International Rectifier Reports Fourth Quarter and Full Year Fiscal 2014 Results

EL SEGUNDO, Calif. — (BUSINESS WIRE) — August 20, 2014 — International Rectifier Corporation (NYSE: IRF) today announced financial results for the fourth quarter (ended June 29, 2014) of its fiscal year 2014.

On August 20, 2014, International Rectifier Corporation entered into a definitive agreement with Infineon Technologies AG under which Infineon has agreed to acquire International Rectifier for $40 per share in an all-cash transaction valued at approximately $3.0 billion. In anticipation of this transaction which is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approval, International Rectifier will not conduct a fourth quarter results conference call nor issue financial guidance for the upcoming quarter. International Rectifier is also discontinuing its share repurchase program.

Revenue for the June quarter was $297.6 million, a 10.5% increase compared to $269.3 million in the prior quarter and a 7.6% increase from $276.5 million in the prior year quarter. GAAP net income for the fourth quarter was $12.9 million, or $0.18 per fully diluted share compared to GAAP net income of $19.1 million, or $0.26 per fully diluted share, in the prior quarter and GAAP net loss of $6.1 million, or $0.09 per fully diluted share in the prior year quarter.

Revenue for fiscal year 2014 was $1,106.6 million, a 13.3% increase from $977.0 million in the prior fiscal year. Net income for fiscal year 2014 was $58.7 million or $0.81 per fully diluted share compared with a net loss of $88.8 million or $1.28 per fully diluted share for fiscal year 2013.

“Fourth quarter revenue exceeded our expectations, increasing significantly as all of our business segments posted sequential growth,” stated President and Chief Executive Officer Oleg Khaykin. “In addition, we reduced inventory by about 5% bringing our inventory weeks to 15.6, the lowest level in four years and below our target level of 16 weeks. Our non-GAAP operating income increased to 8.2% of revenue in the fourth quarter and we increased our cash balance by $67.7 million.”

GAAP gross margin for the fourth quarter was 35.6% compared to 37.2% in the prior quarter and 30.0% in the prior year quarter. GAAP operating income for the fourth quarter was $20.7 million compared to operating income of $19.2 million in the prior quarter and operating income of $0.2 million in the prior year quarter.

Cash, cash equivalents and marketable investments increased $67.7 million and totaled $610.4 million at the end of the fourth quarter, including restricted cash of $1.4 million.

Cash provided by operating activities for the quarter was $70.3 million and free cash flow was $62.0 million.

Non-GAAP Results
Non-GAAP net income for the fourth quarter was $21.9 million, or $0.30 per fully diluted share compared to non-GAAP net income of $19.7 million, or $0.27 per fully diluted share in the prior quarter and non-GAAP net loss of $1.2 million, or $0.02 per fully diluted share in the prior year quarter.

Non-GAAP gross margin for the fourth quarter was 35.7% compared to non-GAAP gross margin of 36.3% in the prior quarter and non-GAAP gross margin of 30.2% in the prior year quarter. Non-GAAP operating income for the fourth quarter was $24.3 million compared to non-GAAP operating income of $20.1 million in the prior quarter and non-GAAP operating income of $4.5 million in the prior year quarter.

Non-GAAP net income for fiscal year 2014 was $70.2 million or $0.97 per fully diluted share compared with a non-GAAP net loss of $62.6 million or $0.90 per fully diluted share for fiscal year 2013.

The non-GAAP results the Company provides exclude the effects of accelerated depreciation, asset impairment, inventory write-offs associated with our El Segundo fab closure, restructuring costs, severance costs, impairment of goodwill, amortization of intangibles, the associated net tax effects of these items, and discrete tax provisions and benefits. The Company excludes any tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability.

A reconciliation of these non-GAAP measures to the Company’s reported net income (loss), gross margin (referred to as gross profit in attached schedules) and operating income (loss) in accordance with U.S. GAAP are set forth in the attached schedules below and on our web-site at www.investor.irf.com.

Segment Table Information/Customer Segments
The business segment tables included with this release for the Company’s fiscal quarters ended June 29, 2014, March 30, 2014, and June 30, 2013, respectively, reconcile revenue and gross margin for the Company’s segments to the consolidated total amounts of such measures for the Company.

Annual Report on Form 10-K
The Company expects to file its Annual Report on Form 10-K for the 2014 fiscal year with the Securities and Exchange Commission by Thursday, August 21, 2014. This financial report will be available for viewing and download at http://investor.irf.com.

Conference Call Information: On August 20, 2014, International Rectifier Corporation entered into a definitive agreement with Infineon Technologies AG under which Infineon has agreed to acquire International Rectifier for $40 per share in an all-cash transaction valued at approximately $3.0 billion. In anticipation of this transaction which is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approvals, International Rectifier will not conduct a fourth quarter results conference call nor issue financial guidance for the upcoming quarter.

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