Services
|
|
|
2,720
|
|
1.7
|
|
|
(63.7
|
)
|
|
Consolidated total
|
|
$
|
159,557
|
|
100.0
|
%
|
|
20.8
|
%
|
Source: International Rectifier Corporation
International Rectifier Corporation
Investors:
Chris Toth,
310.252.7731
Media:
Graham Robertson, 310.529.0321
|
|
