SOURCE: Supertex

May 05, 2005 16:30 ET

Supertex Reports Fourth Fiscal Quarter and Fiscal Year-End Results

SUNNYVALE, CA -- (MARKET WIRE) -- May 5, 2005 -- Supertex, Inc. (NASDAQ: SUPX) reported that for the fourth fiscal quarter ended April 2, 2005, net sales decreased 13% to $11,843,000 from $13,590,000 for the same quarter in the prior fiscal year, and decreased 21% sequentially from the prior quarter of $14,925,000. Net income for the quarter increased 49% to $433,000 or $0.03 per share on a diluted basis from $290,000 or $0.02 per share for the same quarter of the prior fiscal year but decreased 81% sequentially compared to $2,250,000 or $0.17 per share for the prior quarter.

For the fiscal year ended April 2, 2005, net sales increased 10% to $56,558,000 from $51,394,000 in the prior year, while net income increased 199% to $6,459,000 from $2,160,000 in the prior year.

Dr. Henry Pao, President and CEO, commented, "Our fourth fiscal quarter sales came in well below our expectations, primarily because of an unexpected substantial push-out in our backlighting driver IC business by one of our major customers and because of our foundry business declining faster than anticipated. Based on our current backlog and customer forecasts, the backlighting IC business will recover in the first fiscal quarter and grow throughout the year. The foundry business is projected to remain at about the fourth quarter level. Gross margin for the quarter decreased approximately by 3.5% to 49.3% from the prior quarter, while sales decreased by 21%. Inventory was $12.6 million, an increase of approximately $733,000 from the prior quarter. The inventory build-up was primarily in our backlighting ICs, necessary to support customer backlog and forecasts. Cash flow from operating activities remained positive. R&D spending increased 22% from the prior quarter because several new product and new process technology development projects were ramped up to support customer needs. We expect R&D spending for the new fiscal year to stay at about the same rate as a percentage of sales as the prior year of 17%. Design win activities have been strong. We plan to introduce several exciting new products in our first fiscal quarter."

He added, "Our Sarbanes-Oxley related expenses, in particular for the Section 404 compliance work, skyrocketed to $510,000 in the fourth fiscal quarter, not including significant internal costs. We expect these expenses to slow down going forward. We are pleased that this quarter of transition is behind us. Customer order lead times continued to be short although our major customers have given us longer forecasts now. Our book to bill ratio is significantly above 1.1, giving us more confidence in projecting sequential quarterly top line growth in excess of 20% for the June quarter."

Conference Call Details

The company will host a conference call at 2:30 p.m. PDT (5:30 p.m. EDT) on May 05, 2005, following the earnings release. President and Chief Executive Officer, Dr. Henry C. Pao and Executive Vice President, Richard E. Siegel will present an overview of the fourth fiscal quarter and fiscal year-end financial results, discuss current business conditions and then respond to questions.

The call is available live to listen or ask questions by dialing 800-540-0559 (domestic) or 785-832-1508 (toll, international) before the scheduled start time and requesting to be connected to the Supertex Quarterly Earnings Release Call. A recorded replay will be available until 11:59 p.m., EDT, May 19, 2005, by dialing 800-934-7836 (domestic) or 402-220-6984 (toll, international).

About Supertex

Supertex, Inc. is a publicly held mixed signal semiconductor manufacturer, focused in high voltage interface products for use in the telecommunications, networking systems, flat panel displays, medical and industrial electronics industries. Supertex product, corporate and financial information is readily available at www.supertex.com.

For further information, contact Dr. Henry C. Pao at Supertex, Inc., 1235 Bordeaux Drive, Sunnyvale, California 94089, 408-222-8888 or visit our Website at http://www.supertex.com.

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 include that the fourth quarter of fiscal 2005 was one of transition which is behind us, that our revenue will grow sequentially in excess of 20% during the first quarter of fiscal 2006, that our research and development spending will continue at the same rate as a percentage of sales as the prior year, and that our Sarbanes-Oxley related expenses will slow down in future quarters, and our plan to introduce several new products during the quarter. 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, including products currently in the pre-production stage, which incorporate our products, whether competitors introduce products at lower prices than our products causing price erosion, whether we encounter manufacturing or design issues which impede our move of products from engineering into manufacturing, and whether we have indeed done most of the work to document and test our internal controls 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. These forward-looking statements are based on our goals and objectives and our assumptions about, and assessment of, the future and may or may not prove true. They speak only as to the date of this release, and we undertake no obligation to publicly release updates or revisions to these statements.

                           SUPERTEX, INC.
              CONSOLIDATED INCOME STATEMENT INFORMATION
                            (unaudited)

                             Three-months Ended        Fiscal Year Ended
                               (in thousands, except per share amounts)
                            April 2,     April 3,     April 2,     April 3,
                               2005         2004         2005         2004
                           --------     --------     --------     --------
Net sales                  $ 11,843     $ 13,590     $ 56,558     $ 51,394
Cost of sales                 6,002        8,423       27,545       30,938
                           --------     --------     --------     --------
   Gross profit               5,841        5,167       29,013       20,456
Research and development      2,538        2,646        9,780        9,570
Selling, general and
 administrative               3,183        2,617       11,583        9,760
                           --------     --------     --------     --------
    Income from operations      120          (96)       7,650        1,126
Interest and other
 income, net                    445          517        1,909        2,004
                           --------     --------     --------     --------
    Income before
     income taxes               565          421        9,559        3,130
Provision for income taxes      132          131        3,100          970
                           --------     --------     --------     --------
    Net income             $    433     $    290     $  6,459     $  2,160
                           ========     ========     ========     ========
Net income per share
    Basic                  $   0.03     $   0.02     $   0.50     $   0.17
                           ========     ========     ========     ========
    Diluted                $   0.03     $   0.02     $   0.49     $   0.17
                           ========     ========     ========     ========
Shares used in per
 share computation
    Basic                    13,071       12,848       12,985       12,758
                           ========     ========     ========     ========
    Diluted                  13,343       13,163       13,239       13,051
                           ========     ========     ========     ========



                           SUPERTEX, INC.
              CONSOLIDATED BALANCE SHEET INFORMATION
                            (unaudited)
                                             April 2,      April 3,
                                                2005          2004
                                                  (in thousands)
ASSETS
Cash and cash equivalents                    $  38,634     $  57,717
Short term investments                          49,783        18,407
Accounts receivable, net                         7,898         7,667
Inventories, net                                12,624        12,606
Deferred income taxes                            6,322         4,989
Other current assets                               917           642
                                             ---------     ---------
   Total current assets                        116,178       102,028
Property, plant and equipment                    7,992         9,731
Other assets                                        96            94
Deferred income taxes                            2,111           944
                                             ---------     ---------
TOTAL ASSETS                                 $ 126,377     $ 112,797
                                             =========     =========
LIABILITIES
Trade accounts payable                       $   3,280     $   2,354
Accrued salaries, wages and
 employee benefits                               8,720         7,449
Other accrued liabilities                          634           481
Deferred revenue                                 3,610         3,254
Income taxes payable                             3,038         1,485
                                             ---------     ---------
  Total current liabilities                     19,282        15,023
                                             ---------     ---------

SHAREHOLDERS' EQUITY
Common stock                                    35,343        32,134
Retained earnings                               71,752        65,640
                                             ---------     ---------
  Total shareholders' equity                   107,095        97,774
                                             ---------     ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 126,377     $ 112,797
                                             =========     =========

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