UNITED STATES
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 June 30, 2000
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934 (No Fee Required)
Commission File No. 0-12718
SUPERTEX, INC.
(Exact name of Registrant as specified in its Charter)
California 94-2328535
(State or other jurisdiction of (IRS Employer Identification #)
incorporation or organization)
1235 Bordeaux Drive
Sunnyvale, California 94089
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code: (408) 744-0100
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 July 24, 2000, 12,335,014 shares of the Registrant's common stock
were issued and outstanding.
Total number of pages: 10
<PAGE>
SUPERTEX, INC.
QUARTERLY REPORT - FORM 10Q
Table of Contents Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income ................... 3
Consolidated Balance Sheets ......................... 4
Consolidated Statements of Cash Flows ............... 5
Notes to Consolidated Financial Statements .......... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .................... 7
PART II- OTHER INFORMATION
Item 6. Exhibits, Financial Statement Schedule and Reports
on Form 8-K ............................................ 9
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three-months Ended,
June 30, June 30,
2000 1999
---- ----
<S> <C> <C>
Net sales $ 22,303 $ 16,297
Cost and expenses:
Cost of sales 13,389 10,741
Research and development 2,430 2,835
Selling, general and administrative 2,280 1,492
Total costs and expenses 18,099 15,068
Income from operations 4,204 1,229
Interest income 519 415
Other income (expense), net (28) (48)
Income before provision for income taxes 4,695 1,596
Provision for income taxes 1,596 527
Net income $ 3,099 $ 1,069
Net income per share:
Basic $ 0.25 $ 0.09
Diluted $ 0.24 $ 0.09
Shares used in per share computation:
Basic 12,276 12,082
Diluted 13,064 12,212
<FN>
See accompanying Notes to Unaudited Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
SUPERTEX, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousand)
<CAPTION>
June 30, 2000 Mar. 31, 2000
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,332 $ 22,584
Short-term investments 25,403 11,592
Trade accounts receivable,
net of allowances of $1,581 and $1,366 17,948 14,428
Other receivables 531 315
Inventories 14,909 15,083
Deferred income taxes 2,862 2,862
Prepaid expenses 261 440
------ ------
Total current assets 71,246 67,304
Property, plant and equipment, net 16,181 14,890
Long term investments 2,402 1,402
Intangibles assets, net 926 1,157
Deferred income taxes 1,870 1,870
------ ------
TOTAL ASSETS $ 92,625 $ 86,623
LIABILITIES
Current liabilities:
Trade accounts payable $ 9,040 $ 8,395
Accrued salaries, wages and
employee benefits 3,822 4,495
Income taxes payable 1,949 353
Other accrued liabilities 637 276
Deferred license revenue 475 --
Deferred revenue on shipments to distributors 899 835
------ ------
Total current liabilities 16,822 14,354
SHAREHOLDERS' EQUITY
Preferred stock, no par value - 10,000
shares authorized, None outstanding -- --
Common stock, no par value - 30,000
shares authorized; issued and
outstanding 13,064 and 12,132 shares 23,602 23,167
Retained earnings 52,201 49,102
Total shareholders' equity 75,803 72,269
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 92,625 $ 86,623
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<CAPTION>
Three Months Ended
June 30, 2000 June 30, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,099 $ 1,069
Non-cash adjustments to net income:
Depreciation and amortization 1,221 1,461
Provision for doubtful accounts and
sales returns 524 350
Provision for excess and obsolete inventories 188 297
Changes in operating assets and liabilities:
Accounts and other receivables (4,044) (2,028)
Inventories (14) (1,698)
Prepaid expenses and other assets (47) 167
Trade accounts payable and accrued expenses 333 1,573
Income taxes payable 1,596 519
Deferred license revenue 475 --
Deferred revenue on shipments to distributors 64 (133)
------ ------
Total adjustments 296 508
------ ------
Net cash provided by operating activities 3,395 1,577
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (2,271) (377)
Purchases of short term investments (25,404) (8,682)
Proceeds from maturities of short term investments 11,593 --
Purchases of long term investments (1,000) --
------ ------
Net cash used in investing activities (17,082) (9,059)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised 435 132
Repurchase of stock -- (404)
------ ------
Net cash used in financing activities 435 (272)
------ ------
NET DECREASE IN CASH AND CASH EQUIVALENTS (13,252) (7,754)
CASH AND CASH EQUIVALENTS:
Beginning of period 22,584 28,190
End of period $ 9,332 $ 20,436
<FN>
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1
In the opinion of management, the unaudited financial statements for the
three months ended June 30, 2000 and 1999 include all adjustments
(consisting of normal recurring adjustments) necessary for 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 fiscal year ended March 31, 2000, which were 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.
Note 2
<TABLE>
Inventories consisted of (in thousands):
<CAPTION>
June 30, 2000 March 31, 2000
<S> <C> <C>
Raw materials.......................... $ 1,493 $ 1,088
Work-in-process........................ 10,619 11,652
Finished goods......................... 2,797 2,343
--------- ---------
$ 14,909 $ 15,083
</TABLE>
Note 3
Net Income per Share: Basic earnings per share ("EPS") is computed as net
income divided by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could
occur from common shares issuable through stock options, warrants, and
other convertible securities. A reconciliation of the numerator and
denominator of basic and diluted earnings per share is provided as follows
(in thousands, except per share amounts).
<TABLE>
<CAPTION>
For Three-months Ended,
June 30,
2000 1999
<S> <C> <C>
BASIC:
Net income $ 3,099 $ 1,069
Weighted average shares outstanding
for the period 12,276 12,082
-------- --------
Net income per share $ 0.25 $ 0.09
-------- --------
DILUTED:
Net income $ 3,099 $ 1,069
Weighted average shares outstanding
for the period 12,276 12,082
Dilutive effect of stock options 788 130
Total 13,064 12,212
-------- --------
Net income per share $ 0.24 $ 0.09
-------- --------
</TABLE>
<PAGE>
Note 4
Long Term Investments: On June 21, 2000, the Company purchased 1,059,322.03
shares of Series A Preferred Stock of LightConnect, an optical MEMS startup,
for $1,000,000. The Company owns 12% of LightConnect's outstanding Series A
Preferred Stock shares. The Company has recorded its investment in
LightConnect as a long term investment using the cost method of accounting.
Note 5
Recent Accounting Pronouncements: In June 1998, the FASB issued Statement
of Financial Accounting Standards No. 133, ("SFAS No. 133"), "Accounting
for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
new standards of accounting and reporting for derivative instruments and
hedging activities. SFAS No. 133 requires that all derivatives be recognized
at fair value in the statement of financial position and that the
corresponding gains or losses be reported either in the statement of
operations or as a component of comprehensive income, depending on the type
of hedging relationship that exists. SFAS No. 133 is effective for fiscal
years beginning after June 15, 2000. Earlier application is allowed as of
the beginning of any quarter beginning after issuance. The Company does not
anticipate that the adoption of SFAS 133 will have a material impact on its
financial position or results of operations.
In March 2000, The Financial Accounting Standards Board ("FASB") issued
FIN No. 44 "Accounting for Certain Transactions Involving Stock Compensation
an interpretation of APB Opinion No. 25". This interpretation has
provisions that are effective on staggered dates, some of which began after
December 15, 1998 and others that become effective after June 30, 2000. The
adoption of this interpretation did not, and is not expected to have a
material impact on the financial statements.
In December, 1999, SAB 101 was issued which summarizes the SEC's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. In June, 2000 SAB 101B was issued to delay the
implementation of SAB 101 until the fourth quarter of fiscal year. The
Company is currently evaluating the impact SAB 101 will have on its
financial position and results of operations.
PART I - FINANCIAL INFORMATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Cautionary Statement Regarding Forward Looking Statements This 10-Q includes
forward-looking statements. These forward-looking statements are not
historical facts, and are based on current expectations, estimates, and
projections about our industry, our beliefs, our assumptions, and our goals
and objectives. Words such as "anticipates", "expects", "intends", "plans",
"believes", "seeks", and "estimates ", and variations of these words and
similar expressions, are intended to identify forward-looking statements.
An example of such a statement in this 10-Q is that the Company anticipates
available funds and expected cash generated from operations to be sufficient
to meet cash and working capital requirements through at least the next
twelve months. These statements are only predictions, are not guarantees of
future performance, and are subject to risks, uncertainties, and other
factors, some of which are beyond our control and are difficult to predict,
and could cause actual results to differ materially form those expressed or
forecasted in the forward-looking statements. These risks and uncertainties
include those described in "Risk Factors" under Item 7, "Management's'
Discussion and Analysis of Financial
<PAGE>
Condition and Results of Operation" in our Annual Report of Form 10-K for
the fiscal year ended March 31, 2000. Except as required by law, we
undertake no obligation to update any forward-looking statement, whether as
a result of new information, future events, or otherwise.
Results of Operations
Net Sales Net sales for the quarter ended June 30, 2000 were $22,303,000,
a 37% increase compared to $16,297,000 of the same quarter last year. The
increase in sales for the comparative three-month period is primarily due
to increased sales in the core products, consisting of proprietary products
for the telecommunication, imaging and medical electronics industries.
Approximately 39% of the Company's net sales for first fiscal quarter were
derived from international customers as compared to 35% for the same period
in the prior year. The increase in percentage of international sales is
primarily due to the increase in our non-foundry core business. All of the
Company's international sales were denominated in U.S.dollars.
Gross Profit As a percent of sales, the Company's gross margin for the
three- month period ended June 30, 2000 was 40%, compared with 34% for the
same period of the prior year. The improvement in gross margin is primarily
due to economies of scale in the fab operations.
Research and Development Research and development expenses decreased 14%
to $2,430,000 for the quarter ended June 30, 2000 as compared to $2,835,000
for the same quarter of the prior year. The decrease is primarily due to a
non-recurring payment made in the same period last fiscal year of $1,350,000
to Orbit Semiconductor, Inc. under a process development agreement for
assisting Supertex to accelerate the process transfer to the new fab.
Selling, General and Administrative Expenses for selling, general and
administrative were $2,280,000 or 10% of net sales for the quarter ended
June 30, 2000 as compared with $1,492,000 or 9% of net sales in the same
quarter of the prior year. The dollar increases in selling, general and
administrative expenses for the three months were primarily due to increase
in data processing software expenses and bad debt reserve corresponding to
higher net sales.
Interest and Other Income Interest and other income, net for the three-month
period ended June 30, 2000 was $491,000 as compared to $367,000 for the same
period of the prior year. The increase is primarily due to increased cash
available for investments.
Provision for Income Taxes The Company's effective tax rate for the
three-month ended June 30, 2000 was 34% compared to 33% for the same
period of the prior year.
Overview Total assets increased to $92,625,000 as of June 30, 2000, up
from $86,623,000 at the end of last fiscal year ended March 31, 2000. The
increase is due to favorable operating results.
Liquidity and Capital Resources On June 30, 2000, the Company had
$34,735,000 in cash, cash equivalents, and short-term investments, compared
with $34,176,000 on March 31, 2000. Cash flow from operating activities was
$3,395,000 consisting principally of net income of $3,099,000. During the
three-month period, $2,271,000 was used to purchase equipment and $1,000,000
was used for the purchase of Preferred A stock of LightConnect, an optical
MEMS startup. Cash was also generated from stock option exercises of
$435,000. The Company anticipates that available funds and expected cash to
be generated from operations will be sufficient to meet cash and working
capital requirements through at least the next twelve months.
<PAGE>
Year 2000 Issues.
We reviewed and tested our internal programs and noted no issues relating
to Year 2000. We have not experienced any problems with our computer
systems being unable to recognize appropriate dates related to Year 2000.
We are also not aware of any material problems with our customers or
suppliers. Accordingly, we do not anticipate incurring material expenses
or experiencing any material operational disruption as a result of Year
2000 issues.
PART II - OTHER INFORMATION
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No report on Form 8-K was filed during the quarter for which
this Form 10-Q is filed.
<PAGE>
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: August 11, 2000
By: /S/ Henry C. Pao
----------------
Henry C. Pao, Ph.D.
President
(Principal Executive
and Financial Officer)
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