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 September 30, 1995 or ( )	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 0-12718 SUPERTEX, INC. (Registrant) Incorporated in the State of California I.R.S. Employer Identification Number 94-2328535 1235 Bordeaux Drive, Sunnyvale, California 94089 (Address of Principal Executive Offices) Telephone: (408) 744-0100 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 As of October 12, 1995, 11,909,371 shares of the Registrant's common stock were issued and outstanding. PART I - FINANCIAL INFORMATION Item 1 - Financial Statements SUPERTEX, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) 	Three Months Ended 	Six Months Ended 		Sep. 30, Oct. 1, Sep. 30, Oct. 1, 1995 1994 1995 1994 Net Sales 	$	10,359	$	7,644	$	19,516	$	14,884 Cost and expenses: 	Cost of sales 	5,422 	3,804 	10,103 	7,441 	Research and development 	1,321 	1,143 	2,604 	2,090 	Selling, general and administration	 1,431	 1,285	 2,694 	 2,513 		Total cost and expenses 	8,174 	6,232	 15,401 	12,044 Income from operations 	2,185 	1,412 	4,115 	2,840 Other income: 	Interest income 	250 	172	 541 	336 	Other income, net	 57	 18	 105 23 		Income before provision for income taxes 	2,492 	1,602 	4,761 	3,199 Provision for income taxes	 773	 433	 1,476	 864 Net income 	$ 1,719	$ 1,169	$ 3,285	$ 2,335 Net income per share 	$	 0.14	$ 0.10	$	 0.27	$ 0.20	 Shares used in per share computation 		12,307		11,869	 	12,275	 	11,839 <FN> See accompanying notes. SUPERTEX, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) 	(unaudited) 		Sep. 30, 1995		Mar. 31, 1995 ASSETS Current assets: Cash and cash equivalents 	$ 	442 	$ 	4,437 Short term investments	 	18,563	 	15,019 Trade receivables,net of allowances of $347 and $487	 	6,841 		5,800 Other receivables 	254	 352 Inventories	 7,226 	6,637 Deferred income taxes	 1,456 	1,455 Prepaid expenses	 293	 169 	Total current assets 	35,075 	33,869 Property and equipment, net	 5,927	 3,441 TOTAL ASSETS 	$	41,002 	$	37,310 LIABILITIES Current liabilities: Trade accounts payable $ 	2,887 	$ 	2,762 Accrued salaries, wages and employee benefits 	1,427	 1,409 Income taxes payable 	1,064 	1,014 Other accrued liabilities 	572 	467 Deferred income on shipment to distributors	 625	 494 	Total current liabilities 	6,575 	6,146 SHAREHOLDERS' EQUITY Preferred stock, no par value - 	10,000,000 shares authorized, none outstanding	--	-- Common stock, no par value - 	30,000,000 shares authorized, issued and outstanding 11,909,371 and 11,893,411 	18,235 	18,173 Retained earnings 	16,192 	12,991 	Total shareholders' equity 	34,427	 31,164 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 	$	41,002	$	37,310 <FN> See accompanying notes. SUPERTEX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) 	 Six Months Ended 			 	Sep. 30, Oct. 1, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net income	 $	3,285 	$	2,335 Non-cash adjustments to net income: Depreciation and amortization 	670 	465	 Provision for doubtful accounts and sales returns 	140 	336 Provision for excess and obsolete inventories 	276	 (192) Loss on disposal of assets 	0 	6 Changes in operating assets and liabilities: Accounts receivable 	(1,083) 	(879) Inventories 	(865) 	(370) Prepaid expenses 	(124) 	(61) Trade accounts payable and accrued expenses 	247	 136 Income taxes payable 	50	 (143) Deferred income on shipment to distributors	 131	 (9) Total adjustments	 (558) 	 (711) Net cash provided by operating activities	 2,727	 1,624 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment 	(3,156) 	(1,070) Purchases of short term investments	 (22,563) 	-- Proceeds from maturities of short term investments	 19,019	 -- Net cash used in investing activities 	(6,700)	 (1,070) CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 	78 	43 Repurchase of stock	 (100)	 0 Net cash provided by financing activities	 (22)	 43 NET INCREASE (DECREASE) IN CASH 	AND CASH EQUIVALENTS 	(3,995)	 597 	 CASH AND CASH EQUIVALENTS 	Beginning of period 	 4,437 	17,416 	End of period 	$	 442	$	18,013 <FN> See accompanying notes. SUPERTEX, INC. NOTES TO FINANCIAL STATEMENTS Note 1 The information for the three months and six months ended September 30, 1995, is unaudited, but includes all adjustments (consisting of normal recurring adjustments) which the Company considers necessary for a fair presentation of the results of operations for those periods. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These financial statements should be read in conjunction with the audited financial statements of Supertex, Inc. for the year ended April 1, 1995, which are included in the Annual Report on Form 10-K (File Number 0-12718). Interim results are not necessarily indicative of results for the full fiscal year. Inventories consisted of: 	(in thousands) 	Sep. 30, 1995	Mar. 31, 1995 	(unaudited) Finished Goods	 $ 1,070	$ 901 Work in Progress 	4,908 	4,699 Raw Materials	 1,248 	 1,037 Net Inventory	 $ 7,226	$ 6,637 PART I - FINANCIAL INFORMATION Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS: NET SALES Net sales for the second quarter ended September 30, 1995 increased 36% to $10,359,000 from $7,644,000 of the same quarter last year. Six months net sales of $19,516,000 increased 31% from the same period last year of $14,884,000. Continued strength in our customers' markets contributed to this increase in sales. Approximately 45% of Supertex's shipments were to international customers during the six months ended September 30, 1995. GROSS MARGIN Gross margin for the second quarter and six months were 48%, compared with 50% for the same quarter and six months of the prior year. A change in the product mix, with resultant higher cost of goods manufactured contributed to this small decrease in gross margin as some of the new products are undergoing learning curve ramp-up issues. Manufacturing costs are expected to be relatively stable from period to period, with small variations of a few percentage points from one period to another as the product mix for a particular period changes slightly. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses for the quarter ended September 30, 1995 were 14% of net sales, a decrease from 17% for the same period of the prior year. For the six months ended September 30, 1995, SG&A expenses were 14% of net sales compared with 17% for the same period last year. The Company benefited from the economy of scale of higher sales volume this year as dollar expenditure in this category increased by a smaller percentage amount than the percentage increase in net sales. RESEARCH AND DEVELOPMENT As a percentage of net sales, R&D expenses were 13% for the three months ended September 30, 1995, compared with 15% for the same period last year. For the six months ended September 30, 1995, R&D expenses were 13% of net sales, compared with 14% for the first six months of last year. Dollar expenditures in this category increases moderately period to period, as the company develops more new products each year. The Company intends to continue to invest heavily in its new product and process development efforts. INTEREST AND OTHER INCOME Interest and other income for the second quarter of the current year was $307,000, a 61% increase from $190,000 for the same period last year. For the six months ended September 30, 1995, interest and other income also increased 80% from the corresponding period of the prior year. Higher interest rates, combined with increased cash available for short-term investments, accounted for this growth. CERTAIN FACTORS The industry in which the Company competes is characterized by extremely rapid technological change and frequent product introductions. The Company believes that long-term growth will depend largely on its ability to continue to enhance existing products and to introduce new products and features that meet changing customer requirements. While the Company has invested heavily in new products and processes, there can be no assurance that it can continue to introduce new products and features on a timely basis or that certain of its products and processes will not be rendered noncompetitive or obsolete by its competitors. LIQUIDITY AND CAPITAL RESOURCES On September 30, 1995, the Company had a total of $19,005,000 in cash, cash equivalents and short term investments compared to $19,456,000 at March 31, 1995. Cash provided by operating activities in the six months ended September 30, 1995 was $2,728,000. The increase was due to net income in the six months ended September 30, 1995 offset by increases in accounts receivable and inventory. Cash used in investing activities during the six months ended September 30, 1995 was $6,699,000. This was primarily due to the purchase of the company's new headquarters facility in July 1995 and purchases of short-term investments. Management believes its current cash and short-term investments will be adequate to meet anticipated operating needs for the next 12 months. Capital expenditures for the twelve months ending September 30, 1996 are expected to be higher than those for the prior 12-month period because capacity expansion is being planned. PART II - OTHER INFORMATION Item 4. - Submission of Matters to a Vote of Security Holders The Company's Annual Shareholders' Meeting was held on August 4, 1995 at 10:00 a.m., at which the following matters were acted upon: 	Matter Acted Upon 	Votes 	Votes 	Votes Withheld/	Broker 		 For 	Against 	Abstentions 	Non-Votes 1.	Election of Director 	Henry C. Pao 	10,188,284 	0	 651,583 	0	 	Yunni Pao 	10,184,984 	0	 654,883 	0 	Benedict C. K. Choy 	10,188,784 	0 	651,083 	0 	 Frank C. Pao 	10,188,484 	0	 651,383 	0 	 Richard E. Siegel 	10,188,484 	0	 651,383 	0 2.	Addition of 1,000,000 shares to 1991 Stock Options Plan 		8,188,838 	793,532 	38,088	1,819,409 3.	Ratification of Coopers and Lybrand L.L.P. as 	independent accountants	for the company for fiscal year 	ending March 31,1996 		10,826,263 	8,104 	5,500 	0 Item 6. - Exhibits and Reports on Form 8-K 	(a)	Exhibits 		11.1 Computation of Per Share Amounts 	(b)	Reports on Form 8-K 		None. 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: October 16, 1995 	By:	/s/ Henry C. Pao 	 	------------------------- 		Dr. Henry C. Pao, President 		(Principal Executive and Financial Officer) PART II - OTHER INFORMATION Item 6 (a) Exhibit 11.1 Computation of Per Share Amounts (Unaudited) (in thousands, except per share amounts) 	 Three Months Ended 	Six Months Ended 	Sep. 30,	 Oct. 1, 	Sep. 30, 	Oct. 1, 1995 1994 1995 1994 PRIMARY Weighted average shares outstanding 	11,906 	11,730	 11,900	 11,725 Common Stock equivalents 	 401	 139	 375	 114 Total Shares	 12,307 	 11,869 	12,275 	11,839 Net income	 $ 1,719	$ 1,169	$ 3,285	$ 2,335 Per share amount 	$ 0.14	$ 0.10	$ 0.27	$ 0.20 FULLY DILUTED Weighted average shares outstanding 	11,906 	11,730 	11,900 	11,725 Common Stock equivalents	 420	 217	 396	 153 Total Shares 	12,326 	11,947 	12,296 	11,878 Net income 	$ 1,719	$ 1,169	$ 3,285	$ 2,335 Per share amount 	$ 0.14	$ 0.10	$ 0.27	$ 0.20 <FN> Earnings per share for Financial Statements purposes has been calculated based on the weighted average shares outstanding for each period presented as the dilution from Common Stock Equivalents is less than 3%.