<PAGE>
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 April 2, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-3698
SILICONIX INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 94-1527868
(State or other jurisdiction (I.R.S. Employer
of incorporation Identification No.)
or organization)
2201 Laurelwood Road, Santa Clara, California 95056
(Address of principal executive offices)
Registrant's telephone number including area code (408) 988-8000
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
-- --
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
-- --
Indicate the number of shares outstanding of each of the registrant's
classes of common stock:
Common stock, $0.01 par value -- 9,959,680 outstanding shares as of May
15, 1995.
Page 1 of 9
<PAGE>
SILICONIX INCORPORATED
TABLE OF CONTENTS TO FORM 10-Q
Part I. Financial Information Page No.
Item 1 Financial Statements (Unaudited)
Condensed consolidated statements of
operations for the three months
ended April 2, 1995 and
April 3, 1994 3
Condensed consolidated balance sheets as
of April 2, 1995 and December 31, 1994 4
Condensed consolidated statements of cash flows
for the three months ended April 2, 1995 and
April 3, 1994 5
Notes to condensed consolidated
financial statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-8
Part II. Other Information
Signature 9
Page 2 of 9
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SILICONIX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
(Dollars in thousands 3 Months Ended
except per share amounts)
April 2, April 3,
1995 1994
- ------------------------------------------------------------------------
<S> <C> <C>
Net sales $51,349 $42,470
Cost of sales 32,073 25,178
--------------------
Gross profit 19,276 17,292
Research and development 4,303 4,021
Selling, marketing and administration 11,488 10,946
--------------------
Operating income 3,485 2,325
Interest expense 646 391
Other (income) expense - net (192) 82
--------------------
Income before taxes 3,031 1,852
Income taxes 497 225
--------------------
Net income $2,534 $1,627
--------------------
--------------------
Per share amounts:
Net income $0.25 $0.16
--------------------
--------------------
Shares used to compute earnings per share 9,960 9,960
--------------------
--------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 3 of 9
<PAGE>
SILICONIX INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
April 2, December 31,
1995 1994
- ------------------------------------------------------------------------------
(000's omitted)
Assets
- ------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and equivalents $7,573 $10,743
Accounts receivable, less allowances 30,989 30,379
Accounts receivable from affiliates 6,831 5,312
Inventories 31,428 31,033
Other current assets 7,115 5,456
-----------------------
Total current assets 83,936 82,923
-----------------------
Property, plant and equipment, at cost:
Land 279 279
Buildings and improvements 34,882 34,633
Machinery and equipment 144,849 142,641
-----------------------
180,010 177,553
Less accumulated depreciation (111,122) (109,641)
-----------------------
Net property, plant and equipment 68,888 67,912
-----------------------
Other assets 4,952 4,200
-----------------------
Total assets $157,776 $155,035
-----------------------
-----------------------
Liabilities and Shareholders' Equity
- ------------------------------------------------------------------------------
Current liabilities:
Current portion of debt obligations $584 $612
Accounts payable 16,825 15,194
Accounts payable to affiliates 4,473 4,980
Accrued payroll and related compensation 6,365 7,752
Accrued liabilities 18,759 19,781
-----------------------
Total current liabilities 47,006 48,319
Long-term related party debt 34,570 34,570
Long-term debt, less current portion 6,500 6,264
-----------------------
Total liabilities 88,076 89,153
-----------------------
Shareholders' equity:
Common stock 100 100
Additional paid-in-capital 59,224 59,193
Retained earnings 9,871 7,337
Accumulated translation adjustments 505 (748)
-----------------------
Total shareholders' equity 69,700 65,882
-----------------------
Total liabilities and shareholders' equity $157,776 $155,035
-----------------------
-----------------------
<FN>
Note: The balance sheet at December 31, 1994 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 4 of 9
<PAGE>
SILICONIX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
3 Months Ended
April 2, April 3,
1995 1994
- ------------------------------------------------------------------------------
(000's omitted)
<S> <C> <C>
Cash flows from operating activities:
Net income $2,534 $1,627
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,009 2,859
Loss on disposal of property, plant and
equipment -- 12
Other non-cash expenses 236 3
Changes in:
Accounts receivable (1,988) 3,358
Inventories 276 (2,622)
Other current assets (1,719) 512
Accounts payable 990 (986)
Accrued liabilities (2,033) 1,396
---------------------
Net cash provided by operating activities 1,305 6,159
---------------------
Cash flows from investing activities:
Purchase of property, plant and equipment (3,772) (7,581)
Purchase of other assets (859) (1,103)
---------------------
Net cash used in investing activities (4,631) (8,684)
---------------------
Cash flows from financing activities:
Proceeds from sale of restricted common stock 31 39
Repayment of debt (28) (204)
---------------------
Net cash provided by (used) in financing activities 3 (165)
---------------------
Effect of exchange rate changes on
cash and equivalents 153 (163)
---------------------
Net decrease in cash
and equivalents (3,170) (2,853)
Cash and equivalents:
Beginning of period 10,743 8,609
---------------------
End of period $7,573 $5,756
---------------------
---------------------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
Page 5 of 9
<PAGE>
SILICONIX INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the management of the Company, the
consolidated condensed financial statements appearing herein contain all
adjustments (consisting only of normal recurring accruals) necessary for a fair
presentation of the results for, and as of the end of, the periods indicated
therein. These statements should be read in conjunction with the Company's
December 31, 1994 consolidated financial statements and notes thereto. The
results of operations for the first three months of 1995 are not necessarily
indicative of the results to be expected for the full year.
NOTE 2. INVENTORIES
The components of inventory consist of the following:
<TABLE>
<CAPTION>
April 2, December 31,
1995 1994
-------- ------------
(000's omitted)
<S> <C> <C>
Finished goods $ 4,170 $ 6,886
Work-in-process 20,546 20,625
Raw materials 6,712 3,522
------- -------
$31,428 $31,033
------- -------
------- -------
</TABLE>
NOTE 3. CONTINGENCIES
The Company is party to two environmental proceedings. The first involves
property that the Company vacated in 1972. The California Regional Water
Quality Board issued a cleanup and abatement order to both the Company and the
current owner of the property. The Company subsequently reached a settlement of
this matter with the current owner in which the current owner indemnifies the
Company against any liability that may arise out of any governmental agency
actions brought for environmental cleanup of the site, including liability
arising out of the current cleanup and abatement order. The second proceeding
involves the Company's current facility in Santa Clara. The Company is
currently engaged in certain remedial action.
In management's opinion, based on discussion with legal counsel and other
considerations, the ultimate resolution of the above-mentioned matters will not
have a material adverse effect on the Company's consolidated financial position
or results of operations.
The Company is engaged in discussions with various other parties regarding
patent licensing and cross patent licensing issues. In the opinion of
management, the outcome of these discussions will not have a material adverse
effect on the financial position or overall trends in the result of operations
of the Company.
Page 6 of 9
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales increased 21% in the first quarter of 1995 to $51.3 million, up
$8.9 million over the first quarter of 1994. Power MOSFETs and Power ICs
accounted for 66% of net sales (26% growth over the comparable period in 1994)
while integrated circuits and low power discretes experienced more modest sales
growth. From a geographic perspective, sales to customers in Europe increased
to $15.1 million, a 54% increase from the comparable period in 1994.
Additionally, the Company's commitment to the Asia-Pacific market was rewarded
in Japan, where sales improved 33% over the comparable period in 1994.
Siliconix's gross profit as a percentage of sales was 37.5% in the first
quarter of 1995 as compared to 40.7% in the first quarter of 1994. The gross
profit percentage for the first quarter of 1995 is consistent with the prior
three quarters of operations. The first quarter of 1994 was favorably impacted
by the mix of product shipments and unusually favorable factory production.
Research and development expenditures increased 7.0% in the first quarter
of 1995 to $4.3 million, up $.3 million over the first quarter of 1994. The
increase reflects the Company's continued focus on investing in technology,
package, and product development.
Selling, marketing, and administrative expenses, as a percentage of net
sales, has decreased from 25.8% in the first quarter of 1994 to 22.4% in the
comparable period in 1995. This improvement is the result of normalized
spending in the first quarter of 1995 as compared to the same period in 1994
which contained certain costs associated with the implementation of the
Company's worldwide information system.
Other income and expense for the first three months of 1994 includes a $.2
million loss related to the sale of the Company's United Kingdom Swansea
facility which was closed for operations in 1991.
Interest expense increased 65.2% in the first quarter of 1995 to $.6
million, up $.3 million over the first quarter of 1994. The increase is the
result of higher short-term market interest rates during the first quarter of
1995 as compared to the same period in 1994.
Income tax expense increased in the first quarter of 1995 to $.5 million,
up $.3 million over the first quarter of 1994. Tax expense for the first three
months of 1995 as compared to the first three months of 1994 increased as a
result of the reduction in net operating loss carryforwards available in 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash flows from operations were $1.3 million for the three-month period
ended April 2, 1995 as compared to $6.2 million in the comparable period of
1994. Cash and equivalents decreased by $3.2 million at the end of the first
three months of 1995 compared to December 31, 1994 due mainly to cash used by
investing activities being higher than cash provided by operations. 1995
operating cash flows are expected to be sufficient to fund operations,
investments, and research and development.
7 of 9
<PAGE>
Accounts receivable increased 5.9% from December 31, 1994 primarily as a
result of the increase in percentage of European sales in the first quarter of
1995 which changed the geographic mix of outstanding trade accounts receivable
balances. European customers customarily carry longer payment terms than
customers located in the U.S. or Asia-Pacific.
Capital expenditures were $3.8 million in the first three months of 1995.
These related mostly to additions for plant capacity expansion and regulatory
compliance. 1995 capital expenditures are expected to exceed the 1994 annual
level of $25.0 million.
Current liabilities decreased by 2.7% at April 2, 1995 as compared to
December 31, 1994. The decrease can be attributed to certain liabilities which
are paid only once a year, typically during the first quarter.
Page 8 of 9
<PAGE>
SIGNATURES
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.
SILICONIX INCORPORATED
Date: May 15, 1995 By: Juergen F. Biehn
----------------
Juergen F. Biehn
Vice President and
Chief Financial Officer
Page 9 of 9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> APR-02-1995
<CASH> 7,573
<SECURITIES> 0
<RECEIVABLES> 36,094
<ALLOWANCES> (5,105)
<INVENTORY> 31,428
<CURRENT-ASSETS> 83,936
<PP&E> 180,010
<DEPRECIATION> (111,122)
<TOTAL-ASSETS> 157,776
<CURRENT-LIABILITIES> 47,006
<BONDS> 0
<COMMON> 100
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 157,776
<SALES> 51,349
<TOTAL-REVENUES> 51,349
<CGS> 32,073
<TOTAL-COSTS> 15,791
<OTHER-EXPENSES> 57
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 646
<INCOME-PRETAX> 3,031
<INCOME-TAX> 497
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,534
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
