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 December 31, 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 January 11, 1996, 11,885,571 shares of the Registrant's common stock were issued and outstanding. Total number of pages: 9 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements SUPERTEX, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts) 	Three Months Ended	Nine Months Ended 	Dec. 31, Dec. 31,	Dec. 31, 	Dec. 31, 1995 1994 1995 1994 Net sales 		$ 11,118	$ 8,180	$ 30,634	$ 23,064 Costs and expenses: 	Costs of sales 	5,718 	4,167	 15,821 	11,607 	Research and development	 1,456 	1,143 	4,059	 3,234 	Selling, general and administrative 	 1,471	 1,327	 4,165	 3,840 		Total costs and expenses	 8,645 	6,637 	24,045 	18,681 Income from operations	 2,473 	1,543	 6,589	 4,383 Other income: 	Interest income 	293 	227 	855 	563 	Other income, net	 25	 13	 109	 36 		Income before provision 		 for income taxes 	2,791 	1,783	 7,553 	4,982 Provision for income taxes	 865	 481 	 2,342	 1,345 		Net income	 $ 1,926	$ 1,302	$ 5,211	$ 3,637 Net income per share	 $ 0.16	$ 0.11	$ 0.42	$ 0.31 Shares used in per share computation 	12,274 	12,084 	12,275	 11,921 <FN> See accompanying notes. SUPERTEX, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) 				Dec. 31, 1995	Mar. 31, 1995 				 (unaudited) ASSETS Current assets: 	Cash and cash equivalents 	$ 2,171	$ 4,437 	Short term investments	 18,282	 15,019 	Trade accounts receivable, 		net of allowances of $674 and $487 	6,756 	5,800 	Other accounts receivable	 149 	352 	Inventories	 7,112 	6,637 	Deferred income taxes	 1,455	 1,455 	Prepaid expenses	 246	 169 		Total current assets	 36,171 	33,869 Property and equipment, net	 6,291 	 3,441 TOTAL ASSETS $ 42,462 	$ 37,310 LIABILITIES Current liabilities: 	Trade accounts payable 	$ 2,585 	$ 2,762 	Accrued salaries, wages and employee benefits 	1,668 	1,409 	Income taxes payable	 979 	1,014 	Other accrued liabilities	 486	 467 	Deferred income on shipments to distributors	 723	 494 		Total current liabilities	 6,441	 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 11,884,071 and 11,893,411	 18,235 	18,173 	Retained earnings	 17,786	 12,991 		Total shareholders' equity	 36,021 	31,164 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 	$ 42,462	$ 37,310 <FN> See accompanying notes. SUPERTEX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) 	Nine Months Ended 				Dec. 31, 1995	Dec. 31, 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net income	 $ 5,211	$ 3,637 Non-cash adjustments to net income: 	Depreciation and amortization	 1,090	 785 	Provision for doubtful accounts and sales returns 	673	 630 	Provision for excess and obsolete inventories	 245	 (320) 	Loss on disposal of assets	 8	 6 Changes in operating assets and liabilities: 	Trade and other accounts receivable	 (1,426)	 (1,762) 	Inventories	 (720)	 (255) 	Prepaid expenses	 (77)	 (6) 	Trade accounts payable and accrued expenses	 101	 39 	Income taxes payable	 (35)	 9 	Deferred income on shipments to distributors	 229	 (9) Total adjustments	 88	 (883) Net cash provided by operating activities	 5,299	 2,754 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment	 (3,948) 	(1,288) Purchases of short term investments	 (39,343) 	(24,000) Proceeds from maturities of short term investments	 36,080	 14,000 Net cash used in investing activities	 (7,211) 	(11,288) CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised 	147 	205 Stock repurchased	 (501)	 -- Net cash provided by (used in) financing activities	 (354)	 205 NET DECREASE IN CASH 	AND CASH EQUIVALENTS 	(2,266) 	(8,329) CASH AND CASH EQUIVALENTS 	Beginning of period	 4,437	 17,416 	End of period	 $ 2,171 	$ 9,087 <FN> See accompanying notes. SUPERTEX, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 In the opinion of management, the unaudited financial statements for the three and nine months ended December 31, 1994 and 1995 include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial condition and results of operations for those periods in accordance with generally accepted accounting principles. 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 March 31, 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): 	 Dec. 31, 1995	Mar. 31, 1995 	(unaudited) Finished goods	 $ 1,447	$ 901 Work-in-process	 4,205	 4,699 Raw materials	 1,460	 1,037 	 $ 7,112	$ 6,637 In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based Compensation," which establishes a fair-value based method of accounting for stock-based compensation. The Company currently follows the requirements of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." The Company plans to adopt the disclosure provisions of SFAS 123 in fiscal 1997. PART I - FINANCIAL INFORMATION Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations CERTAIN FACTORS This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements as a result of the risk factors set forth below and elsewhere in this report. The industry in which the Company competes is characterized by extreme rapid changes in technology and frequent new product introductions. The Company believes that its long-term growth depend largely on its ability to continue to enhance existing products and to introduce new products and features that meet the continually changing requirements of customers. 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. RESULTS OF OPERATIONS: NET SALES Net sales for the third quarter ended December 31, 1995 increased 36% to $11,118,000 from $8,180,000 for the same quarter of last fiscal year. Net sales for the nine months ended December 31, 1995 increased 33% to $30,634,000 from $23,064,000 for the same period of the last fiscal year. All of the Company's targeted markets showed continued strength and have helped the Company achieve record financial results. Approximately 43% of the Company's sales were to international customers during the nine months ended December 31, 1995. GROSS MARGIN Gross margin for the third quarter of fiscal 1996 was 49% of net sales, the same as the preceding year. Gross margin for the nine months ended December 31, 1995 was 48%, a decrease from 50% for the same period of last fiscal year. Gross margin is expected to be relatively stable from period to period, with small variations from one period to another as slight product mix changes occur. RESEARCH AND DEVELOPMENT As a percentage of net sales, research and development expenses were 13% for the three and nine months ended December 31, 1995, compared with 14% for the same three and nine month periods of last fiscal year. Dollar expenditures in this category increase moderately from 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. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative (SG&A) expenses for the third quarter ended December 31, 1995 were 13% of net sales, a decrease from 16% for the same period of last fiscal year. SG&A expenses for the nine months ended December 31, 1995 were 14% of net sales, compared with 17% for the same period of last fiscal year. The Company continued to benefit from economies of scale as dollar expenditures in this category increased by a smaller percentage than the percentage increase in net sales. INTEREST AND OTHER INCOME Interest and other income for the third quarter of fiscal 1996 was $318,000, an increase of 33% from $240,000 for the same period of last fiscal year. Interest and other income for the nine months ended December 31, 1995 increased 61% to $964,000 from $599,000 for the same period of last fiscal year. Increased funds available for investments and higher interest rates for short-term investments accounted for this growth. PROVISION FOR INCOME TAXES The Company's effective tax rate for the three and nine months ended December 31, 1995 was 31%, an increase from 27% for the same periods of last fiscal year. The Company expects that the effective tax rate will increase in fiscal 1997. LIQUIDITY AND CAPITAL RESOURCES At December 31, 1995, the Company had a total of $20,453,000 in cash, cash equivalents and short term investments compared to $19,456,000 at March 31, 1995. Cash provided by operating activities for the nine months ended December 31, 1995 was $5,299,000. The increase was primarily due to net income of $5,211,000 for the nine months ended December 31, 1995 offset by increases in accounts receivable and inventory. Cash used in investing activities during the nine months ended December 31, 1995 was $7,211,000 new corporate headquarters. Management believes its current cash, cash equivalents and short-term investments will be adequate to meet anticipated operating needs for the next 12 months. Capital expenditures for the next twelve months are expected to be higher than those for the prior twelve-month period because capacity expansion is being planned. RECENT ACCOUNTING PRONOUNCEMENTS In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based Compensation," which establishes a fair-value based method of accounting for stock-based compensation. The Company currently follows the requirements of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." The Company plans to adopt the disclosure provisions of SFAS 123 in fiscal 1997. PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits 11.1 Statement Regarding Computation of Net Income per Share (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: January 29, 1996 	By:	 /s/ Henry C. Pao	 	 Dr. Henry C. Pao, President 		 (Principal Executive and Financial Officer) Item 6 (a) Exhibit 11.1 Statement Regarding Computation of Net Income per Share (unaudited) (in thousands, except per share amounts) 	Three Months Ended 	Nine Months Ended 	Dec. 31,	 Dec 31, 	Dec. 31, 	Dec 31, 1995 1994 1995 1994 PRIMARY Weighted average shares outstanding	 11,891 11,771 	11,897 11,741 Weighted average common stock equivalents	 383	 313	 378	 180 Shares used in per share computation	 12,274 	12,084 	12,275	 11,921 Net income	 $ 1,926	$ 1,302	$ 5,211	$ 3,637 Net income per share	 $ 0.16	$ 0.11	$ 0.42	$ 0.31 FULLY DILUTED Weighted average shares outstanding 	11,891 	11,771	 11,897 	11,741 Weighted average common stock equivalents	 399	 427	 397	 244 Shares used in per share computation	 12,290	 12,198 	12,294	 11,985 Net income	 $ 1,926	$ 1,302	$ 5,211	$ 3,637 Net income per share 	 $ 0.16	$ 0.11	$ 0.42	$ 0.30 <FN> Net income per share is presented under the primary basis as the effect of dilution under the fully diluted basis is not material.