International Rectifier Orders Surge 62 Percent, Earnings Triple to 38 Cents
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Wednesday April 19, 8:59 am Eastern Time
Company Press Release
International Rectifier Orders Surge 62 Percent, Earnings Triple to 38Cents
EL SEGUNDO, Calif.--(BUSINESS WIRE)--April 19,
2000--International Rectifier Corporation (NYSE:IRF - news) today
reported March-quarter revenues of $198.0 million, versus $137.6
million in the prior-year quarter, up 44 percent year-to-year and 16
percent sequentially. Income before an extraordinary charge
associated with early repayment of the majority of the Company's
debt was $21.7 million ($0.38 per share), compared to year-earlier
income of $1.8 million ($0.04 per share) before non-recurring items.
After the extraordinary charge, net income was $16.9 million ($0.29
per share) versus year-ago net income of $4.0 million ($0.08 per
share) after non-recurring items. The current quarter includes $1.7
million of revenue from Zing Technologies, which IR acquired in early
March.
The Company reported that March-quarter orders rose by 62 percent
year-to-year and 28 percent sequentially (60 percent and 26 percent,
respectively, excluding Zing Technologies), to reach a record high for
the Company.
Alex Lidow, Chief Executive Officer, commented, ``Market leaders in
a wide range of technology sectors are adopting power architectures
built around our analog Power ICs and Advanced Circuit Devices.
Orders for these value-added products nearly doubled year-to-year
and grew 24 percent sequentially, while revenues grew 61 percent
year-to-year and 23 percent sequentially. Our Components business
revenues grew more than 38 percent year-to-year. Market demand
across IR's product line remains very strong, and results demonstrate
our positive earnings leverage.''
Royalties contributed $10.2 million in the quarter, compared to $7.7
million in the preceding and $7.4 million in the year-ago quarters.
The increase reflected a new license agreement and higher shipments
of products covered under existing license agreements.
Gross margin was 36.6 percent for the quarter, compared to 29.0
percent in the prior-year quarter and 34.0 percent in the
immediately-preceding quarter. The gross margin increase reflected
a mix shift to more proprietary products, higher royalties, and firm
pricing.
IR's proprietary products achieved major new design wins in
leading-edge applications. A major supplier of cell phones selected a
suite of IR's new Advanced Circuit Devices for its latest-generation
digital phones. The program is scheduled to begin production in
summer 2000 and expected to contribute significantly to IR's rising
penetration in this sector. Additionally, IR accelerated its growth in
notebook computers, as an industry leader designed in a set of
proprietary Advanced Circuit Devices and awarded IR the leading
share on two important new programs. IR also achieved a significant
new sole-source design win for next-generation network hardware
that offers broadband capabilities. The power management
architecture used in the network revolves around IR's analog Power
ICs, and the program is scheduled to begin production in the fall.
For the nine months ended March 31, 2000, IR reported income of
$39.2 million ($0.71 per share) before the extraordinary charge on
revenue of $521.3 million, compared to year-earlier income of $2.8
million (or $0.05 per share) before non-recurring items on revenue of
$397.9 million. Including the extraordinary charge, net income was
$34.4 million ($0.63 per share), compared to net income of $23.8
million ($0.46 per share) including non-recurring items in the
year-ago period.
Late in the quarter, IR successfully completed an offering of 9,250,000
shares of common stock, of which 8,850,000 were primary shares
that generated net proceeds of approximately $363 million. The
Company reduced its debt to approximately $20 million and plans to
use the balance of funds from the offering to ensure it has sufficient
capacity and the financial flexibility to pursue strategic opportunities.
The offering is estimated to be accretive to ongoing operations by about
$0.03 per share in fiscal 2000 and $0.05 per share in fiscal 2001.
Lidow noted, ``We exceeded plan in the March quarter and are
raising our sights going forward. We are now targeting record
per-share earnings in the June quarter on revenue growth of $25 to
$30 million. We expect to enter fiscal 2001 with a higher sales base
and to grow revenue between 30 and 35 percent, with continued
positive earnings leverage.''
International Rectifier is a world leader in power management
devices and systems that enable information technology and other end
products to improve functionality, speed, compactness, and portability.
IR's analog Power ICs, Advanced Circuit Devices, Power Systems,
and Components enable Internet hardware to gain speed and
reliability, allow portable electronics to run longer off a single charge,
improve automotive fuel efficiency, and cut energy consumption in
home appliances and industrial motors. International Rectifier is the
pioneer and market leader in the $3 billion power MOSFET industry,
and over 20 companies are licensed under its power MOSFET
patents. IR serves market leaders around the world, and more than
half its revenue comes from outside the United States.
The foregoing material includes some forward-looking statements
made pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We caution that such statements are
subject to a number of uncertainties, and actual results may differ
materially. Factors that could affect the Company's actual results
include the effectiveness of cost controls and cost reductions; the
accuracy of customers' forecasts; push-out of delivery dates; product
returns; market and sector conditions that affect our customers and
licensees; introduction, acceptance, and availability of new products;
the Company's mix of product shipments; availability of adequate
capacity; failure of suppliers and subcontractors to meet their delivery
commitments; unfavorable changes in industry and competitive
conditions; continued improvement in economic conditions in the
Company's markets around the world; the impact of export controls;
and other uncertainties disclosed in the Company's filings with the
Securities and Exchange Commission.
NOTE: A conference call for investors will begin today at 7:00 am
Pacific daylight time. Participants can join the call by dialing
212/271-4594 or by logging onto the Internet at irf.com,
vcall.com, or streetfusion.com at least 15
minutes ahead of the start time. A replay of the call will be available
through 9:00 am Pacific daylight time on Monday, April 24. To hear
the replay, phone 800/633-8284 (reservation No. 1451-3920) or use
the websites listed above.
International Rectifier Corporation and Subsidiaries
Unaudited Consolidated Statement of Operations
(In thousands except per share amounts)
3 Months Ended 9 Months Ended
March 31, March 31,
2000 1999 2000 1999
Revenues $ 197,959 $137,550 $ 521,296 $ 397,880
Cost of sales 125,530 97,669 342,446 285,636
Gross profit 72,429 39,881 178,850 112,244
Selling and administrative
expense 28,816 24,575 82,556 73,180
Research and development
expense 11,795 10,147 33,455 30,565
Restructuring charges -- 4,200 -- 16,200
Operating profit (loss) 31,818 959 62,839 (7,701)
Other income (expense):
Interest, net (2,138) (2,855) (9,458) (8,211)
Other, net 475 7,954 1,075 52,301
Income before income taxes
and extraordinary charge 30,155 6,058 54,456 36,389
Provision for income taxes 8,460 2,054 15,248 12,557
Income before extraordinary
charge 21,695 4,004 39,208 23,832
Extraordinary charge on
early repayment of debt,
net of income tax benefit
of $1,856 4,772 -- 4,772 --
Net income $ 16,923 $ 4,004 $ 34,436 $ 23,832
Income per common share
before extraordinary
charge:
Basic $ 0.40 $ 0.08 $ 0.75 $ 0.46
Diluted $ 0.38 $ 0.08 $ 0.71 $ 0.46
Net income per common
share:
Basic $ 0.31 $ 0.08 $ 0.65 $ 0.46
Diluted $ 0.29 $ 0.08 $ 0.63 $ 0.46
Average common shares
outstanding - Basic 53,808 51,681 52,585 51,576
Average common shares
and potentially dilutive
securities outstanding
- Diluted 57,742 51,802 54,977 51,671
The results for the nine months ended March 31, 1999, as noted
above do not reflect an adjustment due to the adoption of SOP 98-5.
This cumulative effect of accounting change, net of tax, of $26.2
million was recorded retroactively to the first fiscal quarter of 1999
as a one-time charge and was included in the Company's audited
financial statements for the year ended June 30, 1999 and the
Company's Form 10-K. The impact on operating profit for the three and
nine months ended March 31, 1999 was not significant.
International Rectifier Corporation and Subsidiaries
Consolidated Balance Sheet
(In thousands)
March 31, June 30,
2000 1999
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 203,353 $ 31,497
Short-term investments 5,000 8,900
Trade accounts receivable, net 173,368 121,659
Inventories 118,761 108,463
Deferred income taxes 14,564 16,078
Prepaid expenses and other receivables 19,355 19,677
Total current assets 534,401 306,274
Property, plant and equipment, net 385,053 380,504
Other assets 38,959 22,307
Total assets $ 958,413 $ 709,085
Liabilities and Stockholders' Equity
Current liabilities:
Bank loans $ 13,594 $ 14,996
Long-term debt, due within one year 1,864 8,047
Accounts payable 69,076 64,809
Accrued salaries, wages,
and commissions 19,569 19,546
Other accrued expenses 38,667 33,234
Total current liabilities 142,770 140,632
Long-term debt, less current
maturities 5,276 158,418
Other long-term liabilities 6,315 7,142
Deferred income taxes 5,103 6,619
Stockholders' equity:
Common stock 62,716 51,781
Capital contributed in
excess of par value 616,458 257,746
Retained earnings 127,304 92,868
Accumulated other comprehensive loss (7,529) (6,121)
Total stockholders' equity 798,949 396,274
Total liabilities and
stockholders' equity $ 958,413 $ 709,085
Contact:
International Rectifier Corporation
Shelley Wagers, 310/726-8512
irf.com
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