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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
(x) Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee Required) For the Fiscal Year Ended
March 31, 2000
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
and Exchange Act of 1934 For the transition period from _______
to ________
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 No.)
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 ( )
The aggregate market value of the voting stock held by non- affiliates of
the registrant as of May 15, 2000, was $287,513,000 based on the closing
price reported for such date. Shares of common stock held by officers,
directors and other persons who may be deemed "affiliates" of the Registrant
have been excluded from this computation. This determination of affiliate
status is not necessarily a conclusive determination for other purposes. The
number of shares outstanding of the Registrant's common stock as of
May 15, 2000, were 12,261,724.
Documents Incorporated by Reference: Part III incorporates by reference
portions of the Company's definitive proxy statement for the Annual Meeting
of Shareholders to be held on August 18, 2000 (the "Proxy Statement").
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K.
Exhibit Index is on Page 32
Total number of pages is 34
(BLANK PAGE)
SUPERTEX, INC.
ANNUAL REPORT - FORM 10K
Table of Contents
Page No.
PART I
Item 1.Business............................................. 4
Item 2.Properties........................................... 8
Item 3.Legal Proceedings.................................... 9
Item 4.Submission of Matters to a Vote of Security Holders.. 9
PART II
Item 5.Market for Registrant's Common Equity and Related
Shareholder Matters.................................. 9
Item 6.Selected Consolidated Financial Data................. 9
Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations..................10
Item 7A.Quantitative and Qualitative Disclosure about Market
Risk.................................................15
Item 8.Financial Statements and Supplementary Data..........15
Item 9.Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure..................15
PART III
Item 10.Directors and Executive Officers of the Registrant..15
Item 11.Executive Compensation..............................16
Item 12.Security Ownership of Certain Beneficial Owners and
Management..........................................16
Item 13.Certain Relationships and Related Transactions......16
PART IV
Item 14.Exhibits, Financial Statement Schedule and Reports
on Form 8-K.........................................16
Signatures...................................................17
PART I
Item 1. Business
Supertex, Inc. ("Supertex" or the "Company") is a technology-based
producer of high voltage analog and mixed signal semiconductor
components. It designs, develops, manufactures, and markets
integrated circuits utilizing state-of-the-art high voltage DMOS,
HVCMOS and HVBiCMOS analog and mixed signal technologies. With
respect to its DMOS transistor products, the Company has maintained
an established position in key products for telecommunication and
automatic test equipment industries. Supertex has been an industry
leader in high voltage integrated circuits (HVCMOS AND HVBiCMOS),
which take advantage of the best features of CMOS, bipolar, and DMOS
technologies and integrate them into the same chip. They are used
by the flat panel display, printer, medical ultrasound imaging,
telephone, telecommunications and instrumentation industries.
The Company markets its products through direct sales personnel,
independent sales representatives and distributors in the United
States and abroad, primarily to electronic equipment manufacturers.
The Company was incorporated in California in October 1975 and
conducted an initial public offering of its Common Stock in December
1983. Its executive offices are located at 1235 Bordeaux Drive,
Sunnyvale, California 94089, and its principal manufacturing
facilities are located at 1225/1231 Bordeaux Drive, Sunnyvale,
California 94089 and at 71 Vista Montana, San Jose, California
95134. Supertex also maintains four direct field offices located
in: (1) New York; (2) Texas; (3) The United Kingdom; and (4)
Germany. The telephone number of its headquarters is (408) 744-
0100. The Company's mailing address is 1235 Bordeaux Drive, P.O.Box
3607, Sunnyvale, California 94088-3607.
Products
Supertex offers semiconductor products that interface between the
low voltage computer logic signal world and the high voltage
requirements of the real analog world. Most of our products use
mixed signal technologies. We supply standard and custom interface
products primarily for the following three market groups:
The Telecommunications Group consists of interface products used
in telephone handsets, solid state relays, modems, fax, ISDN,
networking, PABX, and PCMCIA cards, as well as diagnostic,
curbside, set-top and central office equipment. In addition,
they are used in military radio frequency and microwave
communication applications.
The Imaging Group consists of interface products for Flat Panel
Displays and Non-impact Printers and Plotters. The flat panel
display product family is sold to customers using Electro-
Luminescent (EL), Plasma, Vacuum Fluorescent, Plasma- addressed
LCD, Ferro-electric LCD, and Field Emission Display (FED)
technologies. There is also a family of products for driving EL
panels to back-light displays in hand-held instruments, such as
cellular phones, PDAs, pagers, HPCs, and meters. The printer
product family is used in ink-jet and electrostatic types of
printers and plotters, which are mostly high end products, with
full color capability, high resolution and high speed output.
The Medical Electronics Group consists of products primarily for
ultrasound diagnostic imaging equipment as well as selected
portable instrumentation applications.
Supertex has been a leading provider of products to these specific
markets, therefore we have been able to work very closely with key
customers to define new products by determining future market needs.
Such close collaboration has produced a wide range of leading edge
new products for Supertex and has allowed our customers to quickly
develop new and more advanced products for their markets.
In the DMOS transistor product line, Supertex focuses on certain
niches such as very low threshold and low leakage devices which are
most suitable for telecommunication, automatic test equipment, and
hand-held applications where these features justify a premium. The
DMOS transistor products also serve as predecessors
to a fully integrated solution such as high voltage integrated circuits.
Research and Development
Supertex incurred expenses of $8,468,000, $7,195,000, and $5,582,000
on research and development activities during fiscal years 2000,
1999, and 1998, respectively. Research and development activities
in fiscal 2000 continued at the rate of over thirty new product
projects per year.
We believe that our position as a leading supplier in our targeted
markets can only be maintained through continuous investments in
research and development. We focus our efforts on designing new
products with existing process technologies while also developing
new process technologies to be used for future products. We
continuously strive to effectively monitor and control our research
and development programs in order to obtain better performance and
greater technological achievements at lower costs.
Manufacturing
Manufacturing operations include wafer fabrication, limited assembly
and packaging, product testing, and quality control.
We subcontract most of our standard component packaging and limited
testing to independent assemblers, principally in Thailand,
Malaysia, the Philippines, and Taiwan. A specialized assembly area
is also maintained at our manufacturing facilities to package
engineering prototypes, to ensure high priority deliveries, and to
assemble high reliability circuits required in military and other
high reliability applications. After assembly, packaged units are
shipped back to our facility or to testing subcontractors for final
product testing. Quality control is performed at our headquarters
before shipment to customers. Although our off-shore assembly and
test subcontractors have not experienced any serious work stoppages,
the political situation in these countries could be volatile. Any
prolonged work stoppage or other inability to assemble products
would have a material adverse impact on our operating results
although we have qualified assemblers in different countries to
reduce risk. Furthermore, economic risks, such as changes in tariff
or freight rates or interruptions in air transportation, could
adversely affect our operating results.
As a result of our acquisition on February 1, 1999 of the six inch
wafer fabrication (fab) facility in San Jose, California from Orbit
Semiconductor, a subsidiary of the DII Group, we believe that we are
well-positioned to fulfill our wafer manufacturing capacity needs
for the near future. Since the acquisition, we have ramped up the
production volume of the new fab consisting of foundry wafers and
correspondingly ramped down the production volume of our old fab.
Our current goal is to complete the conversion before the end of the
FY2001 at which time we may sell the equipment in the old fab and
sublet the space.
The availability of blank silicon wafers has improved considerably
in the past years. Assembly packages and other raw materials we use
in the manufacturing of our products are obtainable from several
suppliers. Some of these materials were in short supply in prior
years, but recently the supply of these materials appears to be
plentiful and subject to competitive pricing pressure. However, any
future shortage of supply would have a material adverse effect on
our operating results. As is typical in the semiconductor industry,
we must allow for lead times in ordering certain materials and
services and often commit to volume purchases to obtain favorable
pricing concessions and resource allocations.
Environmental Laws
Government regulations impose various environmental controls on the
waste treatment and discharge of certain chemicals and gases after
their use in semiconductor processing. We believe that our
activities comply with present environmental regulations. However,
increasing attention has been focused on the environmental impact of
semiconductor manufacturing operations. While we have not
experienced any material adverse effects on our business or
financial results from our compliance with environmental regulations
and installation of pollution control equipment, there can be no
assurance that changes in such regulations will not necessitate our
acquisition of costly equipment or other requirements in the future.
We work closely with pollution
experts from federal, state, and local agencies, especially from the
cities of Sunnyvale and San Jose, California, to ensure that we are
in compliance with present requirements.
Sales
We market our standard and custom products in the United States and
abroad through our direct sales and marketing personnel in our
headquarters, as well as through independent sales representatives
and distributors supported by our field sales managers out of our
sales offices in New York, Texas, the United Kingdom, and Germany.
Export sales are made primarily through independent distributors to
customers in Western Europe and the Far East, and represented 36%,
51%, and 53% of net sales in fiscal years 2000, 1999, and 1998,
respectively. Exports to the Far East are largely to customers in
Japan. Export sales are denominated only in U.S. dollars. Although
export sales are subject to certain governmental commodity controls
and restrictions for national security purposes, we have not had any
material adverse effects on our business or financial results
because of these limitations.
In fiscal 2000, two customers Microtek and Dii Semiconductor
accounted for 12% and 11% of net sales respectively. Sales to
Microtek made up 16% and 19% of net sales for fiscal 1999 and 1998,
respectively. We have no long-term production agreement with
Microtek. Normal terms and conditions of sale apply, which include
a 60-day notice of cancellation and charges for work-in-process for
cancellations of less than 60 days from shipment. Outstanding
accounts receivable from Microtek and Dii Semiconductor accounted
for 10% and 17% of gross accounts receivable as of March 31, 2000,
respectively. While we maintain a good relationship with Microtek,
Inc. and Dii Semiconductor, a breakdown in that relationship could
materially and adversely affect our business and financial results.
Inventories are stated at the lower of cost (determined on a first-
in, first-out basis) or market value. Our inventories include high
technology parts and components that are specialized in nature or
subject to rapid technological obsolescence. While we endeavor to
minimize the required inventory on hand and consider technological
obsolescence when estimating amounts required such estimates may be
inaccurate and are subject to change.
Revenue from direct sales to end-user customers is recognized upon
shipment of products. Sales to distributors are made primarily
under arrangements allowing limited price protection and the right
of stock rotation on merchandise unsold by the distributors.
Because of this uncertainty associated with pricing concessions and
possible returns, we defer recognition of such sales and the related
costs of sales until the merchandise is sold by distributors to
their end-user customers. Material miscalculation in amounts
reported by distributors could have a materially adverse effect on
our business and financial results.
Backlog
Our backlog at March 31, 2000 was approximately $25,938,000,
compared with $17,139,000 and $15,339,000 at March 31, 1999 and
1998, respectively. 1We expect that all of the current backlog will
be shipped in fiscal 2001. Customers may cancel or reschedule
orders without significant penalty, and the price of products may be
adjusted between the time the purchase order is booked into backlog
and the time the product is shipped to the customer. For those
reasons, we believe that backlog is not meaningful in predicting our
actual net revenue for any future period.
Competition
Because of our market niches, market statistics are not generally
available for many of our products. Competition in general among
manufacturers of semiconductor components and discrete transistors
is intense. Many of our domestic and foreign competitors have
larger facilities, financial, technical, and personnel resources,
and more diverse product lines. Factors such as product prices,
product performance, diversity of product lines, delivery
capabilities, and the ability to adapt to rapid technological change
to develop new and improved products are the principal methods of
competition in the industry. We believe we are a leader in
important segments of our product families where we have a
technological and/or cost advantage and that we are generally
competitive with respect to these factors.
Patents and Licenses
We hold numerous United States patents which will expire between
2000 to 2018 and we have applications for additional patents
pending. Although we believe that our patents may have value, there
can be no assurance that our patents or any additional patents that
may be obtained in the future will provide meaningful protection
from competition. We believe that our success depends primarily on
the experience, creative skills, technical expertise, and marketing
ability of our personnel rather than on the ownership of patents.
Patents may, however, be useful for cross-license purposes and have
served the Company well in the past.
Supertex is not aware that any of its products infringe on any valid
patent or other proprietary rights of third parties but it cannot be
certain that they do not do so. If infringement is alleged, there
can be no assurance that the necessary licenses could be obtained,
or if obtained, would be on terms or conditions that would not have
a material adverse effect on the Company.
Employees
At March 31, 2000, we had 399 full time employees. Many of our
employees are highly skilled, and our continued growth and success
will depend in part on our ability to attract and retain such
employees. At times, we as well as other semiconductor
manufacturers experience difficulty in hiring and retaining
sufficient numbers of skilled personnel.
We believe that the compensation, benefits, and incentives offered
to our employees are competitive with those generally offered
throughout the semiconductor industry. There are no collective
bargaining agreements between us and our employees, and there has
been no work stoppage due to labor difficulties. The Company
considers its employee relations to be good.
Executive Officers of the Company
Name Position with the Company Age Officer Since
- ----------------------------------------------------------------------------
Henry C. Pao President, Principal Executive 62 1976
and Financial Officer
Richard E. Siegel Executive Vice President 54 1982
Benedict C. K. Choy Senior Vice President, Technology
Development, and Secretary 54 1976
Dennis E. Kramer Vice President, Materials 58 1996
William Numann Vice President, Standard Products 43 1997
William P. Ingram Vice President, Wafer Fab Operations 52 1999
Franklin Gonzalez Vice President, Process Technology 49 1999
Michael Lee Vice President, I.C. Design 45 1999
Officers appointed by the Board of Directors serve at the discretion
of the Board. There is no family relationship between any directors
or executive officers of the Company except as stated below.
Henry C. Pao is a founder of Supertex and has served as President,
Principal Financial and Executive Officer, and as a Director since
the Company's formation in fiscal 1976. Previously, he worked at
Fairchild Semiconductor, Raytheon, Sperry Rand and IBM. He has
B.S., M.S., and Ph.D. degrees in Electrical Engineering from
University of Illinois at Champaign-Urbana. Dr. Pao is the son of
Mr. Yunni Pao and the brother of Frank Pao, also Directors of the
Company.
Richard E. Siegel joined the Company in 1981 as National Sales
Manager, was appointed Vice President of Sales and Marketing in
April 1982, Senior Vice President in February 1988, and has served
as Executive Vice
President since November 1988. He has been a Director since 1988.
Previously, he worked at Signetics Corporation, Fairchild Semiconductor,
Ford Instrument and Grumman Aircraft Corporation. Mr. Siegel is
also a member of the Board of Directors for All American Semiconductor
(NASD: SEMI). All American Semiconductor, headquartered in Florida,
is a national distributor of electronic components manufactured by
others and is a major distributor for Supertex. Mr. Siegel has a B.S.
degree in Mechanical Engineering from City College of New York, augmented
with Electrical Engineering courses from Brooklyn Polytechnic Institute,
New York.
Benedict C. K. Choy, a founder of the Company, joined Supertex in
fiscal 1976 as Vice President, Device Technology and Process
Development, and has served as Senior Vice President since February
1988. He has been a Director since 1986. Previously, he worked at
Fairchild Semiconductor, National Semiconductor, and Raytheon. He
has a B.S. degree in Electrical Engineering from the University of
California, Berkeley.
Dennis E. Kramer joined Supertex in September 1981 as Wafer Fab II
Production Manager. Over his tenure, he has managed many facets of
the wafer fabrication process as well as all the back-end
manufacturing operations. He was promoted to Vice President of
Materials in 1996. Previously, he worked at Siemens and Signetics
Corporation. He has a B.S. degree in Chemistry from University of
California, Los Angeles and an MBA from Santa Clara University.
William Numann joined Supertex in June 1997, as Vice-President of
Standard Products. Previously, Mr. Numann worked at Siliconix for
twelve years. He has a B.S. degree in Electrical Engineering and an
MBA, both from Rensseleaer Polytechnic Institute, New York.
William P. Ingram joined Supertex five years ago as its Director of
Wafer Fab Operations. Prior to joining Supertex, he was Vice
President of Technology Development at Crosspoint Solutions, before
which he held management positions at Fairchild and National
Semiconductor. He began his career at National after receiving his
BS in Electrical Engineering with honors from the North Carolina
State University.
Franklin Gonzalez joined Supertex in November 1990 as a Process
Development Manager. In 1994, he was promoted to Director of Process
Technology. Prior to joining Supertex, he held various R&D
management positions spanning over seventeen years with such
companies as ECI Semiconductor, Telmos and Harris Semiconductor
where he began his career. He has a Ph.D. in Electrical Engineering
from the University of Florida and a Masters in Electrical
Engineering from Stanford University.
Michael Lee re-joined Supertex in October 1993 as Director of I.C.
Design. Before that, he had a combined total of fifteen years of
industry experience in I.C. Design. Mike began his career at
Supertex after receiving his Masters in Electrical Engineering from
UC Berkeley in 1978.
Item 2. Properties
The Company leases facilities covering approximately 38,000 square
feet at 1225/1231 Bordeaux Drive, Sunnyvale, California. Operations
at these facilities include the Company's four-inch wafer
fabrication , as well as process engineering, assembly, and quality
control functions. These facilities are leased from a corporation
owned by a director of the Company. (See Note 7 of "Notes to
Consolidated Financial Statements.")
The Company also leases facilities at 71 Vista Montana, San Jose,
California covering approximately 61,700 square feet where the
Company's six-inch wafer fabrication and process engineering
functions are located.
The Company owns its corporate headquarters, a facility of
approximately 42,000 square feet at 1235 Bordeaux Drive, Sunnyvale,
California, which houses the executive offices, sales and marketing,
product engineering, test, production control, corporate financial
and administrative staff.
The Company believes that its existing facilities and equipment are
well maintained and are in good operating condition.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
quarter ended March 31, 2000.
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters
On May 15, 2000, the last reported sale price was $33 1/4 per share.
There were approximately 2,633 shareholders of record of common
stock on May 15, 2000. We have not paid cash dividends on our
common stock in fiscal years 2000 and 1999, and the Board of
Directors presently intends to continue this policy in order to
retain earnings for the development of the Company's business.
Accordingly, it is anticipated that no cash dividends will be paid
to holders of common stock in the foreseeable future.
The following table sets forth the range of high and low closing
sale prices reported on The NASDAQ Stock Market under the symbol
SUPX for the periods indicated.
Fiscal Years Ended March 31,
----------------------------
2000 1999
---- ----
High Low High Low
First Quarter $ 11 $ 8 5/8 $ 13 1/8 $ 8 3/4
Second Quarter 16 10 5/8 12 1/8 9 1/8
Third Quarter 18 12 11 1/2 9 1/16
Fourth Quarter 34 7/8 18 13 9 3/4
Item 6. Selected Consolidated Financial Data
The selected financial information and other data presented below
should be read in conjunction with the "Consolidated Financial
Statements," "Notes to Consolidated Financial Statements," and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Form 10-K.
Fiscal Years Ended March 31,
2000 1999 1998 1997 1996
(in thousands)
Balance Sheet Data:
Working capital......$ 52,950 $ 41,650 $ 44,868 $ 36,734 $ 32,197
Total assets.........$ 86,623 $ 74,589 $ 66,629 $ 56,408 $ 45,428
Shareholders' equity.$ 72,269 $ 62,680 $ 57,217 $ 48,487 $ 38,663
Fiscal Years Ended March 31,
2000 1999 1998 1997 1996
(in thousands, except per share amounts)
Statement of Operations Data:
Net sales................... $ 70,838 $ 50,721 $ 52,706 $ 48,935 $ 42,802
Costs and expenses:
Costs of sales............ 44,976 28,867 28,709 26,073 22,097
Research and development.. 8,468 7,195 5,582 5,306 5,647
Selling, general and
administrative............ 6,980 6,860 6,724 6,226 5,700
Write-off of acquired in
process technology........ -- 2,506 -- -- --
Income from operations...... 10,414 5,293 11,691 11,330 9,358
Other income:
Interest income........... 1,978 1,981 1,666 1,430 1,099
Other income, net......... 257 (130) 2 63 255
Income before provision for
income taxes................ 12,649 7,144 13,359 12,823 10,712
Provision for income taxes.. 4,174 1,810 4,542 4,103 3,321
Net income.............. $ 8,475 $ 5,334 $ 8,817 $ 8,720 $ 7,391
Net income per share:
Basic................... $ 0.70 $ 0.44 $ 0.73 $ 0.73 $ 0.62
Diluted................. $ 0.68 $ 0.44 $ 0.71 $ 0.70 $ 0.60
Shares used in per share computation:
Basic................... 12,126 12,077 12,074 12,026 11,902
Diluted................. 12,519 12,225 12,380 12,509 12,296
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Cautionary Statement Regarding Forward Looking Statements This
Annual Report on Form 10-K 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. Examples of the kinds of forward-
looking statements in this report include statements regarding the
following: (1) we believe we are a market leader, (2) our new fab
will fulfil our wafer manufacturing capacity needs, (3) current
backlog will be shipped in fiscal 2001, and (4) our patents may
have value and may be useful for cross-licensing. 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 below in "Risk Factors" and
elsewhere in this report. 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.
Risk Factors Semiconductor companies as a group are subject to many
similar risks. These include the risks that (1) the demand for
semiconductors decreases as the industry has historically been very
cyclical, (2) there are shortages of raw materials and/or fab
capacity, (3) there are changes in underlying circuitor process
technology or fab technology, or (4) there is litigation regarding
third party patents. Other factors that could affect our future
results include whether we can generate new bookings from both new
and current products; general economic conditions, both in the
United States and foreign markets, and economic conditions specific
to the semiconductor industry; risks associated with customer
concentration; our ability to introduce new products, to enhance
existing products, and to meet the continually changing requirements
of our customers;
whether we can manufacture efficiently and control costs; and our
ability to maintain and enhance relationships with our assembly and
test subcontractors and independent distributors and sales
representatives. In addition, we are subject to the below-described
risks which are specific to us and our business:
- We have focused our product offerings primarily on niche
markets which leverage our capabilities and which we believe we can
dominate. We attempt to choose markets which are sizable enough to
be worth pursuing but which are not large enough to attract fierce
competition. These markets could grow enough to attract increased
competition or else competitors could enter due to happenstance or
down-turns elsewhere. In addition, these niches might be more
susceptible to shrinkage than more diverse markets, due to their
concentration on a few product offerings.
- We are dependent upon one fab which we own and operate,
assuming successful conversion from our four-inch to our six-inch
fab. We would be susceptible were this fab to be unable to meet our
needs, for example, were this fab to become obsolete due to process
technology changes, or to be damaged, for example by fire or
earthquake. We could encounter difficulties in operating our fab,
such as contaminants in the air or defects in equipment, which could
affect yields and production.
- We have several competitors which are substantially larger and
could bring to bear substantially more resources in our niche
markets. We have been able to maintain high margins in part because
of our dominance of most of our niche markets. Increased
competition could cause our margins to decrease.
- Our outstanding stock is owned more than 25% by Henry Pao,
President, CEO, and a director, and his father and brother. They
have no agreement among themselves to act together with respect to
the Company or their stockholdings. Were they to act in concert,
they would be our largest shareholder and would have an ability to
elect one or more directors, to direct management, and to delay or
prevent a change in control.
- We sell a substantial amount of our products internationally.
Problems with foreign economies or wars, or changes in the exchange
rate, could adversely affect our foreign sales.
- We depend upon two customers for approximately 23% of our
sales, even though one is our primary distributor in Japan and the
other is a foundry customer. Customers can typically cancel or
reschedule orders without penalty so decreased demand for our
products could translate into decreased sales very rapidly.
- We are very dependent upon continued innovation of our
engineers. The competition for engineers with relevant experience
is extremely intense in the Silicon Valley, where most of our
engineers are located. We must compete in terms of salary,
benefits, and working conditions with many start-ups which can offer
more equity. We have started an IC Design Center in Hong Kong where
competition is not as intense.
- We are dependent upon several key persons for management and
engineering expertise. Their loss would be detrimental to us.
The following discussion should be read in conjunction with the
"Consolidated Financial Statements," "Notes to Consolidated
Financial Statements" and "Selected Consolidated Financial Data"
included elsewhere in this Form 10-K.
The following table sets forth items from the Statements of Income
as a percentage of net sales for the periods indicated:
Fiscal Years Ended March 31,
2000 1999 1998
Net sales............................ 100.0% 100.0% 100.0 %
Costs of sales...................... 63.5 56.9 54.5
Research and development............ 11.9 14.2 10.6
Selling, general and administrative. 9.9 13.6 12.8
Write off of acquired in process
technology.......................... -- 4.9 --
Income from operations............... 14.7 10.4 22.1
Other income
Interest income..................... 2.8 3.9 3.2
Other income (expense), net......... 0.4 (0.2) 0.0
Income before provision for
income taxes ..................... 17.9 14.1 25.3
Provision for income taxes........... 5.9 3.6 8.6
Net income....................... 12.0% 10.5% 16.7%
Results of Operations
Fiscal 2000 VS Fiscal 1999
Net Sales: The Company had net sales of $70,838,000 in fiscal 2000,
an increase of $20,117,000 or 39.7% from the previous fiscal year.
The increase in the current year's net sales is primarily due to the
addition of the foundry business resulting from the acquisition of
the submicron wafer fabrication facility (fab) on February 1, 1999.
This foundry business represented 32.3% of the total increase over
fiscal 1999 net sales. The remaining 7.4% of the increase over
fiscal 1999 net sales is due to increased sales of core products.
In fiscal 2000, approximately 36% of the Company's net sales were
derived from customers outside the United States, primarily in
Western Europe and the Far East (51% in fiscal 1999). The decrease
in percentage of international sales is primarily due to the
acquisition and growth of the foundry business which has only U.S.
customers. International sales represented 50% and 55% of net core
business sales in fiscal 2000 and 1999, respectively. All of the
Company's sales to international customers were denominated in U.S.
currencies. There was no currency exchange exposure.
Gross Margin: The Company's gross margin as a percentage of net
sales was 36.5% and 43.1%, in fiscal 2000 and 1999, respectively.
Gross margin for the current fiscal year was adversely affected by
the Company incurring additional overhead expenses as a result of
operating two fabs, including the depreciation of the capitalized
assets and the amortization of other assets associated with the new
fab. Gross margin during fiscal 2000 was also affected by lower
margins associated with the foundry business resulting from the
acquisition of the Company's new fab.
Research and Development: Research and development expenses, which
include payroll and benefits, processing costs and process transfer
costs, were 11.9% and 14.2% of net sales in fiscal 2000 and 1999,
respectively. Dollar expenditures for research and development were
$8,468,000 and $7,195,000 for fiscal 2000 and 1999, respectively.
While the dollar expenditure for fiscal 2000 is higher than the
prior fiscal year, the growth in net sales caused the percentage of
research and development expense to net sales to decline. The
increase in research and development expenses is due to a non-
recurring payment of $1,350,000 to Orbit Semiconductor, Inc. under a
process development agreement to accelerate the process transfer of
Supertex's core products to the six-inch fab from the old four-inch
fab.
Selling, General and Administrative: Selling, general and
administrative expenses, which include commissions,
payroll and benefits, were 9.9% and 13.6% of net sales in fiscal
2000 and 1999, respectively. In fiscal 2000, the selling, general and
administrative expenses was $6,980,000 compared to $6,860,000 for
fiscal 1999. While the selling, general and administrative expenses
remained relatively the same as the previous year, the increase in
net sales amount caused the percentage of selling, general and
administrative expenses as a percent of net sales to decrease 3.7%.
Interest Income: Interest income, which consists primarily of
interest income from the Company's cash, cash equivalents and short-
term investments, was $1,978,000 in fiscal 2000 as compared with
$1,981,000 in fiscal 1999. The decrease in interest income was
caused by the decrease in cash available for investment due to the
purchase of the new fab.
Other Income: Other Income of $257,000 for fiscal 2000 consists
primarily of gain on disposal of surplus equipment and sublease
expenses net of sublease income. The increase in this category for
the fiscal 2000 when compared to fiscal 1999 was primarily due to
the gain on disposal of surplus equipment.
Provision for Income Taxes: Income taxes for fiscal 2000 and 1999
were at 33.0% and 25.3%, respectively, of income before provision
for income taxes. The current fiscal year's tax provision is 33%
compared to a lower tax provision for fiscal 1999. Higher tax
credits and additional expenses from the acquisition of the six-inch
fab caused fiscal 1999 tax rate to be significantly lower.
Fiscal 1999 VS Fiscal 1998
Net Sales: The Company had net sales of $50,721,000 in fiscal 1999,
a decrease of $1,985,000 or 3.8% from the previous fiscal year. The
decline in fiscal 1999 net sales reflects weakness in demand and
price pressure during the first three fiscal quarters primarily as a
result of the Asian economic crisis.
In fiscal 1999, approximately 51% of the Company's net sales were
derived from customers outside the United States, primarily in
Western Europe and the Far East (53% in fiscal 1998). All of the
Company's sales to international customers were denominated in U.S.
currencies. There was no currency exchange exposure; however,
during the first three quarters of fiscal 1999 when the US dollar
strengthened beyond expectation, many international customers
requested and received some modest price concessions.
Gross Margin: The Company's gross margin as a percentage of net
sales was 43.1% and 45.5% in fiscal 1999 and 1998, respectively.
The decline in gross margin in fiscal 1999 is the result of the
decline in net sales as discussed above and increased manufacturing
depreciation expense partly due to the acquisition of the six-inch
submicron wafer fabrication facility.
Research and Development: Research and development expenses were
14.2% and 10.6% of net sales in fiscal 1999 and 1998, respectively.
The increase in research and development expenses for fiscal 1999 is
attributable primarily to the Process Development Agreement ("PDA")
that the Company has with Orbit Semiconductor which will allow
faster process transfer from the Company's four inch fabrication
processes to the Company's newly acquired six inch submicron wafer
fabrication facility. The PDA extends up to the first quarter for
fiscal 2000.
Selling, General and Administrative: Selling, general and
administrative expenses were 13.6% and 12.8% of net sales in fiscal
1999 and 1998, respectively. In fiscal 1999, the selling, general
and administrative expenses remained relatively the same as the
previous year but the decline in net sales amount caused the
percentage to increase less than 1%.
Write-off of In-process Technology: The Company incurred a non-cash,
non-tax deductible charge to operations of $2.5 million for the
write-off of in-process technology related to the acquisition of
assets from Orbit Technology in February 1999, because the
technological feasibility of the in-process technology acquired had
not been established and there was no alternative future use.
Interest Income: Interest income, which consists primarily of
interest income from the Company's cash, cash equivalents and short-
term investments, was $1,981,000 as compared with $1,666,000 in
fiscal 1998 due to the
larger amount of funds available for investment.
Other Income (Expense): Other Income (expense) of $130,000 for
fiscal 1999 consists primarily of royalties received from Texas
Instruments net of tax, sublease income net of sublease expenses,
and gain on disposal of retired equipment. The decline in this
category for the fiscal year 1999 when compared to fiscal 1998 was
primarily due to additional sublease expenses incurred during the
fiscal year, mainly depreciation in nature, as a result of a new
sublease contract.
Provision for Income Taxes: Income taxes for fiscal 1999 and 1998
were at 25.3% and 34.0%, respectively, of income before provision
for income taxes. The lower tax provision for fiscal 1999 was due
to higher tax credits and additional expenses from the acquisition
of the six-inch facility
Financial Condition
Overview: Total assets grew to $86,623,000 at the end of fiscal
2000, up from $74,589,000 at the end of fiscal 1999. The increase
was due primarily to profit generated from operations during the
year.
Liquidity and Capital Resources: The Company's primary source of
funds for fiscal 2000, 1999, and 1998 has been the net cash
generated from operating activities of $9,022,000, $10,274,000, and
$10,864,000, respectively. Net cash provided by operating
activities in fiscal 2000 of $9,022,000 consisted principally of net
income of $8,475,000, plus depreciation and amortization of
$6,118,000, provision for doubtful accounts and sales returns of
$3,150,000, income taxes payable of $1,186,000, and an increase in
accounts payable and accrued expenses of $2,455,000, partially
offset by decreases in accounts receivable, deferred income taxes
and inventories of $6,718,000, $1,017,000, and $3,295,000,
respectively.
Net cash used in investing activities in fiscal 2000 was
$15,265,000, which consisted of increase in short term investments
of $11,385,000 and the purchase of property and equipment of
$3,880,000.
Net cash provided by financing activities in fiscal 2000 was
$637,000, which consisted of proceeds from exercises of stock
options of $1,602,000 partially offset by repurchases of the
Company's common stock in the amount of $965,000.
As of March 31, 2000, the Company's working capital was $52,950,000,
which included approximately $34,176,000 in cash, cash equivalents
and short-term investments.
The Company anticipates that the available funds and cash expected
to be generated from operations will be sufficient to meet cash and
working capital requirements through the end of fiscal 2000. The
Company expects to spend approximately $7,000,000 for capital
acquisitions during fiscal 2001.
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.
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 FASB interpretation 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.
Item 7A. Quantitative and Qualitative Disclosures About Market
Risk
The Company is exposed to financial market risks due primarily to
changes in interest rates. The Company does not use derivatives to
alter the interest characteristics of its investment securities. The
Company has no holdings of derivative or commodity instruments. The
fair value of the Company's investment portfolio or related income
would not be significantly impacted by changes in interest rates
since the investment maturities are short and the interest rates are
primarily fixed. The Company anticipates interest income on cash
balances for FY2001 to be approximately $1,750,000 at an estimated
average interest rate of 5%.
Item 8. Financial Statements and Supplementary Data
The Financial Statements and Financial Statement Schedule are listed
in Item 14 of this report.
Supplementary Quarterly Financial Data:
Quarters Ended
Mar Dec Sep Jun Mar Dec Sep Jun
31, 31, 30, 30, 31, 31, 30, 30,
2000 1999 1999 1999 1999 1998 1998 1998
(Unaudited) (in thousands, except per share amounts)
Statement of
Operations Data:
Net sales ...... $20,095 $17,709 $16,737 $16,297 $13,053 $12,017 $12,650 $13,001
Costs of sales.. 12,445 11,065 10,725 10,741 8,887 6,565 6,508 6,907
Income (loss)
from operations. 3,384 3,122 2,679 1,229 (2,934) 2,447 2,879 2,901
Income (loss)
before provision
for income taxes 4,442 3,648 2,963 1,596 (2,593) 3,046 3,349 3,342
Net income (loss)$ 2,977 $ 2,444 $ 1,985 $ 1,069 $(1,287) $ 2,204 $ 2,210 $ 2,207
Net Income (loss)
per share
Basic........ $ 0.24 $ 0.20 $ 0.16 $ 0.09 $ (0.11) $ 0.18 $ 0.18 $ 0.18
Diluted...... $ 0.23 $ 0.20 $ 0.16 $ 0.09 $ (0.11) $ 0.18 $ 0.18 $ 0.18
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
PART III
Certain information required by Part III is incorporated by
reference from the Company's definitive Proxy Statement to be filed
with the Securities and Exchange Commission in connection with the
solicitation of proxies for the Company's 2000 Annual Meeting of
Stockholders (the "Proxy Statement").
Item 10. Directors and Executive Officers of the Registrant
Information regarding our directors is set forth under "Election of
Directors - Nominees" in the Proxy Statementand is incorporated by
reference. The required information regarding executive officers
is included in Part I hereof under caption "Executive Officers of
the Company"
Item 11. Executive Compensation
Information regarding the Company's remuneration of its officers and
directors is set forth under "Compensation of Directors" and
"Compensation of Executive Officers" in the Proxy Statement and is
incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information regarding the security ownership of certain beneficial
owners and management is set forth under "Security Ownership of
Certain Beneficial Owners and Management" in the Proxy Statement and
is incorporated by reference.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions
is set forth under "Certain Transactions: Lease with Company
Director" in the Proxy Statement, and is incorporated by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on
Form 8-K
(a) The following documents are filed as part of this report:
Page No.
1. Report of Independent Accountants..................... 18
2. Consolidated Financial Statements:
Consolidated Balance Sheets at March 31, 2000 and
1999............................................... 19
For the three years ended March 31, 2000, 1999,
and 1998:
Consolidated Statements of Income............... 20
Consolidated Statements of Shareholders'Equity.. 21
Consolidated Statements of Cash Flows........... 22
Notes to Consolidated Financial Statements......... 23
3. Financial Statement Schedule. The following Financial
Statement Schedule of Supertex, Inc., is filed as part of
this report and should be read in conjunction with the
Consolidated Financial Statements of Supertex.
Schedule for fiscal years ended March 31, 2000,
1999, and 1998:
II Valuation and Qualifying Accounts............... 31
All other schedules have been omitted since the required information
is not present or it is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the consolidated financial statements, including notes
thereto.
4. Exhibits. The exhibits listed in the accompanying EXHIBIT
INDEX are filed as part of this annual report.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of
the period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
SUPERTEX, INC.
Dated: June 16, 2000 /s/ Henry C. Pao
Henry C. Pao, President,
Principal Financial and
Accounting Officer
Pursuant to the requirements of the Securities Act of 1934, this
report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Henry C. Pao, his attorney-in-
fact, with the power of substitution, for him in any and all
capacities, to sign any amendments to this report on Form 10-K, and
to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact, or
his substitute or substitutes, may do or cause to be done by virtue
hereof.
Signature Title Date
/s/ Henry C. Pao President, Principal Executive and June 16, 2000
(Henry C. Pao) Financial Officer and Director
/s/ Richard E. Siegel Executive Vice President and Director June 16, 2000
(Richard E. Siegel)
/s/ Benedict C. K. Choy Senior Vice President and Director June 16, 2000
(Benedict C. K. Choy)
/s/ Yunni Pao Director June 16, 2000
(Yunni Pao)
/s/ Frank C. Pao Director June 16, 2000
(Frank C. Pao)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Supertex, Inc.
In our opinion, the consolidated financial statements listed in the
index appearing under Item 14(a)(2) present fairly, in all material
respects, the financial position of Supertex, Inc. and its
subsidiary at March 31, 2000 and March 31, 1999, and the results of
their operations and their cash flows for each of the three years
in the period ended March 31, 2000, in conformity with accounting
principles generally accepted in the United States. In addition, in
our opinion, the financial statement schedule listed in the index
appearing under Item 14(a)(3) presents fairly, in all material
respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements and financial
statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/s/PRICEWATERHOUSECOOPERS LLP
San Jose, California
April 28, 2000
SUPERTEX, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31,
2000 1999
---- ----
ASSETS
Current Assets:
Cash and cash equivalents......................$ 22,584 $ 28,190
Short term investments......................... 11,592 207
Trade accounts receivable, net of allowances
of $1,366 in 2000 and $1,020 in 1999........... 14,428 10,860
Other accounts receivable...................... 315 657
Inventories.................................... 15,083 11,330
Prepaid expenses............................... 440 453
Deferred income taxes.......................... 2,862 1,862
-------- --------
Total current assets........................ 67,304 53,559
Property, plant and equipment, net................ 14,890 15,946
Intangible and other assets, net.................. 2,559 3,231
Deferred income taxes............................. 1,870 1,853
-------- --------
TOTAL ASSETS......................................$ 86,623 $ 74,589
======== ========
LIABILITIES
Current Liabilities:
Trade accounts payable.........................$ 8,395 $ 6,835
Accrued salaries, wages and employee benefits.. 4,495 3,162
Other accrued liabilities...................... 276 714
Deferred revenue on shipments to distributors.. 835 1,198
Income taxes payable........................... 353 --
------ ------
Total current liabilities................... 14,354 11,909
------ ------
Commitments and contingencies (Note 7)
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 12,251
shares in 2000 and 12,099 shares in 1999...... 23,167 20,887
Accumulated other comprehensive income......... -- 356
Retained earnings.............................. 49,102 41,437
------ ------
Total shareholders'equity................... 72,269 62,680
------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........$ 86,623 $ 74,589
====== ======
See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Year Ended March 31,
2000 1999 1998
Net sales...................... $ 70,838 $ 50,721 $ 52,706
------ ------ ------
Costs and expenses:
Costs of sales............... 44,976 28,867 28,709
Research and development..... 8,468 7,195 5,582
Selling, general and
administrative............... 6,980 6,860 6,724
Write-off of acquired in
process technology........... -- 2,506 --
------ ------ ------
Total costs and expenses.. 60,424 45,428 41,015
------ ------ ------
Income from operations......... 10,414 5,293 11,691
Other income:
Interest income.............. 1,978 1,981 1,666
Other income (expense), net.. 257 (130) 2
------ ------ ------
Income before provision
for income taxes.......... 12,649 7,144 13,359
Provision for income taxes..... 4,174 1,810 4,542
------ ------ ------
Net income..................... $ 8,475 $ 5,334 $ 8,817
====== ====== ======
Net income per share:
Basic........................ $ 0.70 $ 0.44 $ 0.73
Diluted...................... $ 0.68 $ 0.44 $ 0.71
Shares used in per share computation:
Basic........................ 12,126 12,077 12,074
Diluted...................... 12,519 12,225 12,380
See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
Accumulated
Other
Common Stock Comprehensive Retained Shareholders'
Shares Amount Income Earnings Equity
Balance, March 31, 1997......12,047 20,302 -- 28,185 48,487
Stock options exercised.... 97 375 -- -- 375
Stock repurchased.......... (47) (71) -- (443) (514)
Tax benefit from exercise
of stock options........... -- 52 -- -- 52
Net income................. -- -- -- 8,817 --
Total comprehensive income. -- -- -- -- 8,817
----------------------------------------------
Balance, March 31, 1998......12,097 20,658 -- 36,559 57,217
Stock options exercised.... 63 282 -- -- 282
Stock repurchased.......... (61) (103) -- (456) (559)
Tax benefit from exercise
of stock options........... -- 50 -- -- 50
Change in unrealized
holding gains and losses... -- -- 356 -- --
Net income................. -- -- -- 5,334 --
Total comprehensive income. -- -- -- -- 5,690
----------------------------------------------
Balance, March 31, 1999......12,099 20,887 356 41,437 62,680
Stock options exercised.... 247 1,602 -- -- 1,602
Stock repurchased ......... (95) (155) -- (810) (965)
Tax benefit from exercise
of stock options........... -- 833 -- -- 833
Change in unrealized
holding gains and losses... -- -- (356) -- --
Net income................. -- -- -- 8,475 --
Total comprehensive income. -- -- -- -- 8,119
----------------------------------------------
Balance, March 31, 2000......12,251 $ 23,167 $ -- $ 49,102 $ 72,269
====== ======== ========== ========= =========
See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended March 31,
2000 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.............................. $ 8,475 $ 5,334 $ 8,817
Non-cash adjustments to net income:
Depreciation and amortization......... 6,118 4,135 2,669
Write-off of in-process technology.... -- 2,506 --
Provision for doubtful accounts and
sales returns......................... 3,150 2,417 1,573
Provision for excess and obsolete
inventories........................... (458) 1,300 277
(Gain) / Loss on disposal of assets... (203) -- 11
Deferred income taxes................. (1,017) (1,533) (347)
Changes in operating assets and liabilities:
Accounts receivable................... (6,718) (3,828) (2,188)
Inventories........................... (3,295) (2,367) (1,291)
Prepaid expenses and other assets..... (308) (238) (200)
Trade accounts payable and accrued
expenses.............................. 2,455 3,830 203
Income taxes payable.................. 1,186 (1,029) 966
Deferred revenue on shipments to
distributors.......................... (363) (253) 374
--------- -------- --------
Total adjustments....................... 547 4,940 2,047
--------- -------- --------
Net cash provided by operating
activities.............................. 9,022 10,274 10,864
--------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of intangible assets -- (4,723) --
Purchases of property and equipment..... (3,880) (7,586) (3,276)
Purchases of short term
investments............................. (54,152) (41,172) (27,213)
Proceeds from maturities of short term
investments............................. 42,767 47,118 25,152
--------- -------- --------
Net cash used in investing activities... (15,265) (6,363) (5,337)
--------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock options exercised................. 1,602 282 375
Stock repurchased....................... (965) (559) (512)
--------- -------- --------
Net cash provided by (used in) financing
activities.............................. 637 (277) (137)
--------- -------- --------
NET INCREASE IN CASH AND CASH
EQUIVALENTS............................. (5,606) 3,634 5,390
CASH AND CASH EQUIVALENTS:
Beginning of year..................... 28,190 24,556 19,166
--------- -------- --------
End of year........................... $22,584 $28,190 $24,556
========= ======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Tax benefit from exercise of stock
options $ 833 $ 50 $ 52
Stock tendered for exercise of stock
options 122 4 64
See accompanying Notes to Consolidated Financial Statements.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business: The Company designs, manufactures and markets
custom and standard semiconductor products.
Principles of Consolidation: The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary.
All significant intercompany accounts and transactions have been
eliminated.
Fiscal Period: The Company uses a 52-53 week fiscal year ending the
Saturday nearest March 31. The Company's fiscal years in the
accompanying financial statements have been shown ending on March
31. Fiscal year 2000 comprises 53 weeks. Fiscal years 1999, and
1998 both comprise 52 weeks.
Use of Estimates in Preparation of the Financial Statements: The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Certain Risks and Uncertainties: The Company's business is
concentrated in the high voltage semiconductor components industry,
which is rapidly changing, highly competitive and subject to
competitive pricing pressures. The Company's operating results may
experience substantial period-to-period fluctuations due to these
factors, including the cyclical nature of the semiconductor
industry, the changes in customer requirements, the timely
introduction of new products, the Company's ability to implement new
capabilities or technologies, its ability to manufacture
efficiently, its reliance on subcontractors and vendors, and the
general economic conditions.
Cash and Cash Equivalents: The Company considers all highly liquid
debt and equity instruments purchased with an original maturity of
three months or less to be cash equivalents.
Financial Instruments: Short term investments, which are classified
as available-for-sale, consist principally of commercial paper that
matures within one year and are stated at fair market value, which
approximates cost. Unrealized holding gains and losses are
reflected at a net amount as a separate component of the
shareholders' equity until realized. For the purpose of computing
realized gains and losses, cost is identified on a specific
identification basis.
Investments in equity securities that are not traded on public
markets are accounted for under the cost method of accounting. The
company periodically evaluates the carrying value of such equity
investments and when a decline in the value is other than temporary,
the securities are reduced to their net realizable value. The
Company's Supplemental Employee Retirement Plan has investments in
equity securities that are not publicly traded.
Concentration of credit risk and foreign operations: Financial
instruments which potentially subject the Company to concentrations
of credit risk consists principally of cash and cash equivalents and
accounts receivable. The Company's accounts receivable are derived
from revenue and earned from customers located in the U.S. and
certain foreign countries and regions, including Europe and Japan.
Sales to foreign customers for the year ended December 31, 1998,
1999 and 2000, all of which were denominated in U.S. dollars,
accounted for 53%, 51% and 36% of net sales, respectively. The
Company performs ongoing credit evaluations of its customers'
financial condition and requires no collateral from its customers.
The Company maintains an allowance for doubtful accounts receivable
based upon the expected collectibility of accounts receivable.
The Company sells its semiconductor products in North America,
Europe and the Pacific Rim to numerous customers. Allowances for
potential credit losses are maintained and such losses historically
have not been
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
material. Substantially all of the Company's cash, cash equivalents
and short term investments are held at four major financial
institutions domiciled in the United States.
Significant Customers: During the year ended March 31, 2000, two
customers, Microtek and Dii Semiconductor, represented 10% and 17%
of gross accounts receivables, and 12% and 11% of net sales,
respectively. Microtek also accounted for approximately 16%, and
19% of net sales in fiscal 1999, and 1998, respectively.
Inventories: Inventories are stated at the lower of cost (determined
on a first-in, first-out basis) or market value. The Company's
inventories include high technology parts and components that are
specialized in nature and subject to rapid technological
obsolescence. While the Company has programs to minimize the
required inventories on hand and considers technological
obsolescence when estimating amounts required to reduce recorded
amounts to market values, it is reasonably possible that such
estimates could change in the near term.
Property, Plant and Equipment: Property and equipment are stated at
cost and generally depreciated using accelerated methods over
estimated useful lives of five years. Building and building
improvements are recorded at cost and are depreciated on a straight-
line basis over the useful life of the building. Leasehold
improvements are recorded at cost and are amortized on a straight-
line basis over the lesser of the related lease term or the
estimated useful life of the assets. The Company reviews for
impairment of its long-lived assets whenever events or changes in
circumstances indicate that the carrying amount of an asset might
not be recoverable. In certain situations, an impairment loss would
be recognized.
Intangible Assets: Intangible assets were recorded in conjunction
with the Asset Purchase Agreement with Orbit Semiconductor. Other
intangible assets consist of purchased technology and assembled
workforce, which are being amortized on a straight-line basis over
their estimated useful lives of two years and five years,
respectively.
The Company assesses the recoverability of intangible assets by
determining whether the amortization of the asset's net book value
over its remaining life can be recovered through projected
undiscounted future cash flows. Intangible assets consist of the
following at March 31, 2000 and 1999 (in thousands):
March 31,
2000 1999
-------- --------
Purchased technology $ 1,735 $ 1,735
Assembled workforce 482 482
-------- --------
2,217 2,217
Less accumulated amortization (1,124) (145)
-------- --------
$ 1,093 $ 2,072
======== ========
Revenue Recognition: Net sales are stated net of discounts and
allowances. Revenue from direct sales to end-user customers is
recognized upon shipment of product. Sales to distributors are made
primarily under arrangements allowing limited price protection and
the right of stock rotation on merchandise unsold by the
distributors. Because of the uncertainty associated with pricing
concessions and possible returns, the Company defers recognition of
such sales and the related costs of sales until the merchandise is
sold by distributors to their end-user customers.
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.
The following is a reconciliation of the numerator (net income) and
the denominator (number of shares) used in the basic and diluted EPS
calculations.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Fiscal Year Ended
March 31,
2000 1999 1998
---- ---- ----
BASIC:
Weighted average shares outstanding
for the period .................... 12,126 12,077 12,074
Net income ........................ $ 8,475 $ 5,334 $ 8,817
Net income per share............... $ 0.70 $ 0.44 $ 0.73
DILUTED:
Weighted average shares
outstanding for the period ....... 12,126 12,077 12,074
Potential common stock............ 393 148 306
------- ------- -------
Total common and common equivalent
shares ............................ 12,519 12,225 12,380
Net income ........................ $ 8,475 $ 5,334 $ 8,817
Net income per share............... $ 0.68 $ 0.44 $ 0.71
Options to purchase the Company's common stock of 9,230 shares at
prices between $16.50 - $26.06, 515,446 shares at prices between
$8.88 - $16.75, and 200,600 shares of the Company's common stock at
prices between $13.88 - $19.88, in fiscal 2000, 1999, and 1998,
respectively, were outstanding but were not included in the
computation of diluted earnings per share because the option
exercise prices were greater than the average market price of the
common stock.
Income Taxes: The Company utilizes the liability method to account
for income taxes where deferred tax assets or liabilities are
determined based on the temporary differences between the bases used
for financial versus tax reporting of assets and liabilities, using
tax laws and rates in effect for the year in which the differences
are expected to affect taxable income.
Advertising Costs: We expensed advertising and promotional costs as
they are incurred. Advertising costs for the last three fiscal
years were immaterial.
Fair Value of Financial Instruments: Carrying amounts of certain of
the Company's financial instruments including cash, cash
equivalents, accounts receivable, and accounts payable approximate
fair value due to their short maturities.
Comprehensive Income: In fiscal 1999, the Company adopted SFAS No.
130, "Reporting Comprehensive Income." SFAS No. 130 establishes
standards for disclosure and financial statement display for
reporting total comprehensive income and its individual components.
Comprehensive income, as defined, includes all changes in equity
during a period from non-owner sources. The Company's comprehensive
income includes net income and unrealized gains and losses on
investments and is displayed in the statement of stockholders'
equity,
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.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
In March 2000, The Financial Accounting Standards Board ("FASB")
issued FASB interpretation 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 is not expected to have a material
impact on the financial statements.
2. INVENTORIES (in thousands):
March 31,
2000 1999
---- ----
Raw materials...................$ 1,088 $ 697
Work-in-process................. 11,652 7,099
Finished goods.................. 2,343 3,534
-------- --------
$ 15,083 $ 11,330
======== ========
3.PROPERTY AND EQUIPMENT (in thousands):
March 31,
2000 1999
---- ----
Land......................... $ 825 $ 825
Machinery and equipment...... 32,439 28,936
Leasehold improvements ...... 2,518 2,374
Building..................... 2,038 1,968
Furniture and fixtures....... 209 118
-------- --------
38,029 34,221
Less accumulated depreciation
and amortization............. (23,139) (18,275)
-------- --------
$ 14,890 $ 15,946
======== ========
4. ACQUISITION OF FACILITY (in thousands):
In February 1999, the Company acquired certain assets related to the
six-inch fabrication facility of Orbit Semiconductor for a total
cash purchase price of approximately $10,000,000 including direct
costs incurred. The acquisition of assets has been accounted for as
a purchase and the results of operations have been included in the
consolidated statement of operations of the Company from the date of
acquisition. The purchase price was allocated to assets acquired
based on fair value determined by independent appraisers. The
allocation of the purchase price was as follows (in thousands):
Property and equipment $ 5,277
Purchased technology 1,735
Assembled workforce 482
In-process technology 2,506
-------
$10,000
=======
The amounts allocated to purchased technology and assembled
workforce were determined through known valuation techniques in the
high technology industry. The value assigned to in-process
technology was determined by identifying development projects for
which technological feasibility had not been established and
estimating the expected cash flows from the projects once
commercially feasible. These cash flows were discounted back to
their present value and a percentage of completion discount was
applied to the calculation. The percentage of completion for the in-
process projects ranged from 50% to 90% complete, resulting in
estimated cost to complete of $7,000,000. The technological
feasibility of the in-process technology had not been established
and had no alternative future use. Accordingly, the entire $2.5
million has been charged to operations in the fourth quarter of
fiscal 1999.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
5. INCOME TAXES
The components of the provision for income taxes for fiscal years
ended March 31, 2000, 1999, and 1998 are as follows (in thousands):
March 31,
2000 1999 1998
Federal - current................$ 4,713 $ 3,226 $ 4,223
Federal - deferred............... (718) (1,304) (333)
-------- -------- --------
3,995 1,922 3,890
-------- -------- --------
State - current.................. 478 117 666
State- deferred.................. (299) (229) (14)
-------- -------- --------
179 (112) 652
-------- -------- --------
$ 4,174 $ 1,810 $ 4,542
======== ======== ========
Substantially all of the Company's revenue is taxable in the United
States. The provision for income taxes differs from the amount
computed by applying the statutory federal income tax rate to income
before provision for income taxes as follows:
2000 1999 1998
Statutory provision.................... 34% 34% 35%
State tax, net of federal benefits..... 3 5 4
Tax credits............................ (1) (6) (3)
Benefit of foreign sales corporation... (2) (4) (3)
Other.................................. (1) (4) 1
---- ---- ----
33% 25% 34%
==== ==== ====
Income taxes of $4,110,000, $4,891,000, and $4,226,000 were paid
during fiscal 2000, 1999, and 1998, respectively.
The components of the deferred tax assets are as follows (in
thousands):
March 31,
2000 1999
---- ----
Deferred tax assets:
Depreciation and amortization ...... $ 2,097 $ 1,853
Accrued employee benefits........... 907 337
Inventory allowances................ 125 561
Accrued liabilities................. 601 433
State deferred taxes (net of federal
benefits)........................... 120 31
Deferred revenue on shipments to
distributors........................ 319 457
Allowances for doubtful accounts and
sales returns....................... 181 (66)
Manufacturing investment credit..... 233 --
Other............................... 149 109
------- -------
Total deferred tax assets......... $ 4,732 $ 3,715
======= =======
Management has determined that no valuation allowance is required
because, although realization is not assured, the Company has
sufficient taxable income in carryback years to absorb items
deductible in the future for federal tax purposes and anticipates
that its estimated future taxable income will allow the deferred tax
asset for state tax purposes to be fully realized in future years.
The amount of the deferred tax asset that is realizable could be
reduced in the near term if actual results differ significantly from
estimates of future taxable income.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
6. EMPLOYEE BENEFIT PLANS
Profit Sharing Plan -- The Company has a discretionary profit
sharing plan for the benefit of eligible employees. Related
expenses were $1,152,000, $914,000, and $1,299,000 in fiscal 2000,
1999, and 1998, respectively.
Savings and Retirement Plan -- The Supertex Savings and Retirement
Plan allows for employee savings intended to qualify under the
provisions of Section 401 of the Internal Revenue Code. Employees
having at least three months of permanent service may make pretax
contributions of 1% to 20% of qualified compensation, with the
Company matching certain percentages of employee contributions, all
of which are 100% vested. In fiscal years 2000, 1999 and 1998, the
Company's matching contributions were $254,000, $189,000, and
$180,000, respectively.
Stock Option Plan -- The 1991 Stock Option Plan (the Option Plan)
provides for granting incentive stock options to employees, and non-
statutory stock options to employees and consultants. Terms for
exercising options are determined by the Board of Directors, and
options expire at the earlier of the term provided in the Notice of
Grant or upon termination of employment or consulting relationship.
A total of 2,825,715 shares of the Company's common stock were
reserved for issuance under the 1991 Plan. Options granted under the
Plan are granted at the fair market value of the Company's common
stock on the date of grant and generally expire 7 years from the
date of grant or at termination of service, whichever occurs first.
The options generally are exercisable beginning one year from date
of grant and generally vest over a five-year period.
Activity under the Option Plan is as follows (in thousands, except
share and per share data):
Available Option Outstanding Weighted
for Average
Grant Shares Price Per Share Exercise
Price
--------- ---------- ----------------- ---------
Balance, March 31, 1997 479,975 1,006,890 2 3/4 - 19 7/8 8.63
Granted (378,300) 378,300 10 5/8 - 15 1/4 11.96
Exercised (96,770) 2 3/4 - 16 1/2 4.54
Canceled 276,860 (276,860) 3 - 19 7/8 13.02
Balance, March 31, 1998 378,535 1,011,560 2 3/4 - 16 3/4 9.06
Granted (430,500) 430,500 9 5/8 - 11 10.82
Exercised (63,000) 2 3/4 - 10 1/8 4.55
Canceled 93,700 (93,700) 2 7/8 - 16 3/4 12.57
Balance, March 31, 1999 41,735 1,285,360 2 3/4 - 16 3/4 9.62
Authorized 900,000
Grants (377,600) 377,600 13 1/2 - 26 1/16 15.11
Exercised (246,840) 2 3/4 - 12 1/2 6.98
Canceled 156,300 (156,300) 3 1/4 - 16 1/2 10.94
Balance, March 31, 2000 720,435 1,259,820 $ 2 7/8 - 26 1/16 $ 11.62
Stock Compensation -- The Company has adopted the disclosure-only
provisions of SFAS 123. Accordingly, no compensation cost has been
recognized for the 1991 Stock Option Plan.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The options outstanding and currently exercisable by exercise price
under the Option Plan at March 31, 2000 are as follows:
Option Outstanding Options Exercisable
-------------------------------------------------------------
Weighted- Weighted-
Range of Number Average Average Number Weighted-
Exercise Outstanding Remaining Exercise Outstanding Average
Prices Contractual Price Exercise
Life Price
- -----------------------------------------------------------------------------
$2.88 - $10.63 403,000 3.11 $ 8.91 230,860 $ 7.79
$10.75 - $11.00 358,060 6.50 $10.85 26,020 $10.98
$11.13 - $13.50 315,660 5.31 $12.85 51,920 $11.98
$14.00 - $26.06 183,100 6.53 $16.93 4,700 $15.61
- -----------------------------------------------------------------------------
$2.88 - $26.06 1,259,820 5.12 $ 11.62 313,500 $ 8.86
The weighted average fair value of options granted during fiscal
2000, 1999, and 1998 was $7.50 per share, $5.89 per share, and $4.94
per share, respectively. All options were granted at market price
of the Company's common stock on the date of grant. The Company
made option grants prior to fiscal 1996, the effective disclosure
date of SFAS 123. Therefore, the pro forma disclosures may not be
representative of the effects on reported net income or earnings-per-
share for future years.
The fair value of each option grant for the Option Plan is estimated
on the date of grant using the Black-Scholes multiple options
pricing model with the following weighted average assumptions by
year:
2000 1999 1998
---- ---- ----
Risk-free interest rate 5.39 % 5.00 % 5.38 %
Expected term of option
from vest date 0.97 0.61 0.53
Expected volatility 60.00 % 61.00 % 50.30 %
Expected dividend yield -- -- --
Had compensation cost for the Option Plan been determined based on
the fair value at the grant date for the awards consistent with the
provisions of SFAS 123, the Company's net income and net income per
share for the years ended March 31, 2000, 1999 and 1998 would have
been reduced to the pro forma amounts indicated below (in thousands
except per share data):
2000 1999 1998
---- ---- ----
Net Income As reported $8,475 $5,334 $8,817
Pro forma $7,015 $4,261 $7,894
Dilutive As reported $ 0.68 $ 0.44 $0.71
Earnings
per share Pro forma $ 0.56 $ 0.35 $0.64
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
7.COMMITMENTS AND CONTINGENCIES
Operating Leases
The Company leases its four-inch manufacturing facility under an
operating lease that expires in 2001, from a corporation owned by
one of the Company's directors. Under the lease, the Company is
responsible for maintenance costs, including real property taxes,
utilities and other costs. As part of the acquisition of the
Orbit's six inch wafer fabrication operation, the Company assumed an
operating lease for a manufacturing facility. The lease expires on
April 30, 2004 with two (2) options to extend the term of the lease,
each for a
period of five (5) years. Monthly rent during the entire term is
$68,000 which is adjusted annually based on Bureau of Labor
Statistic's Consumer Price Index. The Company is responsible for
maintenance costs, including real property taxes, utilities,
insurance and other costs. In addition, following the acquisition of
the six inch wafer fabrication facility, the Company assumed an
existing equipment operating lease from Orbit Semiconductor. This
operating lease consists of four different lease schedules
representing four groups of equipment. Operating lease expenses were
approximately $773,000 and $129,000 in fiscal years 2000 and 1999,
respectively. Future minimum lease payments under all operating
leases at March 31, 2000 are as follows (in thousands):
Fiscal Year
2001 2002 2003 2004 2005 Total
---- ---- ---- ---- ---- -----
$ 1,788 $ 1,038 $ 816 $ 816 $ 68 $ 4,526
Future sublease income under all operating leases at March 31, 2000
are as follows:
Fiscal Year
2001 2002 2003 2004 2005 Total
---- ---- ---- ---- ---- -----
$ 600 $ 403 -- -- -- $ 1,003
Facilities rental expenses, net of facilities sublease, were
approximately $944,000, $462,000, and $ 315,000 (net of facilities
sublease income of $260,000, $49,000, and $49,000) in fiscal years
2000, 1999, and 1998, respectively. Of the total rental expenses
paid, $388,000, $375,000, and $362,000 were paid to the Company's
director in fiscal 2000, 1999, and 1998 respectively.
In addition to the foregoing, from time to time the Company is
subject to possible claims or assessments from third parties arising
in the normal course of business. Management has reviewed such
possible claims and assessments with legal counsel and believes that
it is unlikely that they will result in a material adverse impact on
the Company's financial position or results of operations.
8. SEGMENT INFORMATION
The Company operates in one business segment. The Company's
principal markets are in the United States, Europe and Asia.
Following is a summary of the geographic information related to
revenues for the years ended March 31, 2000, 1999, and 1998:
(in thousands) 2000 1999 1998
Revenues
United States $ 45,148 $ 24,608 $ 24,595
Europe 9,372 11,379 10,732
Asia 14,790 12,215 13,338
Other 1,528 2,519 4,041
-------- -------- --------
Total Revenue $ 70,838 $ 50,721 $ 52,706
======== ======== ========
International sales are entirely comprised of export sales. The
Company's assets are located in the United States. The Company does
not segregate information related to operating income generated by
its export sales.
SUPERTEX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
SCHEDULE II
SUPERTEX, INC.
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Balance at Charged to Balance at
Beginning Costs and Write-Off End
of Period Expenses of Accounts of Period
Year ended March 31, 1998
Allowance for sales returns......$ 377 $ 1,333 $1,167 $ 543
Allowance for doubtful accounts.. 148 240 231 157
Inventory allowances............. 644 277 47 874
Year ended March 31, 1999
Allowance for sales returns......$ 543 $ 1,932 $2,102 $ 373
Allowance for doubtful accounts.. 157 485 (5) 647
Inventory allowances............. 874 1,300 727 1,447
Year end March 31, 2000
Allowance for sales returns......$ 373 2,975 2,503 $ 845
Allowance for doubtful accounts... 647 175 301 521
Inventory allowances......... 1,447 (458) 133 856
SUPERTEX, INC.
EXHIBIT INDEX
(The Registrant will furnish to any shareholders who so request a
copy of this Annual Report on Form 10-K and any Exhibit listed
below, provided that the Registrant may require payment of a
reasonable fee not to exceed its expense in furnishing such
information.)
ExhibitExhibit Description
2.1(1) Agreement for purchases and sale of assets by and between
Supertex, Inc. and Orbit Semiconductor dated January 16,
1999.
3.1(2) Restated Articles of Incorporation of Registrant filed May
21, 1980.
3.2(2) Certificate of Amendment of Articles of Incorporation filed
April 16, 1981.
3.3(2) Certificate of Amendment of Articles of Incorporation filed
September 30, 1983.
3.4(5) Bylaws of Registrant, as amended.
10.2(2) Lease for 1225 and 1231 Bordeaux Drive, Sunnyvale,
California, dated January 25, 1991, between Fortuna Realty
Company, as Lessor, and Registrant, as Lessee.
10.2a Lease for 71 Vista Montana, San Jose, California, dated
December 7, 1988, between Sobrato Development Companies #871,
a California Limited Partnership, as Lessor, and Paradigm
Technology, Inc., a California Corporation, as Lessee.
10.2b Lease Assignment agreement for 71 Vista Montana, San Jose,
California, dated February 1, 1999 among Orbit Semiconductor,
as seller, Sobrato Development Companies #871, as landlord,
and Supertex, Inc., as buyer.
10.2c Master Lease Agreement #06714-00300 dated September 15, 1995
between NationsBanc Leasing Corporation, as Lessor, and Orbit
Semiconductors, Inc., as lessee.
10.2d Transfer and Assumption Agreement for leased equipment
located at 71 Vista Montana, San Jose, California dated
January 22, 1999 by and among Orbit Semiconductor, Inc., as
Transferor, Supertex, Inc., as Transferee, and NationsBanc
Leasing Corporation, as Lessor.
10.6(2) 1981 Stock Option Plan, as amended, with form of stock
option agreement.
10.6a(5) 1991 Stock Option Plan, as amended, with form of stock
option agreement.
10.6b(6) 1991 Stock Option Plan, as amended, with form of stock
option agreement.
10.7(2) Profit Sharing Plan.
10.21(3) Certificate of Amendment of Articles of Incorporation filed
October 14, 1988.
10.22(4) Agreement with Texas Instruments Inc. dated May 31, 1991.*
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
24.1 Power of Attorney.
27.1 Financial Data Schedule.
(1) Incorporated by reference to the exhibit of the same number
filed with current report on form 8-K dated January 19, 1999.
(2) Incorporated by reference to exhibit of same number of
Registrant's Registration Statement on Form S-1
(File No. 2-86898), which became effective December 6, 1983.
(3) Incorporated by reference to exhibit filed with
Quarterly Report on Form 10-Q for period ended October 1,
1988.
(4) Incorporated by reference to exhibit filed with
Annual Report on Form 10-K for year ended March 31,
1991.
(5) Incorporated by reference to exhibit included in Registrant's
Registration Statement on Form S-8 (File No. 33-43691) which
became effective September 1, 1995.
(6) Incorporated by reference to exhibit included in Registrant's
Registration Statement on Form S-8 (File No. 33-43691) which
became effective September 29, 1999.
* Confidential treatment of portions of this exhibit was
granted by order dated August 12, 1991.