IR Reports December Quarter 2002 Results

January 23, 2003 by Jeff Shepard

For the quarter ended December 2002, International Rectifier Corp. (IR, El Segundo, CA) reported net income of $10 million, or $0.16 per share, excluding charges, on revenues of $209.5 million, compared to net income of $10.8 million, or $0.17 per share, on revenues of $172.1 million in the prior-year quarter. Including charges of $179.8 million related to the company's previously announced restructuring, IR reported a net loss of $121.3 million, or $1.90 per share.

Revenues increased 22 percent year-over-year, led by 38-percent growth in proprietary products (analog ICs, power systems and advanced-circuit devices). Compared to the immediately preceding quarter, total revenues were down one percent and proprietary product revenues were up three percent. Demand was strong in the consumer, defense and PC sectors. Revenues from sales to original equipment manufacturers rose 36 percent year-over-year, while revenues from sales to distributors grew six percent. Compared to the immediately preceding quarter, OEM revenues were up slightly and distributor revenues declined four percent. Proprietary products comprised 56 percent of shipments in the latest period.

Before charges, December-quarter gross margin declined to 32.5 from 35 percent in the prior quarter, reflecting planned reductions in factory utilization to reduce inventory and continued price pressure on multi-market components. Including a $6 million charge against raw material and work-in-process inventories associated with plant closures, the gross margin was 29.6 percent. The company reported a gross margin of 35.2 percent in the year-earlier quarter. In December, IR announced that restructuring activities designed to accelerate the company's transition to proprietary products are expected to reduce annual costs by $80 to $85 million when completed.