International Rectifier Posts Earnings
20 October 2000
International Rectifier Posts Record Earnings On 64% Revenue Growth, With Orders Up 78%
EL SEGUNDO, Calif.--Oct. 19, 2000--International Rectifier Corp. grew revenue 64 percent year-to-year and posted record earnings in its first fiscal quarter.Net income increased sharply year-to-year, to reach $42.1 million ($0.63 per share) on revenue of $249.4 million, compared to net income of $5.1 million ($0.10 per share) on revenue of $152.2 million in the prior-year quarter.
Revenue for analog power ICs, advanced-circuit devices, and power systems surged 142 percent year-to-year, and these proprietary products accounted for 30 percent of revenue in the period.
Orders soared by 78 percent year-to-year and 11 percent sequentially to set another record high. Distributors' sales of IR products rose to record highs, while their inventories remained flat with the preceding quarter.
Alex Lidow, chief executive officer, commented: "Shipments of our most advanced products fueled outstanding revenue growth and greater profitability in the quarter. Demand for products in our components group exceeded expectations, which enhances our prospects for a strong finish to our fiscal year.
"IR's concentration on the fastest-growing applications in information technology, motion control, and automotive is reinforcing our position as the leader in power management. A wide variety of industry leaders in our key target sectors continue to adopt power architectures built around International Rectifier technology. Orders for analog power ICs, advanced-circuit devices, and power systems more than tripled year-to-year."
Gross margin was 39.6 percent for the quarter, compared to 31.7 percent in the prior-year quarter and 38.5 percent in the immediately preceding quarter. The increase reflected the shift to more proprietary products, cost reductions, and higher royalties.
Royalties contributed $11.4 million in the quarter, compared to $11.1 million in the preceding and $7.4 million in the year-ago quarters. The year-over-year increase reflected new license agreements and higher shipments of products covered under existing license agreements.
International Rectifier continues to extend its strategic advantages. In recent months, the company introduced new technology and won new designs in high-growth communications and automotive applications, while major new programs incorporating IR technology and power architectures moved into production.
In the automotive sector, IR earned sole-source position on four electric steering programs, two 42-volt power distribution and integrated starter-alternator designs, and two fan-control programs.
Industry leaders in broadband networks and Internet infrastructure sharply ramped their shipment of DSL (digital subscriber line) systems and hubs & servers that incorporate benchmark power management technology from International Rectifier.
Lidow noted: "We are entering the December quarter with more than 80 percent of planned revenue already in our backlog. In light of stronger-than-expected demand, we are revising upwards our revenue outlook. We now expect to grow fiscal 2001 revenues by 40 to 45 percent, with gross margins averaging 45 to 50 percent on incremental sales."
INTERNATIONAL RECTIFIER CORP. AND SUBSIDIARIES
Unaudited Consolidated Statement of Operations
(In thousands except per share amounts)
Three Months Ended
Sept. 30,
2000 1999
Revenues $249,435 $152,239
Cost of sales 150,732 104,020
Gross profit 98,703 48,219
Selling & administrative 33,787 26,656
Research & development 14,951 10,596
Operating profit 49,965 10,967
Other income (expense):
Interest, net 5,891 (3,425)
Other, net 260 -
Income before income taxes 56,116 7,542
Provision for income taxes 14,029 2,413
Net income $ 42,087 $ 5,129
Net income per common share:
Basic $ 0.68 $ 0.10
Diluted $ 0.63 $ 0.10
Average common shares
outstanding - Basic 61,831 51,928
Average common shares and
potentially dilutive
securities outstanding - Diluted 66,661 53,096
-0-
INTERNATIONAL RECTIFIER CORP. AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands)
Sept. 30, June 30,
2000 2000
(Unaudited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $ 813,320 $ 254,336
Trade accounts receivable, net 190,661 180,349
Inventories 118,150 117,974
Deferred income taxes 22,535 21,953
Prepaid expenses and other receivables 29,428 17,011
Total current assets 1,174,094 591,623
Property, plant and equipment, net 405,120 390,787
Other assets 65,045 43,560
Total assets $ 1,644,259 $1,025,970
Liabilities and Stockholders' Equity
Current liabilities:
Bank loans $ 12,070 $ 12,089
Long-term debt, due within one year 1,836 1,984
Accounts payable 89,020 85,580
Accrued salaries, wages and
commissions 19,476 17,757
Other accrued expenses 46,792 32,750
Total current liabilities 169,194 150,160
Long-term debt, less current
maturities 553,703 4,589
Other long-term liabilities 7,042 8,486
Deferred income taxes 20,989 18,669
Stockholders' equity:
Common Stock 61,951 61,594
Capital contributed in excess of
par value of shares 635,850 627,118
Retained earnings 203,292 161,205
Accumulated other comprehensive loss (7,762) (5,851)
Total stockholders' equity 893,331 844,066
Total liabilities and
stockholders' equity $ 1,644,259 $1,025,970