EL SEGUNDO, Calif. — (BUSINESS WIRE) — August 20, 2014 — International Rectifier Corporation (NYSE: IRF) today announced financial results for the fourth quarter (ended June 29, 2014) of its fiscal year 2014.
On August 20, 2014, International Rectifier Corporation entered into a definitive agreement with Infineon Technologies AG under which Infineon has agreed to acquire International Rectifier for $40 per share in an all-cash transaction valued at approximately $3.0 billion. In anticipation of this transaction which is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approval, International Rectifier will not conduct a fourth quarter results conference call nor issue financial guidance for the upcoming quarter. International Rectifier is also discontinuing its share repurchase program.
Revenue for the June quarter was $297.6 million, a 10.5% increase compared to $269.3 million in the prior quarter and a 7.6% increase from $276.5 million in the prior year quarter. GAAP net income for the fourth quarter was $12.9 million, or $0.18 per fully diluted share compared to GAAP net income of $19.1 million, or $0.26 per fully diluted share, in the prior quarter and GAAP net loss of $6.1 million, or $0.09 per fully diluted share in the prior year quarter.
Revenue for fiscal year 2014 was $1,106.6 million, a 13.3% increase from $977.0 million in the prior fiscal year. Net income for fiscal year 2014 was $58.7 million or $0.81 per fully diluted share compared with a net loss of $88.8 million or $1.28 per fully diluted share for fiscal year 2013.
“Fourth quarter revenue exceeded our expectations, increasing significantly as all of our business segments posted sequential growth,” stated President and Chief Executive Officer Oleg Khaykin. “In addition, we reduced inventory by about 5% bringing our inventory weeks to 15.6, the lowest level in four years and below our target level of 16 weeks. Our non-GAAP operating income increased to 8.2% of revenue in the fourth quarter and we increased our cash balance by $67.7 million.”
GAAP gross margin for the fourth quarter was 35.6% compared to 37.2% in the prior quarter and 30.0% in the prior year quarter. GAAP operating income for the fourth quarter was $20.7 million compared to operating income of $19.2 million in the prior quarter and operating income of $0.2 million in the prior year quarter.
Cash, cash equivalents and marketable investments increased $67.7 million and totaled $610.4 million at the end of the fourth quarter, including restricted cash of $1.4 million.
Cash provided by operating activities for the quarter was $70.3 million and free cash flow was $62.0 million.
Non-GAAP Results
Non-GAAP net income for the fourth quarter
was $21.9 million, or $0.30 per fully diluted share compared to non-GAAP
net income of $19.7 million, or $0.27 per fully diluted share in the
prior quarter and non-GAAP net loss of $1.2 million, or $0.02 per fully
diluted share in the prior year quarter.
Non-GAAP gross margin for the fourth quarter was 35.7% compared to non-GAAP gross margin of 36.3% in the prior quarter and non-GAAP gross margin of 30.2% in the prior year quarter. Non-GAAP operating income for the fourth quarter was $24.3 million compared to non-GAAP operating income of $20.1 million in the prior quarter and non-GAAP operating income of $4.5 million in the prior year quarter.
Non-GAAP net income for fiscal year 2014 was $70.2 million or $0.97 per fully diluted share compared with a non-GAAP net loss of $62.6 million or $0.90 per fully diluted share for fiscal year 2013.
The non-GAAP results the Company provides exclude the effects of accelerated depreciation, asset impairment, inventory write-offs associated with our El Segundo fab closure, restructuring costs, severance costs, impairment of goodwill, amortization of intangibles, the associated net tax effects of these items, and discrete tax provisions and benefits. The Company excludes any tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability.
A reconciliation of these non-GAAP measures to the Company’s reported net income (loss), gross margin (referred to as gross profit in attached schedules) and operating income (loss) in accordance with U.S. GAAP are set forth in the attached schedules below and on our web-site at www.investor.irf.com.
Segment Table Information/Customer Segments
The business
segment tables included with this release for the Company’s fiscal
quarters ended June 29, 2014, March 30, 2014, and June 30, 2013,
respectively, reconcile revenue and gross margin for the Company’s
segments to the consolidated total amounts of such measures for the
Company.
Annual Report on Form 10-K
The Company expects to file
its Annual Report on Form 10-K for the 2014 fiscal year with the
Securities and Exchange Commission by Thursday, August 21, 2014. This
financial report will be available for viewing and download at
http://investor.irf.com.
Conference Call Information: On August 20, 2014, International Rectifier Corporation entered into a definitive agreement with Infineon Technologies AG under which Infineon has agreed to acquire International Rectifier for $40 per share in an all-cash transaction valued at approximately $3.0 billion. In anticipation of this transaction which is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approvals, International Rectifier will not conduct a fourth quarter results conference call nor issue financial guidance for the upcoming quarter.
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”,
“outlook” 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, lower
than expected demand or greater than expected order cancellations
arising from a decline or volatility in general market and economic
conditions and the failure of the market to improve as anticipated;
reduced margins from lower than expected factory utilization, higher
than expected costs and customer shifts to lower margin products;
changes in the timing or amount of costs associated with, or disruptions
caused by, our restructuring initiatives; our ability to implement our
restructuring initiatives as planned and achieve the anticipated
benefits, which may be affected by, among other things: customer
requirements, changes in business conditions and/or operational needs,
retention of key employees, governmental regulations, delays and
increased costs; unexpected costs or delays in implementing our plans to
secure and qualify external manufacturing capacity for our products,
including the purchase and installation of additional manufacturing
equipment and the construction of our new wafer thinning manufacturing
facility in Singapore; 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; volatility or deterioration of capital
markets; the adverse impact of regulatory, investigative and legal
actions; 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 or natural disasters;
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; the effects of natural disasters; the risk that the
transaction with Infineon Technologies AG will not close or that the
closing may be delayed; the possibility that the conditions to the
closing of the transaction with Infineon Technologies AG may not be
satisfied; the risk that competing offers to the transaction with
Infineon Technologies AG will be made; the outcome of any legal
proceedings related to the transaction with Infineon Technologies AG;
the occurrence of any event, change or other circumstances that could
give rise to the termination of the definitive agreement entered into
with Infineon Technologies AG; general economic conditions; conditions
in the markets Infineon Technologies AG and International Rectifier are
engaged in; behavior of customers, suppliers and competitors (including
their reaction to the transaction); 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.
|
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES |
||||||||||||||||||||
|
CONSOLIDATED STATEMENT OF OPERATIONS |
||||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||
|
June 29, 2014 |
March 30, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||
| Revenues | $ | 297,587 | $ | 269,269 | $ | 276,453 | $ | 1,106,571 | $ | 977,035 | ||||||||||
| Cost of sales | 191,789 | 169,135 | 193,386 | 707,363 | 719,930 | |||||||||||||||
| Gross profit | 105,798 | 100,134 | 83,067 | 399,208 | 257,105 | |||||||||||||||
| Selling, general and administrative expense | 48,816 | 45,025 | 46,348 | 182,318 | 181,746 | |||||||||||||||
| Research and development expense | 33,179 | 32,710 | 32,643 | 130,848 | 127,093 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 1,555 | 1,605 | 1,630 | 6,420 | 6,653 | |||||||||||||||
| Asset impairment, restructuring and related charges | 1,597 | 1,624 | 2,209 | 5,638 | 16,996 | |||||||||||||||
|
Operating income (loss) |
20,651 | 19,170 | 237 | 73,984 | (75,383 | ) | ||||||||||||||
| Other expense, net | 251 | 451 | 421 | 2,974 | 1,390 | |||||||||||||||
| Interest (income) expense, net | (10 | ) | 28 | 33 | 24 | 57 | ||||||||||||||
| Income (loss) before income taxes | 20,410 | 18,691 | (217 | ) | 70,986 | (76,830 | ) | |||||||||||||
| Provision for (benefit from) income taxes | 7,461 | (449 | ) | 5,861 | 12,253 | 11,990 | ||||||||||||||
| Net income (loss) | $ | 12,949 | $ | 19,140 | $ | (6,078 | ) | $ | 58,733 | $ | (88,820 | ) | ||||||||
| Net income (loss) per common share: | ||||||||||||||||||||
| Basic | $ | 0.18 | $ | 0.27 | $ | (0.09 | ) | $ | 0.83 | $ | (1.28 | ) | ||||||||
| Diluted | $ | 0.18 | $ | 0.26 | $ | (0.09 | ) | $ | 0.81 | $ | (1.28 | ) | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 71,208 | 71,248 | 69,785 | 71,108 | 69,385 | |||||||||||||||
| Diluted | 72,874 | 72,728 | 69,785 | 72,549 | 69,385 | |||||||||||||||
| INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| June 29, 2014 | June 30, 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 588,922 | $ | 443,490 | ||||
| Restricted cash | 635 | 611 | ||||||
| Short-term investments | 20,114 | 11,056 | ||||||
| Trade accounts receivable, net of allowances of $352 for 2014 and $915 for 2013 | 161,723 | 137,762 | ||||||
| Inventories | 230,011 | 232,315 | ||||||
| Current deferred tax assets | 2,145 | 4,948 | ||||||
| Prepaid expenses and other receivables | 26,675 | 33,002 | ||||||
| Total current assets | 1,030,225 | 863,184 | ||||||
| Restricted cash | 739 | 738 | ||||||
| Property, plant and equipment, net | 391,765 | 423,338 | ||||||
| Goodwill | 52,149 | 52,149 | ||||||
| Acquisition-related intangible assets, net | 15,503 | 21,923 | ||||||
| Long-term deferred tax assets | 31,183 | 32,792 | ||||||
| Other assets | 43,976 | 59,088 | ||||||
| Total assets | $ | 1,565,540 | $ | 1,453,212 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 86,256 | $ | 89,312 | ||||
| Accrued income taxes | 2,946 | 949 | ||||||
| Accrued salaries, wages and commissions | 47,750 | 39,719 | ||||||
| Current deferred tax liabilities | 348 | — | ||||||
| Other accrued expenses | 72,968 | 78,414 | ||||||
| Total current liabilities | 210,268 | 208,394 | ||||||
| Long-term deferred tax liabilities | 7,817 | 8,970 | ||||||
| Other long-term liabilities | 19,809 | 24,530 | ||||||
| Total liabilities | 237,894 | 241,894 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred shares, $1 par value, authorized: 1,000,000; issued and outstanding: none in 2014 and 2013 | — | — | ||||||
| Common shares, $1 par value, authorized: 330,000,000; outstanding: 71,520,121 shares in 2014 and 70,399,081 shares in 2013 | 78,192 | 76,590 | ||||||
| Capital contributed in excess of par value | 1,097,665 | 1,067,841 | ||||||
| Treasury stock, at cost: 6,672,216 shares in 2014 and 6,191,082 shares in 2013 | (125,785 | ) | (113,175 | ) | ||||
| Retained earnings | 260,598 | 201,865 | ||||||
| Accumulated other comprehensive loss | 16,976 | (21,803 | ) | |||||
| Total stockholders’ equity | 1,327,646 | 1,211,318 | ||||||
| Total liabilities and stockholders’ equity | $ | 1,565,540 | $ | 1,453,212 | ||||
| INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||||||
|
June 29, 2014
|
June 30, 2013
|
June 29, 2014 | June 30, 2013 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 12,949 | $ | (6,078 | ) | $ | 58,733 | $ | (88,820 | ) | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 21,817 | 22,625 | 87,210 | 91,187 | ||||||||||||
| Amortization of acquisition-related intangible assets | 1,555 | 1,630 | 6,420 | 6,653 | ||||||||||||
| (Gain) loss on disposal of fixed assets | (444 | ) | 703 | (264 | ) | 5,036 | ||||||||||
| Impairment of long-lived assets | 80 | 1 | 80 | 2,792 | ||||||||||||
| Stock compensation expense | 6,467 | 5,146 | 26,494 | 21,560 | ||||||||||||
| Gain on sale of investments | — | — | (36 | ) | (8 | ) | ||||||||||
| Other-than-temporary impairment of investments | — | — | — | 350 | ||||||||||||
| Provision for (recovery of) bad debts | — | 4 | — | (58 | ) | |||||||||||
| Provision for inventory write-downs | 1,273 | 5,142 | 4,900 | 20,421 | ||||||||||||
| Loss on derivatives | 276 | 469 | 1,437 | 634 | ||||||||||||
| Deferred income taxes | 1,412 | 5,769 | 7,338 | 11,384 | ||||||||||||
| Tax benefit from stock-based awards | 219 | — | 219 | — | ||||||||||||
| Changes in operating assets and liabilities, net | 25,690 | 21,657 | (11,190 | ) | 65,046 | |||||||||||
| Other | (999 | ) | 697 | (1,255 | ) | 3,219 | ||||||||||
| Net cash provided by operating activities | 70,295 | 57,765 | 180,086 | 139,396 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Additions to property, plant and equipment | (8,275 | ) | (11,681 | ) | (44,111 | ) | (72,605 | ) | ||||||||
| Proceeds from sale of property, plant and equipment | 978 | — | 1,003 | 118 | ||||||||||||
| Sale of investments | — | — | 36 | 52,131 | ||||||||||||
| Maturities of investments | — | 4,000 | 11,000 | 25,500 | ||||||||||||
| Purchase of investments | — | — | — | (9,979 | ) | |||||||||||
| Release from restricted cash | 13 | 2 | 27 | 176 | ||||||||||||
| Net cash used in investing activities | (7,284 | ) | (7,679 | ) | (32,045 | ) | (4,659 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Proceeds from exercise of stock options | 1,508 | 11,132 | 14,146 | 15,474 | ||||||||||||
| Purchase of treasury stock | (10,012 | ) | — | (12,610 | ) | (5,210 | ) | |||||||||
| Net settlement of restricted stock units for tax withholdings | (8,273 | ) | (3,972 | ) | (9,433 | ) | (5,464 | ) | ||||||||
| Net cash (used in) provided by financing activities | (16,777 | ) | 7,160 | (7,897 | ) | 4,800 | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,400 | (750 | ) | 5,288 | (1,470 | ) | ||||||||||
| Net increase in cash and cash equivalents | 47,634 | 56,496 | 145,432 | 138,067 | ||||||||||||
| Cash and cash equivalents, beginning of period | 541,288 | 386,994 | 443,490 | 305,423 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 588,922 | $ | 443,490 | $ | 588,922 | $ | 443,490 | ||||||||
For the three months ended June 29, 2014, March 30, 2014, and June 30, 2013, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
| Three Months Ended | ||||||||||||||||||||||||||||||
| June 29, 2014 | March 30, 2014 | June 30, 2013 | ||||||||||||||||||||||||||||
| Business Segment | Revenues |
Percentage
|
Gross
|
Revenues |
Percentage
|
Gross
|
Revenues |
Percentage
|
Gross
|
|||||||||||||||||||||
| Power management devices | $ | 110,255 | 37.0 | % | 33.8 | % | $ | 96,868 | 36.0 | % | 30.9 | % | $ | 108,453 | 39.2 | % | 28.8 | % | ||||||||||||
| Energy saving products | 58,556 | 19.7 | 26.9 | 53,808 | 20.0 | 33.7 | 52,142 | 18.9 | 19.2 | |||||||||||||||||||||
| Automotive products | 38,918 | 13.1 | 26.3 | 37,901 | 14.1 | 28.4 | 36,337 | 13.1 | 25.1 | |||||||||||||||||||||
| Enterprise power | 36,446 | 12.2 | 39.5 | 32,057 | 11.9 | 45.3 | 29,355 | 10.6 | 30.1 | |||||||||||||||||||||
| HiRel | 53,091 | 17.8 | 52.5 | 48,323 | 17.9 | 54.9 | 49,802 | 18.0 | 47.3 | |||||||||||||||||||||
| Customer segments total | 297,266 | 99.9 | 35.5 | 268,957 | 99.9 | 37.1 | 276,089 | 99.9 | 30.0 | |||||||||||||||||||||
| Intellectual property | 321 | 0.1 | 100.0 | 312 | 0.1 | 100.0 | 364 | 0.1 | 100.0 | |||||||||||||||||||||
| Consolidated total | $ | 297,587 | 100.0 | % | 35.6 | % | $ | 269,269 | 100.0 | % | 37.2 | % | $ | 276,453 | 100.0 | % | 30.0 | % | ||||||||||||
For the fiscal years ended June 29, 2014 and June 30, 2013, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):
| Fiscal Year Ended | ||||||||||||||||||||
| June 29, 2014 | June 30, 2013 | |||||||||||||||||||
| Business Segment | Revenues |
Percentage
|
Gross
|
Revenues |
Percentage
|
Gross
|
||||||||||||||
| Power management devices | $ | 411,967 | 37.2 | % | 31.4 | % | $ | 367,762 | 37.6 | % | 21.7 | % | ||||||||
| Energy saving products | 209,450 | 18.9 | 31.1 | 176,386 | 18.1 | 15.3 | ||||||||||||||
| Automotive products | 149,646 | 13.5 | 29.5 | 124,695 | 12.8 | 17.7 | ||||||||||||||
| Enterprise power | 133,947 | 12.1 | 41.1 | 116,302 | 11.9 | 32.5 | ||||||||||||||
| HiRel | 200,412 | 18.1 | 52.0 | 188,831 | 19.3 | 46.7 | ||||||||||||||
| Customer segments total | 1,105,422 | 99.9 | 36.0 | 973,976 | 99.7 | 26.2 | ||||||||||||||
| Intellectual property | 1,149 | 0.1 | 100.0 | 3,059 | 0.3 | 78.4 | ||||||||||||||
| Consolidated total | $ | 1,106,571 | 100.0 | % | 36.1 | % | $ | 977,035 | 100.0 | % | 26.3 | % | ||||||||
For the three months ended June 29, 2014, March 30, 2014, and June 30, 2013, stock-based compensation was as follows (in thousands):
| Three Months Ended | |||||||||||
| June 29, 2014 | March 30, 2014 | June 30, 2013 | |||||||||
| Cost of sales | $ | 1,302 | $ | 1,330 | $ | 1,091 | |||||
| Selling, general and administrative expense | 3,260 | 3,233 | 2,455 | ||||||||
| Research and development expense | 1,905 | 1,975 | 1,600 | ||||||||
| Total stock-based compensation expense | $ | 6,467 | $ | 6,538 | $ | 5,146 | |||||
For the fiscal years ended June 29, 2014, and June 30, 2013, stock-based compensation was as follows (in thousands):
| Fiscal Year Ended | |||||||
| June 29, 2014 | June 30, 2013 | ||||||
| Cost of sales | $ | 5,242 | $ | 4,393 | |||
| Selling, general and administrative expense | 13,144 | 11,166 | |||||
| Research and development expense | 8,108 | 6,001 | |||||
| Total stock-based compensation expense | $ | 26,494 | $ | 21,560 | |||
INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES
NON-GAAP RESULTS
(In thousands, except per share and gross profit-percentage data)
Reconciliation of GAAP to Non-GAAP Gross Profit:
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||
| June 29, 2014 | March 30, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||||||
| GAAP Gross profit | $ | 105,798 | $ | 100,134 | $ | 83,067 | $ | 399,208 | $ | 257,105 | ||||||||||
| Adjustments to reconcile GAAP to Non-GAAP gross profit: | ||||||||||||||||||||
| Impairment of long-lived assets | — | — | — | — | 2,792 | |||||||||||||||
| Accelerated depreciation | 509 | 507 | 417 | 2,097 | 1,683 | |||||||||||||||
| Product litigation reserve release | — | (2,790 | ) | — | (2,790 | ) | — | |||||||||||||
| Non-GAAP gross profit | $ | 106,307 | $ | 97,851 | $ | 83,484 | $ | 398,515 | $ | 261,580 | ||||||||||
| Non-GAAP gross profit-percentage | 35.7 | % | 36.3 | % | 30.2 | % | 36.0 | % | 26.8 | % | ||||||||||
Reconciliation of GAAP to Non-GAAP Operating Income (Loss):
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||
| June 29, 2014 | March 30, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||||||
| GAAP Operating income (loss) | $ | 20,651 | $ | 19,170 | $ | 237 | $ | 73,984 | $ | (75,383 | ) | |||||||||
| Adjustments to reconcile GAAP to Non-GAAP operating loss: | ||||||||||||||||||||
| Impairment of long-lived assets | — | — | — | — | 2,792 | |||||||||||||||
| Accelerated depreciation | 509 | 507 | 417 | 2,097 | 1,683 | |||||||||||||||
| Product litigation reserve release | — | (2,790 | ) | — | (2,790 | ) | — | |||||||||||||
| Amortization of acquisition-related intangible assets | 1,555 | 1,605 | 1,630 | 6,420 | 6,653 | |||||||||||||||
| Asset impairment, restructuring and related charges | 1,597 | 1,624 | 2,209 | 5,638 | 16,996 | |||||||||||||||
| Non-GAAP operating income (loss) | $ | 24,312 | $ | 20,116 | $ | 4,493 | $ | 85,349 | $ | (47,259 | ) | |||||||||
| INTERNATIONAL RECTIFIER CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
| NON-GAAP RESULTS | ||||||||||||||||||||
| (In thousands, except per share and gross profit-percentage data) | ||||||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Net Income (Loss): | ||||||||||||||||||||
| Three Months Ended | Fiscal Year Ended | |||||||||||||||||||
| June 29, 2014 | March 30, 2014 | June 30, 2013 | June 29, 2014 | June 30, 2013 | ||||||||||||||||
| GAAP Net income (loss) | $ | 12,949 | $ | 19,140 | $ | (6,078 | ) | $ | 58,733 | $ | (88,820 | ) | ||||||||
| Adjustments to reconcile GAAP to Non-GAAP net income (loss): | ||||||||||||||||||||
| Impairment of long-lived assets | — | — | — | — | 2,792 | |||||||||||||||
| Accelerated depreciation | 509 | 507 | 417 | 2,097 | 1,683 | |||||||||||||||
| Product litigation reserve release | — | (2,790 | ) | — | (2,790 | ) | — | |||||||||||||
| Amortization of acquisition-related intangible assets | 1,555 | 1,605 | 1,630 | 6,420 | 6,653 | |||||||||||||||
| Asset impairment, restructuring and related charges | 1,597 | 1,624 | 2,209 | 5,638 | 16,996 | |||||||||||||||
| Tax expense (benefit) of discrete items and other tax adjustments | 5,319 | (373 | ) | 664 | 103 | (1,902 | ) | |||||||||||||
| Non-GAAP net income (loss) | $ | 21,929 | $ | 19,713 | $ | (1,158 | ) | $ | 70,201 | $ | (62,598 | ) | ||||||||
| GAAP net income (loss) per common share — basic | $ | 0.18 | $ | 0.27 | $ | (0.09 | ) | $ | 0.83 | $ | (1.28 | ) | ||||||||
| Non-GAAP adjustments per above | 0.13 | 0.01 | 0.07 | 0.16 | 0.38 | |||||||||||||||
| Non-GAAP net income (loss) per common share — basic | $ | 0.31 | $ | 0.28 | $ | (0.02 | ) | $ | 0.99 | $ | (0.90 | ) | ||||||||
| GAAP net income (loss) per common share — diluted | $ | 0.18 | $ | 0.26 | $ | (0.09 | ) | $ | 0.81 | $ | (1.28 | ) | ||||||||
| Non-GAAP adjustments per above | 0.12 | 0.01 | 0.07 | 0.16 | 0.38 | |||||||||||||||
| Non-GAAP net income (loss) per common share — diluted | $ | 0.30 | $ | 0.27 | $ | (0.02 | ) | $ | 0.97 | $ | (0.90 | ) | ||||||||
| Weighted average common shares outstanding — basic | 71,208 | 71,248 | 69,785 | 71,108 | 69,385 | |||||||||||||||
| Weighted average common shares outstanding — diluted | 72,874 | 72,728 | 69,785 | 72,549 | 69,385 | |||||||||||||||
We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance. These supplemental measures exclude, among other things, accelerated depreciation, inventory write-offs related to fab closures, severance, impairment of goodwill, charges related to the amortization of acquisition-related intangible assets, the impact of asset impairment, restructuring and other charges. We also exclude tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability in addition to tax adjustments related to non-GAAP operating income (loss) adjustments.
We use non-GAAP measures to evaluate the performance of our core businesses and to estimate future core performance. Since we find these measures to be useful, we believe that investors will benefit from seeing non-GAAP measures in addition to seeing our GAAP results. This information facilitates our internal comparisons to our historical operating results as well as to the operating results of our competitors.
Our management recognizes that items such as amortization of intangibles and asset impairment, restructuring and other charges can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of non-GAAP adjustments, investors should understand that the excluded items can be expenses and charges that impact the Company’s total cash balance. To gain a complete picture of all effects on the Company’s profit and loss from any and all events, management does (and investors should) consider only the GAAP income statement and the other financial measures. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit an important one, of the Company’s performance, and should not be relied upon by investors.
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different (and contain different inclusions and exclusions as compared to GAAP information) from the non-GAAP information provided by other companies and therefore are not being provided for the purpose of comparisons with other companies.
Contact:
International Rectifier Corporation
Investors:
Chris Toth,
310-252-7731
or
Media:
Sian Cummins, 310-252-7148