IXYS Corporation Reports Increased Profits For The September 2016 Quarter

Quarter-End Highlights:
  • Gross profit margin for the quarter ended September 30, 2016 was 32.4%, in line with gross profit margin for the September 2015 quarter. Importantly, the gross profit margin increased by 260 basis points from 29.8% gross profit margin in the June 2016 quarter. 
  • Net income of $3.9 million for the September 2016 quarter was an increase of $662,000, or 20.2%, as compared to $3.3 million of net income in the prior year comparable quarter. Sequentially, the September 2016 quarter net income increased by $916,000, or 30.3%, as compared to $3.0 million of net income in the June 2016 quarter.

LEIDEN, Netherlands and MILPITAS, Calif., Nov. 02, 2016 (GLOBE NEWSWIRE) -- IXYS Corporation (NASDAQ:IXYS), an international power semiconductor and IC company, today announced financial results for its second fiscal quarter ended September 30, 2016.  

Net revenues for the quarter were $78.6 million versus $80.3 million in net revenues for the September 2015 quarter. For the six months ended September 30, 2016, IXYS reported net revenues of $159.3 million, as compared to net revenues of $162.3 million for the same period in the prior fiscal year.

"We are pleased with the increased profitability of IXYS while investing in new products and improved manufacturing efficiencies. We continue to penetrate new applications in the transportation, medical and IoT markets," said Dr. Nathan Zommer, Founder and CEO of IXYS. "IXYS has focused on designing higher margin products, benefitting from The World of IXYS TM marketing campaign. Today, we offer the total customer solution, from microcontrollers to driver ICs to power semiconductors, which may continue to drive better gross margins going forward."

Net income for the quarter ended September 30, 2016 was $3.9 million, or $0.12 per diluted share, an increase of $662,000, or 20.2%, as compared to net income of $3.3 million, or $0.10 per diluted share, for the September 2015 quarter. Sequentially, net income in the September 2016 quarter increased by $916,000, or 30.3%, from net income of $3.0 million in the June 2016 quarter. The September 2016 quarter non-GAAP net income, which excludes the impact of charges for the amortization of acquired intangible assets and stock compensation, was $5.1 million, or $0.16 per diluted share, as compared to the non-GAAP net income of $5.2 million, or $0.16 per diluted share, for the same period in the prior fiscal year.

Net income for the six months ended September 30, 2016 was $7.0 million, or $0.22 per diluted share, an increase of $696,000, or 11.1%, as compared to net income of $6.3 million, or $0.19 per diluted share, for the same period in the prior fiscal year. For the six months ended September 30, 2016, non-GAAP net income, which excludes the impact of charges for the amortization of acquired intangible assets and stock compensation, was $9.7 million, or $0.30 per diluted share, as compared to the non-GAAP net income of $10.2 million, or $0.31 per diluted share, for the same period in the prior fiscal year.

Gross profit for the quarter ended September 30, 2016 was $25.5 million, or 32.4% of net revenues, as compared to gross profit of $26.0 million, or 32.4% of net revenues, for the same quarter in the prior fiscal year.  On a sequential basis, the gross profit margin increased by 260 basis points from 29.8% of net revenues, or $24.0 million of gross profit, in the June 2016 quarter. Gross profit for the six months ended September 30, 2016 was $49.4 million, or 31.0% of net revenues, as compared to the gross profit of $51.6 million, or 31.8% of net revenues, for the same period in the prior fiscal year.

Adjusted EBITDA was $10.8 million for the September 2016 quarter and $20.4 million for the six months ended September 30, 2016.

Cash and cash equivalents totaled $153.8 million at September 30, 2016, after generating $5.9 million in cash from operations during the quarter.

"IXYS is focused on three major objectives: increase gross profit margins, invest in research and development to meet evolving market trends and decrease expenses. Our ability to control internal strategy mitigates unpredictable external forces, namely, global market activity. We have confidence that our strategic growth initiatives, in combination with our operational efficiencies, will lead to further success in the months ahead," stated Mr. Uzi Sasson, CEO and President of IXYS. "Therefore, we expect revenues in the December 2016 quarter to increase slightly from the September 2016 quarter."

Non-GAAP Information

Included above and within the attached schedules are certain non-GAAP financial figures. The company incurred non-cash charges, including those associated with the amortization of intangible assets and stock compensation. Adjusting the net income to exclude the impact of the amortization of intangible assets and stock compensation expenses and the applicable tax at the effective tax rate for the respective periods results in a financial presentation for the company without the effect of these non-cash charges. Similarly, adjusted EBITDA reflects the exclusion of depreciation and amortization, stock compensation expenses, interest and taxes, and may serve as an indication of the company's ability to service its debt. Management believes non-GAAP net income, non-GAAP net income per share and adjusted EBITDA are useful measures of operating performance. However, the non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income and net income per share or other financial measures prepared in accordance with GAAP.

These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Other companies in our industry may calculate non-GAAP net income, non-GAAP net income per share and adjusted EBITDA differently than we do, limiting their usefulness as comparative measures.

About IXYS Corporation

Since its founding in Silicon Valley, IXYS Corporation has been developing technology-driven products to improve energy conversion efficiency, generate clean energy, improve automation, and provide advanced products for the transportation, medical and telecommunication industries. IXYS, with its subsidiaries, is a worldwide pioneer in the development of power semiconductors, solid state relays, high voltage integrated circuits, and microcontrollers that are necessary in conserving energy and in reducing the world's dependence on fossil fuels.

Diminishing natural resources, demand for renewable energy and environmental directives for energy efficiency represent a significant challenge. IXYS' power semiconductors and mixed-signal integrated circuits play a vital role in reducing energy costs and consumption by optimizing the energy efficiency of everyday products. IXYS semiconductors are also key to developments of new medical devices and systems that provide unique solutions in diagnostics and therapy for the leading medical equipment OEMs worldwide. With an end-customer base of over 3,500 telecommunications, transportation, industrial, medical and consumer companies, IXYS is a worldwide recognized provider of advanced semiconductors.

Additional information may be obtained by visiting IXYS' website at http://www.ixys.com, or by contacting the company directly.

Safe Harbor Statement

The foregoing press release contains forward-looking statements, including those related to new applications, better gross margins, our three major objectives, success in the months ahead and our revenues in the December 2016 quarter. Actual results may vary materially from those contained in the forward-looking statements, due to changes in customer delivery schedules, the cancellation of orders, an unanticipated decline in our business, increased competition, cash flow difficulties, unanticipated technological hurdles, manufacturing challenges, capacity limitations, adverse changes in customer demand, declining economic conditions, increasing product costs or changes in currency exchange rates, among other things. Further information on other factors that could affect IXYS is detailed and included in reports that IXYS has filed with the Securities and Exchange Commission, including its Form 10-Q for the fiscal quarter ended June 30, 2016. IXYS undertakes no obligation to publicly release the results of any revisions to these forward-looking statements.
    IXYS CORPORATION          
    CONDENSED CONSOLIDATED BALANCE SHEETS          
      (in thousands)           
      (unaudited)           
            September 30,   March 31,          
              2016       2016            
    ASSETS                      
Current assets:                        
  Cash and cash equivalents       $   153,804     $   155,806            
  Restricted cash             274         277            
  Accounts receivable, net             38,997         38,440            
  Inventories, net             89,696         89,604            
  Prepaid expenses and other current assets         4,189         4,203            
    Total current assets         286,960       288,330            
Property, plant and equipment, net           43,678         42,623            
Other assets             64,197         63,724            
Deferred income taxes             27,865         28,024            
                           
    Total assets         $   422,700     $   422,701            
                           
  LIABILITIES AND STOCKHOLDERS' EQUITY                
                           
Current liabilities:                        
  Current portion of notes payable to bank         1,087         1,804            
  Accounts payable             10,913         11,416            
  Accrued expenses and other current liabilities       24,542       21,290            
    Total current liabilities         36,542       34,510            
Notes payable and other liabilities, net of current portion     84,945       92,589            
Pension liabilities           15,424       16,307            
    Total liabilities         136,911       143,406            
                           
Common stock           383       382            
Additional paid-in capital             155,342         152,200            
Retained earnings           152,617       146,979            
Accumulated other comprehensive (loss)          (22,553 )     (20,266 )          
    Stockholders' equity         285,789       279,295            
                           
    Total liabilities and stockholders' equity   $   422,700     $   422,701            
                           
     
    IXYS CORPORATION  
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS   
      (in thousands, except per share data)   
      (unaudited)  
     
            Three Months Ended   Six Months Ended  
            September 30,   September 30,  
              2016       2015       2016       2015    
                           
Net revenues         $   78,629     $   80,257     $   159,267     $   162,304    
Cost of goods sold           53,174       54,245       109,818       110,690    
  Gross profit           25,455       26,012       49,449       51,614    
                           
Operating expenses:                        
  Research, development and engineering       7,848       7,804       15,758       15,487    
                           
  Selling, general and administrative       10,140       9,801       20,178       20,437    
                           
  Amortization of intangibles           696         1,374         1,713         2,953    
                           
    Total operating expenses     18,684       18,979       37,649       38,877    
                           
  Operating income         6,771       7,033       11,800       12,737    
                           
Other (expense) income, net         24       (1,255 )     266       (2,312 )  
                           
  Income before income tax provision       6,795       5,778       12,066       10,425    
                           
Provision for income tax           2,860       2,505       5,112       4,167    
                           
Net income          $   3,935     $   3,273     $   6,954     $   6,258    
                           
Net income per share - basic       $   0.12     $   0.10     $   0.22     $   0.20    
                           
Weighted average shares used in per share calculation - basic     31,490       31,651       31,447       31,769    
                           
Net income per share - diluted       $   0.12     $   0.10     $   0.22     $   0.19    
                           
Weighted average shares used in per share calculation - diluted     32,145       32,380       32,074       32,627    
                           

 
Reconciliation of net income to non-GAAP net income (in thousands, unaudited):            
  Three Months Ended   Six Months Ended  
    September 30,   September 30,  
      2016       2015       2016       2015    
           
Net income   $   3,935     $   3,273     $   6,954     $   6,258    
           
Amortization of intangible assets     696       1,374       1,713       2,953    
Stock compensation expense     874       951       1,729       1,691    
Tax on stock compensation expense     (368 )     (412 )     (733 )     (676 )  
Non-GAAP net income   $   5,137     $   5,186     $   9,663     $   10,226    
                   
         
Reconciliation of net income per share, diluted to non-GAAP net income per share, diluted (unaudited):    
    Three Months Ended   Six Months Ended  
    September 30,   September 30,  
      2016       2015       2016       2015    
           
Net income per share, diluted   $   0.12     $   0.10     $   0.22     $   0.19    
           
Amortization of intangible assets     0.02       0.04       0.05       0.09    
Stock compensation expense     0.03       0.03       0.05       0.05    
Tax on stock compensation expense     (0.01 )     (0.01 )     (0.02 )     (0.02 )  
Non-GAAP net income per share, diluted   $   0.16     $   0.16     $   0.30     $   0.31    
         
Weighted average shares used in per share calculation, diluted   32,145       32,380       32,074       32,627    
         

 
Adjusted EBITDA (in thousands, unaudited)            
  Three Months Ended   Six Months Ended
  September 30,   September 30,
    2016       2015       2016       2015  
Net income $   3,935     $   3,273     $   6,954     $   6,258  
               
Add:              
  Income tax expense     2,860         2,505         5,112         4,167  
  Interest expense     615         284         1,250         598  
  Depreciation and amortization     2,535         3,361         5,367         7,145  
  Stock compensation expense     874         951         1,729         1,691  
Adjusted EBITDA $   10,819     $   10,374     $   20,412     $   19,859  
         

 

 

Contact:          Uzi SassonPresident & CEOIXYS Corporation1590 Buckeye DriveMilpitas, California 95035(408) 457-9000

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