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Supertex Reports Second Fiscal Quarter Results SUNNYVALE, CA--(MARKET WIRE)--Oct 21, 2008 -- Supertex, Inc. (NasdaqGS:SUPX - News) today reported
financial results for the second fiscal quarter ended September
27, 2008.
Net sales for the second fiscal quarter were $23,453,000,
a 3% increase
compared to the prior quarter of $22,751,000 and a 6% increase
compared to
$22,029,000 for the same quarter last year. On a GAAP basis,
net income in
the second fiscal quarter was $4,549,000, or $0.35 per diluted
share, as
compared with $4,440,000 or $0.34 per diluted share in the
prior fiscal
quarter, and $4,501,000 or $0.32 per diluted share in the
same fiscal
quarter of the prior fiscal year.
For the first six months ended September 27, 2008, net sales were $46,204,000 compared to $42,791,000 for the same period of the prior fiscal year, and on a GAAP basis, net income was $8,989,000, or $0.70 per diluted share, as compared with $8,974,000, or $0.64 per diluted share, in the same period of the prior fiscal year. Non-GAAP earnings per diluted share for the second fiscal quarter were $0.40, excluding pre-tax employee stock-based compensation of $676,000, compared with $0.39 in the prior quarter, excluding pre-tax employee-stock based compensation of $668,000, and $0.35 in the same quarter of the prior fiscal year, excluding pretax employee-stock based compensation of $504,000. For the six months ended September 27, 2008, non-GAAP net income per diluted share was $0.80, excluding pre-tax employee stock-based compensation of $1,344,000, as compared to $0.72 for the same period of the prior fiscal year, excluding pre-tax employee stock-based compensation of $1,160,000. "I am pleased to report a second quarter of sequential sales growth despite the weakening global economic conditions," commented Dr. Henry C. Pao, President and CEO. "We have benefited from our diverse markets. Medical product shipments continued to run at a record pace. Imaging product sales recovered from the prior quarter as inventories at hubs and distributors were reduced. Our industrial product shipments were very strong. However, LED and Telecom driver shipments declined, although we expect them to recover in the coming quarters." Dr. Pao added, "Gross margin increased to 57% from 56% in the prior quarter, and operating expense was flat sequentially. Our operating margin improved sequentially to 24% from 22%. Interest and other income, however, declined to $714,000 from the $975,000 earned in the prior fiscal quarter, as interest rates on our investments declined and averaged only 2.6% versus 3.4% in the prior quarter. Our tax rate increased to 28% from 25% sequentially. Our combined cash, short term and long term investments grew $4,651,000. With our solid financial position and continued positive cash flow, we decided to capitalize on this weakening global economic situation and as a result we have aggressively recruited and we continue to aggressively recruit engineering talent to support our record number of ongoing new product research and development projects. Across all our markets, customer activities designing our chips into their products have been very strong." Dr. Pao further commented, "We expect our sales may be down moderately in our third fiscal quarter primarily because of declining legacy EL driver IC demand and normal seasonal softness in medical ultrasound products." Forward-Looking Statements: The industry in which we compete is characterized by extreme rapid changes in technology and frequent new product introductions. We believe that our long-term growth will depend largely on our ability to continue to enhance existing products and to introduce new products and features that meet the continually changing requirements of our customers. All statements contained in this press release that are not historical facts are forward-looking statements. They are not guarantees of future performance or events. They are based upon current expectations, estimates, beliefs, and assumptions about the future, which may prove incorrect, and upon our goals and objectives, which may change. Often such statements can be identified by the use of the words such as "will," "intends," "expects," "plans," "believes," "anticipates" and "estimates." Examples of forward-looking statements include statements concerning our expected moderate sales decline in the third fiscal quarter primarily because of declining legacy EL driver IC demand and normal seasonal softness in medical ultrasound products; our expectation that LED and telecom driver shipments will recover in the coming quarters; and our continuing to recruit engineering talent. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They are not guarantees of future performance or events but rather involve a number of risks and uncertainties including, but not limited to, whether our customers experience the demand we anticipate for their products based in part upon their input and our order backlog, whether the designed performance of our devices satisfies our customers' requirements so that they continue to design our devices into their products, whether our devices perform to their design specification, whether competitors introduce devices at lower prices than our devices causing price erosion, whether we are successful in our engineering recruiting and R&D efforts, and whether we encounter production issues in device manufacturing or moving new products from engineering into production, as well as other risk factors detailed in our Form 8-K, 10-K, and 10-Q filings with the Securities and Exchange Commission. Due to these and other risks, our future actual results could differ materially from those discussed above. We undertake no obligation to publicly release updates or revisions to these statements that speak only as of this date. Conference Call Details The Company will host a conference call at 2:30 p.m. PDT (5:30 p.m. EDT) on October 21, 2008, following the earnings release. President and CEO, Dr. Henry C. Pao, VP, Marketing, Ahmed Masood and VP, Finance & CFO, Phil Kagel, will present an overview of the second fiscal quarter financial results, discuss current business conditions, and then respond to questions. The call is available live for any interested party by dialing 800-894-5910 (domestic) or 785-424-1052 (toll, international) before the scheduled start time and using "Supertex" as conference ID. A recorded replay will be available for 31 days immediately following the conference call until 11:59 P.M. EST, November 21, 2008 at 800-753-6121 (domestic) and 402-220-2676 (toll, international). About Supertex Supertex, Inc. is a publicly held mixed signal semiconductor manufacturer, focused in high voltage products for use in the telecommunication, networking systems, flat panel display, medical and industrial electronics industries. Supertex product, corporate and financial information is readily available at our website: http://www.supertex.com. For further information, contact Investor Relations at Supertex, Inc., 1235 Bordeaux Drive, Sunnyvale, California 94089, 408-222-8888 or visit our website at http://www.supertex.com. Use of Non-GAAP Financial Information To supplement our financial results presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP net income and diluted non-GAAP net income per share. We present such non-GAAP financial measures in reporting our financial results to provide investors with an additional tool to evaluate our operating results. Because these non-GAAP measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management uses each of the above non-GAAP financial measures internally to understand, manage and evaluate our business. Our management believes it is useful for us and for investors to review, as applicable, both GAAP information, which includes employee stock-based compensation expense, and the non-GAAP measures, which exclude this information, in order to assess the performance of our core continuing businesses and for planning and forecasting in future periods. Each of these non-GAAP measures are intended to provide investors with an understanding of our operational results and trends that more readily enable them to analyze our base financial and operating performance and facilitate period-to-period comparisons and analysis of operation trends. Our management believes each of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. Our GAAP cost of sales and operating expenses include employee stock-based compensation determined in accordance with FAS 123R - Accounting for Stock Based Compensation. Our non-GAAP financial measures reflect adjustments to exclude this employee stock-based compensation. We believe cost of sales excluding share-based compensation, R&D expense excluding share-based compensation, and SG&A expense excluding share-based compensation are useful information for investors because comparative differences in the corresponding GAAP measures for different periods may reflect factors such as a different stock price when equity awards were made and different equity award practices rather than changes in the operation of the business. Stock options are other equity compensation and are a key incentive we offer our employees. We believe they have contributed to the sales earned during the period and will contribute to our future sales generation. Employee stock-based compensation expenses will recur in future periods.
SUPERTEX, INC.
CONSOLIDATED BALANCE SHEET INFORMATION
(unaudited)
September 27, March 29,
2008 2008
------------- -------------
(in thousands)
ASSETS
Cash and cash equivalents $ 43,856 $ 17,902
Short term investments 6,981 6,827
Accounts receivable, net 13,625 13,197
Inventories, net 16,428 17,036
Deferred income taxes 9,401 9,401
Prepaid expenses and other current assets 1,770 3,647
------------- -------------
Total current assets 92,061 68,010
Long term investments, net 84,000 96,531
Property, plant and equipment, net 9,834 9,916
Other assets 376 373
Deferred income taxes 2,462 2,521
------------- -------------
TOTAL ASSETS $ 188,733 $ 177,351
============= =============
LIABILITIES
Trade accounts payable $ 3,904 $ 3,280
Accrued salaries, wages and employee benefits 11,969 12,146
Other accrued liabilities 1,538 1,741
Deferred revenue 4,544 4,349
Income taxes payable 91 -
------------- -------------
Total current liabilities 22,046 21,516
Income taxes payable, noncurrent 4,407 3,960
------------- -------------
Total liabilities 26,453 25,476
------------- -------------
SHAREHOLDERS' EQUITY
Common stock 57,715 54,968
Accumulated other comprehensive loss (5,400) (4,069)
Retained earnings 109,965 100,976
------------- -------------
Total shareholders' equity 162,280 151,875
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 188,733 $ 177,351
============= =============
Supplemental Balance Sheet Data:
Cash and cash equivalents $ 43,856 $ 17,902
Short term investments 6,981 6,827
Long term investments:
Available-for-sale auction rate
securities at par 89,400 100,600
------------- -------------
140,237 125,329
Net unrealized loss of available-for-sale
auction rate securities (5,400) (4,069)
------------- -------------
Total cash and cash equivalents and
investments, net $ 134,837 $ 121,260
============= =============
SUPERTEX, INC.
CONSOLIDATED INCOME STATEMENT INFORMATION
(unaudited)
Three Months Ended Six Months Ended
----------------------- -----------------------
(in thousands, except per share amounts)
September September September September
27, 2008 29, 2007 27, 2008 29, 2007
----------- ----------- ----------- -----------
Net sales $ 23,453 $ 22,029 $ 46,204 $ 42,791
Cost of sales(1) 10,164 9,020 20,164 17,096
----------- ----------- ----------- -----------
Gross profit 13,289 13,009 26,040 25,695
Research and development(1) 3,802 3,858 7,839 7,623
Selling, general and
administrative(1) 3,900 4,192 7,696 7,838
----------- ----------- ----------- -----------
Income from operations 5,587 4,959 10,505 10,234
Interest and other income,
net 714 1,587 1,689 3,094
----------- ----------- ----------- -----------
Income before income taxes 6,301 6,546 12,194 13,328
Provision for income taxes 1,752 2,045 3,205 4,354
----------- ----------- ----------- -----------
Net income $ 4,549 $ 4,501 $ 8,989 $ 8,974
=========== =========== =========== ===========
Net income per share:
Basic $ 0.35 $ 0.33 $ 0.70 $ 0.65
=========== =========== =========== ===========
Diluted $ 0.35 $ 0.32 $ 0.70 $ 0.64
=========== =========== =========== ===========
Shares used in per share
computation:
Basic 12,841 13,755 12,810 13,767
=========== =========== =========== ===========
Diluted 12,966 13,987 12,928 13,999
=========== =========== =========== ===========
(1)Includes amortization of employee stock-based
compensation as follows:
Cost of sales $ 141 $ 132 $ 245 $ 274
Research and
development $ 324 $ 189 $ 619 $ 465
Selling, general and
administrative $ 211 $ 183 $ 480 $ 421
SUPERTEX, INC.
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(unaudited)
Three Months Ended Six Months Ended
------------------------ ------------------------
(in thousands, except per share amounts)
September September September September
27, 2008 29, 2007 27, 2008 29, 2007
----------- ----------- ----------- -----------
GAAP net income $ 4,549 $ 4,501 $ 8,989 $ 8,974
=========== =========== =========== ===========
Adjustment for
stock-based
compensation included
in:
Cost of sales 141 132 245 274
Research and
development 324 189 619 465
Selling, general and
administrative 211 183 480 421
----------- ----------- ----------- -----------
Subtotal 676 504 1,344 1,160
Tax effect of
stock-based
compensation (22) (42) (44) (104)
----------- ----------- ----------- -----------
Non-GAAP net income
excluding
employee stock-based
compensation $ 5,203 $ 4,963 $ 10,289 $ 10,030
=========== =========== =========== ===========
Non-GAAP net income per
share:
Basic $ 0.41 $ 0.36 $ 0.80 $ 0.73
=========== =========== =========== ===========
Diluted $ 0.40 $ 0.35 $ 0.80 $ 0.72
=========== =========== =========== ===========
Shares used in per
share computation:
Basic 12,841 13,755 12,810 13,767
=========== =========== =========== ===========
Diluted 12,966 13,987 12,928 13,999
=========== =========== =========== ===========
SUPERTEX, INC.
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP INCOME PER SHARE
(unaudited)
Three Months Ended Six Months Ended
-------------------- --------------------
(in thousands, except per share amounts)
September September September September
27, 2008 29, 2007 27, 2008 29, 2007
--------- --------- --------- ---------
Shares used in per share
computation:
Diluted 12,966 13,987 12,928 13,999
========= ========= ========= =========
DILUTED:
GAAP net income per share $ 0.35 $ 0.32 $ 0.70 $ 0.64
========= ========= ========= =========
Adjustments to reconcile net
income to non-GAAP net income
per share:
Employee stock-based
compensation effects included
in:
Cost of sales 0.01 0.01 0.02 0.02
Research and development 0.02 0.01 0.05 0.04
Selling, general and
administrative 0.02 0.01 0.03 0.03
Provision for income taxes (0.00) (0.00) (0.00) (0.01)
--------- --------- --------- ---------
Non-GAAP net income per share
excluding employee
stock-based compensation $ 0.40 $ 0.35 $ 0.80 $ 0.72
========= ========= ========= =========Contact: Corporate Headquarters:
Dr. Henry C. Pao
President & CEO
408/222-8888
Source: Supertex
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