International Rectifier announces second quarter fiscal results

International Rectifier reported a net income of $43.9 million, or $0.62 per fully diluted share for the second quarter fiscal year 2011, compared with net income of $33.5 million, or $0.47 per fully diluted share, in the first quarter fiscal year 2011. The first quarter fiscal year 2011 results included a $3.8 million gross tax benefit that increased fully diluted earnings per share by 5 cents. For the second quarter fiscal year 2010, International Rectifier reported a net income of $28.3 million, or $0.39 per fully diluted share. The second quarter fiscal year 2010 results included a $27.8 million gross tax benefit that increased fully diluted earnings per share $0.39.

Gross margin was 43.0%, up 430 basis points compared with the first quarter fiscal year 2011 and up from 29.9% in the second quarter fiscal year 2010. The increase in gross margin compared with the first quarter fiscal year 2011 was driven by lower manufacturing costs as a result of higher cost absorption associated with an increase in inventory in anticipation of future demand and a higher gross margin product mix.

Operating income was $44.6 million or 15.8% of revenue compared with $31.6 million or 11.3% of revenue in the first quarter fiscal year 2011 and up from operating income of $254 thousand in the second quarter fiscal year 2010.

President and Chief Executive Officer Oleg Khaykin stated: “The December quarter marked another strong quarter for IR. We have executed on our strategy and delivered one of the most profitable quarters for the company in many years. Strong demand in the appliance, industrial and automotive markets has offset weakness in the consumer and computing markets.”

Research and development expenses for the second quarter fiscal year 2011 were $28.5 million, up from $27.6 million in the first quarter fiscal year 2011.

Selling, general and administrative expenses for the second quarter fiscal year 2011 were $46.6 million, down from $48.3 million in the first quarter fiscal year 2011.

Cash, cash equivalents and marketable investments totaled $602.5 million at the end of the second quarter fiscal year 2011, including restricted cash of $3.4 million.

Cash from operating activities for the second quarter fiscal year 2011 was $55.4 million.

During the second quarter fiscal year 2011, the Company purchased 170,000 shares of its common stock for $4.9 million. The Company had 69,791,968 shares outstanding at the end of the quarter.
Third Quarter Outlook

Oleg Khaykin noted: “For the March quarter, we currently expect revenue to range from $285 million to $295 million and gross margin to range from 39% to 39.5%. We continue to see strength in the appliance, industrial and automotive markets and are starting to see early signs of recovery in computing.”

Segment Table Information/Customer Segments

The business segment tables included with this release for the Company’s fiscal quarters ended December 26, 2010, September 26, 2010, and December 27, 2009, respectively, reconcile revenue and gross margin for the Company’s customer segments to the consolidated total amounts of such measures for the Company. What we refer to as our “customer segments” includes our Power Management Devices, Energy-Saving Products, Automotive Products, Enterprise Power and HiRel reporting segments, and does not include our Intellectual Property reporting segment.

Quarterly Report on Form 10-Q


The Company expects to file its Quarterly Report on Form 10-Q for the 2011 fiscal second quarter with the Securities and Exchange Commission on Monday, January 31, 2011. This financial report will be available for viewing and download at http://investor.irf.com.

NOTE: A conference call will begin today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). All participants, both in the U.S. and international, may join the call by dialing 706-679-3195 by 1:25 p.m. Pacific time. In order to join this conference call, participants will be required to provide the Conference Passcode: “International Rectifier”. Participants may also listen over the Internet at http://investor.irf.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download, and install any necessary audio software.