Supertex, Inc. (NASDAQ: SUPX) today reported financial results for
the third fiscal quarter ended January 1, 2011. Net sales for the
third fiscal quarter were $19,675,000, a 12% decrease compared to
the prior quarter of $22,359,000 and an 18% increase compared to
$16,735,000 in the same quarter last year. On a GAAP basis, net
income in the third fiscal quarter was $2,860,000, or $0.22 per
diluted share, as compared with $3,822,000 or $0.29 per diluted
share in the prior fiscal quarter, and $1,974,000 or $0.15 per
diluted share in the same quarter of the prior fiscal year.
For the first nine months ended January 1, 2011, net sales were
$65,189,000 compared to $46,165,000 for the same period of the
prior fiscal year or grew 41%, and on a GAAP basis, net income grew
172% to $10,790,000, or $0.83 per diluted share, as compared with
$3,962,000, or $0.31 per diluted share.
Non-GAAP earnings per diluted share for the third quarter of
fiscal 2011 were $0.28, excluding pre-tax employee stock-based
compensation of $795,000, compared with $0.35 in the prior quarter,
excluding pre-tax employee stock based-compensation of $818,000,
and $0.22 in the same quarter of the prior fiscal year, excluding
pretax employee stock-based compensation of $874,000. For the nine
months ended January 1, 2011, non-GAAP net income per diluted share
was $1.00, excluding pre-tax employee stock-based compensation of
$2,372,000, as compared to $0.49 for the same period of the prior
fiscal year, excluding pre-tax employee stock-based compensation of
$2,529,000.
"We experienced a seasonality dip in our medical products,
however we believe that this business will start to recover during
our fourth fiscal quarter as channel inventories clear and our
newly launched products start to ramp up production," stated Dr.
Henry C. Pao, President and CEO. "Our telecom product sales grew
significantly, while imaging product sales declined. At the end of
our third fiscal quarter, sales of our LED drivers for backlighting
LED TVs picked up. However, we anticipate a moderate decline in
their sales in the fourth quarter as our major LED TV customer
begins to supply a substantial portion of its requirements itself
due to lower cost. We expect some of the shortfall will be offset
by anticipated sales increases to other customers for LED TVs and
monitor applications. We believe that sales of LED drivers for
general lighting will continue to grow."
Dr. Pao continued, "During our third fiscal quarter we launched
eight new products for our targeted markets: the medical
ultrasound, LED lighting, and imaging markets, and we expect to
introduce an additional seven new products in our fourth fiscal
quarter, with many further additional new products scheduled for
introduction during the first half of fiscal 2012. Taking into
account these factors, we anticipate our overall fourth fiscal
quarter sales will be flat to down five percent sequentially before
quarterly sales resume growth during fiscal 2012.
"Gross margin for the third fiscal quarter was 53% compared to
56% last fiscal quarter due to reduced sales and unfavorable
product mix," continued Dr. Pao. "Due to the increase in inventory,
built for a higher sales plan, we reduced our wafer fab utilization
in the third fiscal quarter and will reduce it further through the
fourth fiscal quarter. We expect our fiscal fourth quarter gross
margin to be around 52%. Operating expenses were slightly lower
sequentially as we continue to control costs, while driving our
product development effort which has a record number of exciting
new projects. Our tax rate was 20% compared to 34% last quarter due
to the re-instatement of Federal R&D Tax Credits and statute of
limitations expiration on several uncertain tax positions. Fiscal
fourth quarter tax rate is projected to be around 29%. We generated
approximately $1.7 million in operating cash flow in the quarter,
extending our trend of consecutive positive cash flow quarters to
75. Subsequent to the end of the quarter we received cash
redemptions at par value on two of our student loan backed auction
rate securities totaling $16.4 million.
"I am pleased to announce that our Board has approved and
designated $60 million of our total cash, cash equivalents and
investments of over $170 million for a major stock repurchase
during the next twelve to twenty four months," stated Dr. Pao. "We
believe this repurchase to be the best near-term deployment of a
portion of our funds which have continued to accumulate each
quarter through operations and redemptions of our auction rate
securities. The Board accordingly increased our share repurchase
program from approximately 556,000 shares to 2,500,000 shares. The
amended repurchase program has no expiration date except when an
aggregate of 2,500,000 shares have been repurchased, either on the
open market or through private transactions."
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 our belief that the medical products business
will start to recover during our fourth fiscal quarter as channel
inventories clear and our newly launched products start to ramp up
production; our anticipation of a moderate sequential decline in
LED backlighting sales as our major LED TV customer begins to
supply a substantial portion of its requirements itself due to
lower cost offset in part by anticipated sales increases to other
customers for LED TVs and monitor applications; our expectation
that sales of LED drivers LED drivers for general lighting will
continue to grow; and our expectation that we will introduce an
additional seven new products in our fourth fiscal quarter; and our
expectation that for the fiscal fourth quarter sales will be flat
to down five percent (before increasing during fiscal 2012), gross
margin will be approximately 52% and our tax rate will be around
29% .
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 the engineering of new products,
whether we encounter production issues in device manufacturing or
moving new products from engineering into production, and whether
our fab equipment continues to operate at expected capacities
without need of replacement, 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. PST (5:30
p.m. EST) on January 25, 2011, following the earnings release.
President and CEO Dr. Henry C. Pao, VP, Marketing Hernan DeGuzman
and VP, Finance & CFO Phil Kagel will present an overview of
the third fiscal quarter financial results, discuss current
business conditions, and then respond to questions.
The call is available live for any interested party by dialing
800-862-9098 (domestic) or 785-424-1051 (toll, international)
before the scheduled start time and using "Supertex" as conference
ID. A recorded replay will be available for 30 days immediately
following the conference call until 11:59 p.m. EST, February 25,
2011 at 800-283-4216 (domestic) and 402-220-9033 (toll,
international).
About Supertex
Supertex, Inc. is a publicly held mixed signal semiconductor
manufacturer, focused in high voltage products for use in the
medical ultrasound imaging, LCD TV backlighting, LED general
lighting, telecommunications, printer, flat panel display,
industrial and consumer product 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 is intended to provide investors with an understanding of
our operational results and trends that more readily enables 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. 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 the form of equity compensation we
presently utilize and they 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)
January 1, April 3,
2011 2010
------------ ------------
(in thousands)
ASSETS
Cash and cash equivalents $ 24,754 $ 10,153
Short term investments 113,120 76,860
Trade accounts receivable, net 10,630 10,786
Inventories 20,064 15,450
Deferred income taxes 7,610 8,162
Prepaid income taxes 4,236 2,456
Prepaid expenses and other current assets 3,614 3,726
------------ ------------
Total current assets 184,028 127,593
Long term investments 31,800 65,000
Property, plant and equipment, net 5,950 6,791
Other assets 612 580
Deferred income taxes 3,821 5,254
------------ ------------
TOTAL ASSETS $ 226,211 $ 205,218
============ ============
LIABILITIES
Trade accounts payable $ 4,479 $ 3,748
Accrued salaries and employee benefits 11,606 11,430
Other accrued liabilities 803 1,167
Deferred revenue 3,825 3,962
Income taxes payable 2,819 15
------------ ------------
Total current liabilities 23,532 20,322
Income taxes payable, noncurrent 4,506 4,520
Other accrued liabilities, noncurrent 288 -
------------ ------------
Total liabilities 28,326 24,842
SHAREHOLDERS' EQUITY
Common stock 69,051 64,296
Accumulated other comprehensive loss (602) (2,566)
Retained earnings 129,436 118,646
------------ ------------
Total shareholders' equity 197,885 180,376
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 226,211 $ 205,218
============ ============
SUPERTEX, INC.
CONSOLIDATED INCOME STATEMENT INFORMATION
(unaudited)
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
(in thousands, except per share amounts)
January 1, December 26, January 1, December 26,
2011 2009 2011 2009
------------- ------------ ------------- -------------
Net sales $ 19,675 $ 16,735 $ 65,189 $ 46,165
Cost of sales(1) 9,341 8,717 29,121 23,616
------------- ------------ ------------- -------------
Gross profit 10,334 8,018 36,068 22,549
Research and
development(1) 3,692 3,757 10,823 11,366
Selling, general and
administrative(1) 3,501 3,183 10,673 9,131
------------- ------------ ------------- -------------
Income from
operations 3,141 1,078 14,572 2,052
Interest and other
income, net 445 505 1,079 2,144
------------- ------------ ------------- -------------
Income before
income taxes 3,586 1,583 15,651 4,196
Provision for
(benefit from)
income taxes 726 (391) 4,861 234
------------- ------------ ------------- -------------
Net income $ 2,860 $ 1,974 $ 10,790 $ 3,962
============= ============ ============= =============
Net income per share:
Basic $ 0.22 $ 0.15 $ 0.83 $ 0.31
============= ============ ============= =============
Diluted $ 0.22 $ 0.15 $ 0.83 $ 0.31
============= ============ ============= =============
Shares used in per
share computation:
Basic 13,036 12,921 12,995 12,902
============= ============ ============= =============
Diluted 13,079 13,005 13,054 12,985
============= ============ ============= =============
(1) Includes amortization of employee stock-based compensation as follows:
Cost of sales $ 172 $ 222 $ 501 $ 566
Research and
development $ 314 $ 286 $ 990 $ 1,017
Selling, general
and
administrative $ 309 $ 366 $ 881 $ 946
SUPERTEX, INC.
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP RESULTS
(unaudited)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
(in thousands, except per share amounts)
January 1, December 26, January 1, December 26,
2011 2009 2011 2009
------------ ------------ ------------ ------------
GAAP net income $ 2,860 $ 1,974 $ 10,790 $ 3,962
Adjustment for
stock-based
compensation
included in:
Cost of sales 172 222 501 566
Research and
development 314 286 990 1,017
Selling, general
and administrative 309 366 881 946
------------ ------------ ------------ ------------
Subtotal 795 874 2,372 2,529
Tax effect of
stock-based
compensation (10) (28) (69) (79)
------------ ------------ ------------ ------------
Non-GAAP net income
excluding employee
stock-based
compensation $ 3,645 $ 2,820 $ 13,093 $ 6,412
============ ============ ============ ============
Non-GAAP net income
per share:
Basic $ 0.28 $ 0.22 $ 1.01 $ 0.50
============ ============ ============ ============
Diluted $ 0.28 $ 0.22 $ 1.00 $ 0.49
============ ============ ============ ============
Shares used in per
share computation:
Basic 13,036 12,921 12,995 12,902
============ ============ ============ ============
Diluted 13,079 13,005 13,054 12,985
============ ============ ============ ============
SUPERTEX, INC.
SUPPLEMENTAL RECONCILIATIONS OF GAAP TO NON-GAAP INCOME PER SHARE
(unaudited)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
(in thousands, except per share amounts)
January 1, December 26, January 1, December 26,
2011 2009 2011 2009
------------ ------------ ------------ ------------
Shares used in per
share computation:
Diluted 13,079 13,005 13,054 12,985
============ ============ ============ ============
DILUTED:
GAAP net income
per share $ 0.22 $ 0.15 $ 0.83 $ 0.31
Adjustments to
reconcile net
income to
non-GAAP net
income per share:
Employee
stock-based
compensation
effects included
in:
Cost of sales 0.01 0.02 0.04 0.04
Research and
development 0.03 0.02 0.08 0.08
Selling, general
and administrative 0.02 0.03 0.06 0.07
Provision for
income taxes (0.00) (0.00) (0.01) (0.01)
------------ ------------ ------------ ------------
Non-GAAP net income
per share excluding
employee
stock-based
compensation $ 0.28 $ 0.22 $ 1.00 $ 0.49
============ ============ ============ ============
Corporate Headquarters: Dr. Henry C. Pao President & CEO
408/222-8888
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