UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2003
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 (No Fee Required)
Commission File No. 0-12718
SUPERTEX, INC.
(Exact name of Registrant as specified in its Charter)
California 94-2328535
(State or other jurisdiction of (IRS Employer Identification #)
incorporation or organization)
1235 Bordeaux Drive
Sunnyvale, California 94089
(Address of principal executive offices)
Registrant's Telephone Number, Including Area Code: (408) 222-8888
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
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes X No
The total number of shares outstanding of the Registrant's common stock as of
August 11, 2003 were 12,715,404
Total number of pages: 16
SUPERTEX, INC.
QUARTERLY REPORT - FORM 10Q
Table of Contents Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Unaudited Condensed Consolidated Statements of Income.............3
Unaudited Condensed Consolidated Balance Sheets...................4
Unaudited Condensed Consolidated Statements of Cash Flows.........5
Notes to Unaudited Condensed Consolidated Financial Statements....6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................9
Item 3. Quantitative and Qualitative Disclosures About Market
Risk and Interest Rate Risk......................................12
Item 4. Controls and Procedures......................................13
PART II- OTHER INFORMATION
Item 1. Legal Proceedings............................................13
Item 2. Changes in Securities and Use of Proceeds....................13
Item 3. Defaults Upon Senior Securities..............................13
Item 4. Submission of Matters to a Vote of Security Holders..........13
Item 5. Other Information............................................13
Item 6. Exhibits and Reports on Form 8-K.............................13
Signatures .............................................................14
Item 1. Financial Statements
SUPERTEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share amounts)
Three-months Ended,
June 30, 2003 June 30, 2002
Net sales $ 12,479 $ 13,277
Cost and expenses:
Cost of sales 7,289 8,849
Research and development 2,230 2,318
Selling, general and administrative 2,390 1,835
---------- ----------
Total costs and expenses 11,909 13,002
---------- ----------
Income from operations 570 275
Interest income 264 244
Other income, net 290 7
---------- ----------
Income before provision for
income taxes 1,124 526
Provision for income taxes 348 179
---------- ----------
Net income $ 776 $ 347
========== ==========
Net income per share:
Basic $ 0.06 $ 0.03
Diluted $ 0.06 $ 0.03
Shares used in per share computation:
Basic 12,686 12,575
Diluted 12,907 12,935
See accompanying Notes to Unaudited Condensed Consolidated Financial
Statements.
SUPERTEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, 2003 March 31, 2003
ASSETS
Current assets:
Cash and cash equivalents $ 58,695 $ 60,931
Short-term investments 9,314 3,945
Trade accounts receivable, net of
allowance of $595 and $615 at June 30, 2003
and March 31, 2003, respectively 6,981 10,134
Inventories 15,385 14,582
Prepaid expenses and other current assets 474 575
Deferred income taxes 4,030 4,030
---------- ----------
Total current assets 94,879 94,197
Property, plant and equipment, net 11,565 12,104
Other assets 97 97
Deferred income taxes 2,273 2,273
---------- ----------
TOTAL ASSETS $ 108,814 $ 108,671
LIABILITIES
Current liabilities:
Trade accounts payable $ 2,598 $ 3,572
Accrued salaries and employee benefits 6,522 6,784
Other accrued liabilities 412 485
Deferred revenue 2,245 2,001
Income taxes payable 3,171 3,304
---------- ----------
Total current liabilities 14,948 16,146
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 12,707 and
12,658 shares at June 30, 2003 and March 31,
2003, respectively 29,610 29,045
Retained earnings 64,256 63,480
---------- ----------
Total shareholders' equity 93,866 92,525
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 108,814 $ 108,671
========== ==========
See accompanying Notes to Unaudited Condensed Consolidated Financial
Statements.
SUPERTEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Three-months Ended,
June 30, 2003 June 30, 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 776 $ 347
---------- ----------
Non-cash adjustments to net income:
Depreciation 1,060 1,290
Provision for doubtful accounts and sales returns 650 827
Provision for excess and obsolete inventories 216 4
Changes in operating assets and liabilities:
Short-term investments, categorized as trading (369) --
Trade accounts receivable 2,503 (116)
Inventories (1,019) 1,026
Prepaid expenses and other current assets 101 414
Trade accounts payable and accrued expenses (1,309) (2,140)
Income taxes payable (133) 1,227
Deferred revenue 244 (6)
---------- ----------
Total adjustments 1,944 2,526
---------- ----------
Net cash provided by operating activities 2,720 2,873
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (536) (1,007)
Proceeds from disposal of property and equipment 15 --
Purchases of short-term investments, categorized
as available for sale (5,000) --
---------- ----------
Net cash used in investing activities (5,521) (1,007)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options and
employee stock purchase plan 565 526
---------- ----------
Net cash provided by financing activities 565 526
---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (2,236) 2,392
CASH AND CASH EQUIVALENTS:
Beginning of period 60,931 52,492
---------- ----------
End of period $ 58,695 $ 54,884
========== ==========
Supplemental cash flow disclosures:
Income taxes paid $ 1,010 $ 5
See accompanying Notes to Unaudited Condensed Consolidated Financial
Statements.
SUPERTEX, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Basis of Presentation
In the opinion of management, the unaudited condensed consolidated financial
statements for the quarters ended June 30, 2003 and 2002 include all
adjustments (consisting of normal recurring adjustments) necessary for fair
presentation of the consolidated financial position, results of operations,
and cash flows for those periods in accordance with accounting principles
generally accepted in the United States of America.
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures which are made are adequate to make the
information presented not misleading. In particular, the year-end condensed
balance sheet data was derived from audited financial statements, but does not
include all disclosures required by accounting principles generally accepted in
the United States of America. These financial statements should be read in
conjunction with the audited consolidated financial statements of Supertex,
Inc. for the fiscal year ended March 31, 2003, which were included in the
Annual Report on Form 10-K.
Interim results are not necessarily indicative of results for the full fiscal
year. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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 as well as the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates, and such differences may be material to the
financial statements.
The financial statements have been prepared on a consolidated basis. The
condensed consolidated financial statements include the accounts of Supertex,
Inc. and its subsidiary. All significant intercompany balances have been
eliminated on consolidation.
For purposes of presentation, the Company labels its annual accounting period
end as March 31 and its interim quarterly periods as ending on the last day of
the corresponding month. The Company, in fact, operates and reports based on
quarterly periods ending on the Saturday closest to month end. The 13-week
first quarter of fiscal 2003 ended on June 29, 2002, and the 13-week first
quarter of fiscal 2004 ended on June 28, 2003.
Note 2 - Inventories
Inventories consisted of (in thousands):
June 30, 2003 March 31, 2003
Raw materials................ $ 1,684 $ 1,348
Work-in-process.............. 8,771 9,341
Finished goods............... 4,930 3,893
--------- ---------
$ 15,385 $ 14,582
Note 3 - 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 did
not differ from net income for all periods presented.
Note 4 - Net Income per Share
Basic earnings per share ("EPS") is computed as net income divided by the
weighted average number of common shares outstanding for the period. Diluted
EPS reflects the potential dilution that could occur from common shares
issuable through stock options, warrants, and other convertible securities. A
reconciliation of the numerator and denominator of basic and diluted earnings
per share is provided as follows (in thousands, except per share amounts).
Three-months Ended June 30,
2003 2002
BASIC:
Net income $ 776 $ 347
--------- ---------
Weighted average shares outstanding for the period 12,686 12,575
--------- ---------
Net income per share $ 0.06 $ 0.03
--------- ---------
DILUTED:
Net income $ 776 $ 347
--------- ---------
Weighted average shares outstanding for the period 12,686 12,575
Dilutive effect of stock options 221 360
--------- ---------
Total 12,907 12,935
--------- ---------
Net income per share $ 0.06 $ 0.03
Options to purchase 447,130 shares of the Company's common stock at an average
price of $27.93 per share, and 435,899 shares at an average price of $29.64 per
share at June 30, 2003 and June 30, 2002, respectively, were outstanding but
were not included in the computation of diluted earnings per share because
their effect would have been anti-dilutive.
Note 5 - Stock-based Compensation
The Company accounts for stock-based employee compensation arrangements using
the intrinsic value method as described in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25") and Financial
Accounting Standards Board Interpretation No. 44 "Accounting for Certain
Transaction Involving Stock Compensation" ("FIN 44"). Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
fair value of the Company's stock at the date of grant over the stock option
exercise price. The Company accounts for stock issued to non-employees in
accordance with the provisions of Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") and
Emerging Issues Task Force Consensus No. 96-18, "Accounting for Equity
Instruments that are offered to other than employees for acquiring or in
conjunction with selling goods or services" ("EITF 96-18"). Under SFAS No. 123
and EITF 96-18, stock option awards issued to non-employees are accounted for
at their fair value, re-measured at each period end until a commitment date is
reached, which is generally the vesting date.
Had the Company recorded compensation costs for stock options issued to
employees under the Company's stock options plans and Employee Stock Purchase
Plan (ESPP) based on the fair value at the grant date for the awards consistent
with the provisions of SFAS 123, the net income and net income per share for
the quarter ended June 30, 2003 and 2002 would have been reduced to the pro
forma amounts indicated as follows:
Three-months Ended June 30,
(in thousands except per share amount) 2003 2002
Net income As reported $ 776 $ 347
Add: Stock-based employee compensation
expense included in reported net
income, net of tax -- --
Deduct: Stock-based employee compensation
expense determined under fair value
based method, net of tax (658) (1,059)
------ ------
Pro forma $ 118 $ (712)
====== ======
Basic earnings(loss) per share
As reported $ 0.06 $ 0.03
Pro forma $ 0.01 $(0.06)
Diluted earnings(loss) per share
As reported $ 0.06 $ 0.03
Pro forma $ 0.01 $(0.06)
To compute the estimated fair value of each option grant under the Option
Plans and employee's purchase rights under the ESPP, the Black-Scholes option
pricing model was used with the following weighted average assumptions:
Employee Stock Option Plans ESPP
Three-months Ended June 30 Three-months Ended June 30
2003 2002 2003 2002
Risk-free interest rate 1.05% 3.52% 1.23% 2.05%
Expected term of option from
vest date (years) 1.48 1.49 0.50 0.50
Expected volatility .98 1.45 0.43 .53
Expected dividends -- -- -- --
Note 6 - Investments
As of June 30, 2003, the Company's short-term investments consisted of
investments held by the Company's Supplemental Employee Retirement Plan of
$4,314,000, which are categorized as trading securities, and a time certificate
of deposit of $5,000,000, which was purchased in June 2003 and is categorized
as available for sale. At March 31, 2003, the Company's short-term investments
consisted entirely of investments held by the Company's Supplemental Employee
Retirement Plan.
Note 7 - Recent Accounting Pronouncements
In November 2002, the Emerging Issues Task Force reached a consensus on Issue
No. 00-21, Revenue Arrangements with Multiple Deliverables, ("EITF 00-21").
EITF 00-21 provides guidance on how to account for arrangements that involve
the delivery or performance of multiple products, service and/or rights to use
assets. The provisions of EITF 00-21 will apply to revenue arrangements
entered into in fiscal periods beginning after June 15, 2003. The Company
does not believe that adoption of EITF 00-21 will have a material impact on its
financial position or results of operations.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity"("SFAS 150").
SFAS 150 establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scopeas a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. SFAS 150 is effective
for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003. The Company does not believe the adoption of SFAS 150
will have a material impact on its financial position or results of operations.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Cautionary Statement Regarding Forward Looking Statements
This Form 10-Q includes forward-looking statements. These forward-looking
statements are not historical facts, and are based on current expectations,
estimates, and projections about our industry, our beliefs, our assumptions,
and our goals and objectives. Words such as "anticipates", "expects",
"intends", "plans", "believes", "seeks", and "estimates ", and variations of
these words and similar expressions, are intended to identify forward-looking
statements. Examples of such forward-looking statements in this Form 10-Q are
our plans to continue in the future our current level of R&D investment on new
product development as a percent of net sale; our plan to not add capacity in
the future and to spend approximately $2,821,000 for capital acquisitions
during fiscal 2004; and our anticipation that our available funds and expected
cash generated from operations will be sufficient to meet cash and working
capital requirements through at least the next twelve months. These statements
are only predictions not a guaranty 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 from those expressed or forecasted in the forward-looking
statements. These risks and uncertainties include that the demand for our
products or results of our product development change such that it would be
unwise not to decrease research and development and that some of our equipment
will not be unexpectedly damaged or obsoleted, thereby requiring replacement
as well as those described in "Risk Factors" under Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operation" in
our Annual Report of Form 10-K for the fiscal year ended March 31, 2003.
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.
Critical Accounting Policies
We described our critical accounting policies in Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," of
our Annual Report on Form 10-K for the year ended March 31, 2003.
Our critical accounting policies are those that are most important to the
portrayal of our financial condition and results of operations, and require our
management's significant judgments and estimates and such consistent
application fairly depicts our financial condition and results of operations
for all periods presented.
Critical accounting policies affecting us and the critical estimates we made
when applying them have not changed materially since March 31, 2003.
Overview
Supertex designs, develops, manufactures, and markets high voltage
semiconductor devices, including analog and mixed signal integrated circuits
utilizing state-of-the-art high voltage DMOS, HVCMOS and HVBiCMOS analog and
mixed signal technologies. We supply standard and custom high voltage
interface products primarily for use in the telecommunications (telecom),
imaging, medical electronics, and industrial markets. We also provide wafer
foundry services for the manufacture of integrated circuits for customers
using customer-owned designs and mask toolings.
Results of Operations
Net Sales
Net sales for the quarter ended June 30, 2003 were $12,479,000, a 6% decrease
compared to $13,277,000 for the same quarter of the prior fiscal year, and a
14% decrease from $14,530,000 of the prior quarter. Our sales for the first
quarter were adversely affected by the continued global economic slowdown and
the reduced demand for our products in all of our major markets: medical
electronics, imaging and telecom. In particular, medical electronics product
sales decreased by $1,048,000 or 20% and imaging products decreased by $724,000
or 14% for the quarter ended June 30, 2003 compared to the quarter ended March
31, 2003. The quarter-over-quarter decline in demand for our medical products
was largely the result of a reduced demand for our components by
our largest medical product customer which moved its third party assembly
offshore and therefore had to qualify pilot builds. For our imaging products,
the quarter-over-quarter decline in demand primarily resulted from delays in
the needed financing of a large consumer imaging customer until the end of the
quarter, causing the customer to purchase less than expected during the
quarter. Shipments to that customer have since increased.
As a percentage of total net sales for the quarter ended June 30, 2003, sales
to customers in the medical electronics, imaging, and telecommunications
markets represented 34%, 37%, and 21% of total net sales, respectively,
compared to 33%, 33% and 22% for the same quarter of the prior fiscal year.
Sales to customers in other markets accounted for 8% and 12% of the total net
sales for both the quarters ended June 30, 2003 and 2002 respectively.
Net sales to international customers for the quarter ended June 30, 2003 were
$4,193,000, or 34% of the Company's net sales as compared to $4,092,000, or 31%
of the net sales for the same period of the prior fiscal year.
Gross Profit
Gross profit represents net sales less cost of sales. Cost of sales includes
the cost of purchasing raw silicon wafers, cost associated with assembly,
packaging, test, quality assurance and product yields, the cost of personnel,
facilities, and equipment associated with manufacturing support and charges for
excess inventory.
As a percent of sales, the Company's gross margin was 42% for the three month
period ended June 30, 2003, compared with 33% for the same period of the prior
fiscal year. The gross margin for the quarter ended June 30, 2002 was
adversely affected by reduced factory activity which resulted in under-absorbed
manufacturing overhead.
Research and Development (R&D)
Research and development (R&D) expenses, which include payroll and benefits,
processing costs and process transfer costs, decreased 4% to $2,230,000 for the
quarter ended June 30, 2003 as compared to $2,318,000 for the same quarter of
the prior fiscal year. The moderate dollar decrease in R&D expense for the
quarter ended June 30, 2003 is primarily due to the reduction in software
costs.
As a percent of sales, our R&D expenses were 18% of net sales for the quarter
ended June 30, 2003 as compared to 17% for the same quarter of the prior fiscal
year. We plan to continue this level of R&D investments as a percent of net
sales.
Selling, General and Administrative (SG&A)
Selling, general and administrative expenses, which include commissions,
payroll and benefits, increased by 30% to $2,390,000 or 19% of net sales for
the quarter ended June 30, 2003 as compared to $1,835,000 or 14% net sales in
the same quarter of the prior fiscal year. The increase of $555,000 was
attributed to an increase in payroll and benefits of $296,000, an increase in
bad debt expense of $174,000, an increase in legal expenses of $171,000 offset
by a decrease in sales commissions expense of $74,000. The increase in
payroll and benefits expenses was primarily from that portion of the increase
in accrued compensation for the Company's Supplemental Employee Retirement
Plan resulting from the increase in value of the plan assets. The increase in
bad debt expense for the quarter was attributed to a lower net bad debt
expense in the first quarter of fiscal 2002 resulting from a successful
collection of a previously reserved receivable in that quarter. The increase
in the legal expense was due to a credit of $224,000 in the first quarter of
fiscal 2002 following the favorable settlement of a claim by a customer. The
decrease in sales commissions expense resulted from a lower commissionable
sales.
Interest and Other Income, net
Interest income and other income, net was $554,000 and $251,000 when aggregated
together for the quarters ended June 30, 2003 and 2002, respectively.
Interest income for the quarter ended June 30, 2003 was $264,000 compared to
$244,000 for the same quarter of prior fiscal year. The moderate increase in
interest income is attributable to a larger average cash, cash equivalent and
short-term investments balance in the current quarter compared to the same
quarter of the prior fiscal year, which was partially offset by lower interest
rates.
Other income, net for the three-month period ended June 30, 2003 was $290,000
compared with $7,000 for the same period of last fiscal year. The increase was
primarily due to the increase in fair market value of investments held by the
Company's Supplemental Employee Retirement Plan of $248,000.
Provision for Income Taxes
The Company's effective tax rate for the quarter ended June 30, 2003 was 31%,
compared to 34% for the same quarter of prior fiscal year. The reduction in
effective tax rate was primarily due to a favorable change in geographic mix of
income.
Liquidity and Capital Resources
On June 30, 2003, the Company had $68,009,000 in cash, cash equivalents, and
short-term investments, compared with $64,876,000 on March 31, 2003. The
Company anticipates that available sources of funds including cash, cash
equivalents, short term investments, and expected cash to be generated from
operations will be sufficient to meet cash and working capital requirements
through at least the next twelve months.
The decrease in cash and cash equivalents of $2,236,000 from $60,931,000 at
March 31, 2003 to $58,695,000 at June 30, 2003 is due to cash used in investing
activities of $5,521,000, offset by cash flows from operating activities of
$2,720,000, and cash flows from financing activities of $565,000. Our primary
source of funds for the quarter ended June 30, 2003 has been net cash generated
from operating activities of $2,720,000.
Net operating cash flows were the result of the following items:
* Net income of $776,000;
* Non-cash charges for depreciation of $1,060,000;
* A decrease in net trade accounts receivable of $3,153,000 including a
non-cash reduction of $650,000 for the provisions for doubtful accounts and
sales returns and a net decrease in gross accounts receivable of $2,503,000
primarily due to lower sales;
* A decrease in trade accounts payable and accrued expenses of $1,309,000
comprised primarily of a decrease in trade accounts payable of $974,000 which
resulted from a decrease in operating expenses and equipment purchases;
* An increase in net inventory of $803,000 consisting of an increase in
inventory of $1,019,000 due to a shortfall of our anticipated turns business
partially offset by a non-cash charge for the provision for excess and
obsolescence of $216,000;
* An increase in short-term investments categorized as trading securities of
$369,000. These investments are held by the Company's Supplemental Employee
Retirement Plan. The increase is due to additional employee contributions
invested during the period as well as an increase in the fair market value of
plan assets during the period; and
* A decrease in income taxes payable of $133,000.
Net cash used in investing activities in the three months ended June 30, 2003
was $5,521,000, which included purchases of short-term investment of $5,000,000
and equipment purchases of $536,000, offset by proceeds from disposal of
property and equipment of $15,000.
Net cash provided by financing activities in the three months ended June 30,
2003 was $565,000, which consisted of proceeds from employee stock purchases of
$327,000 and stock options exercises of $238,000.
The Company expects to spend approximately $2,821,000 for capital acquisitions
during fiscal 2004, which is much less than prior fiscal years because most of
the upgrades to our fab and our test operations have been completed, and we do
not plan to add any capacity in the near future.
The Company has commitments for non-cancelable operating leases. Future
minimum lease payments and sublease income under all non-cancelable operating
leases at June 30, 2003 are as follows (in thousands):
Fiscal Years Ending March 31 Operating Lease Sublease Income
2004 (remaining nine months) $ 922 $ 488
2005 1,104 370
2006 1,047 336
2007 1,051 336
2008 761 155
Thereafter -- --
-------- -------
$ 4,885 $ 1,685
Item 3. - Quantitative and Qualitative Disclosures About Market Risk and
Interest Rate Risk.
Interest Rate Sensitivity
The Company is not likely 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. It 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. As of June 30, 2003, the Company
maintained its funds primarily in money market funds and it plans to continue
to invest a significant portion of its existing cash in interest bearing money
market funds and other short-term debt securities with maturities of less than
a year.
Item 4. - Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
The Company's principal executive officer and principal financial officer
has evaluated the Company's disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this Form 10-Q and have determined that they are reasonable
taking into account the totality of the circumstances.
(b) Changes in Internal Control over Financial Reporting
There were no changes in the Company's internal control over financial
reporting that occurred during the period covered by this Form 10-Q that
have materially affected, or are reasonably likely to materially affect
such control.
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
None
Item 2. - Changes in Securities and Use of Proceeds
None
Item 3. - Defaults Upon Senior Securities
None
Item 4. - Submission of Matters to a Vote of Security Holders
None
Item 5. - Other Information
None
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 31, Rule 13(a)-14(a)/15(d)-14(a) Certification by Henry C. Pao
Exhibit 32, Section 1350 Certification of Henry C. Pao
(b) Reports on Form 8-K
On July 14, 2003, the Company filed a Report on Form 8-K, dated July
14, 2003, furnishing under Item 12, a July 14, 2003 press release announcing
the first fiscal quarter results. (Such press release is not incorporated by
reference herein or deemed "filed" within the meaning of Section 18 of the
Securities Act.)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUPERTEX, INC.
(Registrant)
Date: August 12, 2003
By: /s/ Henry C. Pao
----------------------
Henry C. Pao, Ph.D.
President
(Principal Executive and Financial Officer)