SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended December 31, 1995
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 0-12718
SUPERTEX, INC.
(Registrant)
Incorporated in the State of California
I.R.S. Employer Identification Number 94-2328535
1235 Bordeaux Drive, Sunnyvale, California 94089
(Address of Principal Executive Offices)
Telephone: (408) 744-0100
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to
such filing requirements for the past 90 days.
Yes __x__ No ____
As of January 11, 1996, 11,885,571 shares of the Registrant's common stock
were issued and outstanding.
Total number of pages: 9
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $ 11,118 $ 8,180 $ 30,634 $ 23,064
Costs and expenses:
Costs of sales 5,718 4,167 15,821 11,607
Research and development 1,456 1,143 4,059 3,234
Selling, general and administrative 1,471 1,327 4,165 3,840
Total costs and expenses 8,645 6,637 24,045 18,681
Income from operations 2,473 1,543 6,589 4,383
Other income:
Interest income 293 227 855 563
Other income, net 25 13 109 36
Income before provision
for income taxes 2,791 1,783 7,553 4,982
Provision for income taxes 865 481 2,342 1,345
Net income $ 1,926 $ 1,302 $ 5,211 $ 3,637
Net income per share $ 0.16 $ 0.11 $ 0.42 $ 0.31
Shares used in per share computation 12,274 12,084 12,275 11,921
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
SUPERTEX, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<CAPTION>
Dec. 31, 1995 Mar. 31, 1995
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,171 $ 4,437
Short term investments 18,282 15,019
Trade accounts receivable,
net of allowances of $674 and $487 6,756 5,800
Other accounts receivable 149 352
Inventories 7,112 6,637
Deferred income taxes 1,455 1,455
Prepaid expenses 246 169
Total current assets 36,171 33,869
Property and equipment, net 6,291 3,441
TOTAL ASSETS $ 42,462 $ 37,310
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C> <C>
Current liabilities:
Trade accounts payable $ 2,585 $ 2,762
Accrued salaries, wages and employee benefits 1,668 1,409
Income taxes payable 979 1,014
Other accrued liabilities 486 467
Deferred income on shipments to distributors 723 494
Total current liabilities 6,441 6,146
SHAREHOLDERS' EQUITY
Preferred stock, no par value -
10,000,000 shares authorized; none outstanding -- --
Common stock, no par value -
30,000,000 shares authorized; issued and
outstanding 11,884,071 and 11,893,411 18,235 18,173
Retained earnings 17,786 12,991
Total shareholders' equity 36,021 31,164
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 42,462 $ 37,310
<FN>
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<CAPTION>
Nine Months Ended
Dec. 31, 1995 Dec. 31, 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,211 $ 3,637
Non-cash adjustments to net income:
Depreciation and amortization 1,090 785
Provision for doubtful accounts and sales returns 673 630
Provision for excess and obsolete inventories 245 (320)
Loss on disposal of assets 8 6
Changes in operating assets and liabilities:
Trade and other accounts receivable (1,426) (1,762)
Inventories (720) (255)
Prepaid expenses (77) (6)
Trade accounts payable and accrued expenses 101 39
Income taxes payable (35) 9
Deferred income on shipments to distributors 229 (9)
Total adjustments 88 (883)
Net cash provided by operating activities 5,299 2,754
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (3,948) (1,288)
Purchases of short term investments (39,343) (24,000)
Proceeds from maturities of short term investments 36,080 14,000
Net cash used in investing activities (7,211) (11,288)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised 147 205
Stock repurchased (501) --
Net cash provided by (used in) financing activities (354) 205
NET DECREASE IN CASH
AND CASH EQUIVALENTS (2,266) (8,329)
CASH AND CASH EQUIVALENTS
Beginning of period 4,437 17,416
End of period $ 2,171 $ 9,087
<FN>
See accompanying notes.
</TABLE>
<PAGE>
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
In the opinion of management, the unaudited financial statements for the
three and nine months ended December 31, 1994 and 1995 include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation of financial condition and results of operations for those
periods in accordance with generally accepted accounting principles.
The year-end condensed balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. These financial statements should be read
in conjunction with the audited financial statements of Supertex, Inc. for
the year ended March 31, 1995, which are included in the Annual Report on
Form 10-K (File Number 0-12718).
Interim results are not necessarily indicative of results for the full fiscal
year.
Inventories consisted of (in thousands):
Dec. 31, 1995 Mar. 31, 1995
(unaudited)
Finished goods $ 1,447 $ 901
Work-in-process 4,205 4,699
Raw materials 1,460 1,037
$ 7,112 $ 6,637
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation," which establishes a fair-value based method of
accounting for stock-based compensation. The Company currently follows the
requirements of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." The Company plans to adopt the disclosure
provisions of SFAS 123 in fiscal 1997.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
CERTAIN FACTORS
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Actual results could differ materially from those projected in
the forward-looking statements as a result of the risk factors set forth below
and elsewhere in this report. The industry in which the Company competes is
characterized by extreme rapid changes in technology and frequent new product
introductions. The Company believes that its long-term growth depend largely
on its ability to continue to enhance existing products and to introduce new
products and features that meet the continually changing requirements of
customers. While the Company has invested heavily in new products and
processes, there can be no assurance that it can continue to introduce new
products and features on a timely basis or that certain of its products and
processes will not be rendered noncompetitive or obsolete by its competitors.
RESULTS OF OPERATIONS:
NET SALES
Net sales for the third quarter ended December 31, 1995 increased 36% to
$11,118,000 from $8,180,000 for the same quarter of last fiscal year. Net
sales for the nine months ended December 31, 1995 increased 33% to
$30,634,000 from $23,064,000 for the same period of the last fiscal year. All
of the Company's targeted markets showed continued strength and have helped
the Company achieve record financial results. Approximately 43% of the
Company's sales were to international customers during the nine months ended
December 31, 1995.
GROSS MARGIN
Gross margin for the third quarter of fiscal 1996 was 49% of net sales, the
same as the preceding year. Gross margin for the nine months ended December 31,
1995 was 48%, a decrease from 50% for the same period of last fiscal year.
Gross margin is expected to be relatively stable from period to period, with
small variations from one period to another as slight product mix changes occur.
RESEARCH AND DEVELOPMENT
As a percentage of net sales, research and development expenses were 13% for
the three and nine months ended December 31, 1995, compared with 14% for the
same three and nine month periods of last fiscal year. Dollar expenditures in
this category increase moderately from period to period, as the Company develops
more new products each year. The Company intends to continue to invest heavily
in its new product and process development efforts.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative (SG&A) expenses for the third quarter
ended December 31, 1995 were 13% of net sales, a decrease from 16% for the
same period of last fiscal year. SG&A expenses for the nine months ended
December 31, 1995 were 14% of net sales, compared with 17% for the same period
of last fiscal year. The Company continued to benefit from economies of scale
as dollar expenditures in this category increased by a smaller percentage than
the percentage increase in net sales.
INTEREST AND OTHER INCOME
Interest and other income for the third quarter of fiscal 1996 was $318,000, an
increase of 33% from $240,000 for the same period of last fiscal year. Interest
and other income for the nine months ended December 31, 1995 increased 61% to
$964,000 from $599,000 for the same period of last fiscal year. Increased funds
available for investments and higher interest rates for short-term investments
accounted for this growth.
PROVISION FOR INCOME TAXES
The Company's effective tax rate for the three and nine months ended December
31, 1995 was 31%, an increase from 27% for the same periods of last fiscal year.
The Company expects that the effective tax rate will increase in fiscal 1997.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1995, the Company had a total of $20,453,000 in cash, cash
equivalents and short term investments compared to $19,456,000 at March 31,
1995. Cash provided by operating activities for the nine months ended December
31, 1995 was $5,299,000. The increase was primarily due to net income of
$5,211,000 for the nine months ended December 31, 1995 offset by increases in
accounts receivable and inventory. Cash used in investing activities during
the nine months ended December 31, 1995 was $7,211,000 new corporate
headquarters. Management believes its current cash, cash equivalents and
short-term investments will be adequate to meet anticipated operating needs
for the next 12 months. Capital expenditures for the next twelve months are
expected to be higher than those for the prior twelve-month period because
capacity expansion is being planned.
RECENT ACCOUNTING PRONOUNCEMENTS
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for
Stock-Based Compensation," which establishes a fair-value based method of
accounting for stock-based compensation. The Company currently follows the
requirements of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." The Company plans to adopt the disclosure
provisions of SFAS 123 in fiscal 1997.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Statement Regarding Computation of Net Income per Share
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUPERTEX, INC.
(Registrant)
Date: January 29, 1996
By: /s/ Henry C. Pao
Dr. Henry C. Pao, President
(Principal Executive and Financial Officer)
<PAGE>
Item 6 (a) Exhibit 11.1
<TABLE>
Statement Regarding Computation of Net Income per Share
(unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
Dec. 31, Dec 31, Dec. 31, Dec 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PRIMARY
Weighted average shares outstanding 11,891 11,771 11,897 11,741
Weighted average common stock equivalents 383 313 378 180
Shares used in per share computation 12,274 12,084 12,275 11,921
Net income $ 1,926 $ 1,302 $ 5,211 $ 3,637
Net income per share $ 0.16 $ 0.11 $ 0.42 $ 0.31
FULLY DILUTED
Weighted average shares outstanding 11,891 11,771 11,897 11,741
Weighted average common stock equivalents 399 427 397 244
Shares used in per share computation 12,290 12,198 12,294 11,985
Net income $ 1,926 $ 1,302 $ 5,211 $ 3,637
Net income per share $ 0.16 $ 0.11 $ 0.42 $ 0.30
<FN>
Net income per share is presented under the primary basis as the effect of
dilution under the fully diluted basis is not material.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-30-1996
<PERIOD-START> APR-02-1995
<PERIOD-END> DEC-31-1995
<CASH> 2,171
<SECURITIES> 0
<RECEIVABLES> 7,430
<ALLOWANCES> 674
<INVENTORY> 7,112
<CURRENT-ASSETS> 36,171
<PP&E> 17,522
<DEPRECIATION> 11,231
<TOTAL-ASSETS> 42,462
<CURRENT-LIABILITIES> 6,441
<BONDS> 0
<COMMON> 18,235
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 42,462
<SALES> 30,634
<TOTAL-REVENUES> 30,634
<CGS> 15,821
<TOTAL-COSTS> 15,821
<OTHER-EXPENSES> 4,059<F1>
<LOSS-PROVISION> 38
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,553
<INCOME-TAX> 2,342
<INCOME-CONTINUING> 5,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,211
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
<FN>
<F1> Research and Development Expenses
</TABLE>
