UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly Period Ended April 1, 2001
--------------------------------------------
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________ to ___________
Commission File No. 0-8866
MICROSEMI CORPORATION
---------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2110371
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2381 Morse Avenue, Irvine, California 92614
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(Address of principal executive offices) (Zip Code)
(949) 221-7100
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(Registrant's telephone number, including area code)
2830 S. Fairview Street, Santa Ana, California 92704
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(Former name, former address and former fiscal year, if changed since last
report)
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 [_]
The number of shares of the issuer's Common Stock, $.20 par value, outstanding
on April 19, 2001 was 13,967,380.
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The unaudited consolidated financial information for the quarter and six months
ended April 1, 2001 of Microsemi Corporation and Subsidiaries ("Microsemi" or
the "Company") and the comparative unaudited consolidated financial information
for the corresponding periods of the prior year, together with the balance sheet
as of October 1, 2000, are attached hereto and incorporated herein.
2
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
(amounts in thousands, except per share data)
October 1, 2000 April 1, 2001
--------------- -------------
(restated - Note 2)
ASSETS
Current assets:
Cash and cash equivalents $ 30,460 $ 34,100
Accounts receivable less allowance for doubtful accounts,
$5,767 at October 1, 2000 and $5,314 at April 1, 2001 33,029 34,980
Inventories 52,553 51,090
Deferred income taxes 8,392 8,392
Other current assets 2,020 3,655
---------- ----------
Total current assets 126,454 132,217
Property and equipment, net 55,458 57,111
Deferred income taxes 2,688 2,688
Goodwill and other intangible assets, net 22,559 21,231
Other assets 3,639 1,536
---------- ----------
TOTAL ASSETS $ 210,798 $ 214,783
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 1,037 $ 36
Current maturities of long-term debt 1,230 1,234
Accounts payable 11,489 11,646
Accrued liabilities 23,992 21,963
Income taxes payable 8,549 5,693
---------- ----------
Total current liabilities 46,297 40,572
---------- ----------
Long-term debt 9,651 8,980
---------- ----------
Other long-term liabilities 5,160 5,031
---------- ----------
Commitments and contingencies (note 3)
Stockholders' equity:
Preferred stock, 1,000 shares authorized; none issued,
100 shares designated as Series A, $1.00 par value - -
Common stock, $.20 par value; authorized 20,000 shares;
issued 13,794 at October 1, 2000 and 13,967 at
April 1, 2001 2,759 2,793
Capital in excess of par value of common stock 105,161 107,298
Retained earnings 42,807 51,175
Accumulated other comprehensive loss (1,037) (1,066)
---------- ----------
Total stockholders' equity 149,690 160,200
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 210,798 $ 214,783
========== ==========
The accompanying notes are an integral part of these statements.
3
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Income Statements
(amounts in thousands, except per share data)
Quarter Ended Quarter Ended
------------- -------------
April 2, 2000 April 1, 2001
(restated - Note 2)
Net sales $ 60,972 $ 63,131
Cost of sales 43,805 42,578
------------------- ----------------
Gross profit 17,167 20,553
------------------- ----------------
Operating expenses:
Selling, general and administrative 9,722 9,944
Amortization of goodwill and other intangible assets 509 686
Research and development 2,730 3,774
Acquired in-process research and development 2,510 -
------------------- ----------------
Total operating expenses 15,471 14,404
------------------- ----------------
Operating income 1,696 6,149
------------------- ----------------
Other (expense) income:
Interest, net (1,333) 198
Other, net (65) 24
------------------- ----------------
Total other (expense) income (1,398) 222
------------------- ----------------
Income before income taxes 298 6,371
Provision for income taxes 99 2,102
------------------- ----------------
Net income $ 199 $ 4,269
=================== ================
Earnings per share:
-Basic $ 0.02 $ 0.31
=================== ================
-Diluted $ 0.02 $ 0.29
=================== ================
Weighted average common and common equivalent
shares outstanding:
-Basic 11,118 13,915
-Diluted 11,809 14,689
The accompanying notes are an integral part of these statements.
4
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Income Statements
(amounts in thousands, except earnings per share)
Six Months Ended Six Months Ended
------------------ ----------------
April 2, 2000 April 1, 2001
(restated - Note 2)
Net sales $115,560 $126,136
Cost of sales 84,816 85,609
-------- --------
Gross profit 30,744 40,527
-------- --------
Operating expenses:
Selling, general and administrative 18,148 19,884
Amortization of goodwill and other
intangible assets 903 1,359
Research and development 5,075 7,197
Acquired in-process research
and development 2,510 -
-------- --------
Total operating expenses 26,636 28,440
-------- --------
Operating income 4,108 12,087
-------- --------
Other (expense) income:
Interest, net (2,381) 356
Other, net 22 46
-------- --------
Total other (expense) income (2,359) 402
-------- --------
Income before income taxes 1,749 12,489
Provision for income taxes 578 4,121
-------- --------
Net income $ 1,171 $ 8,368
======== ========
Earnings per share:
-Basic $ 0.11 $ 0.60
-Diluted $ 0.10 $ 0.57
======== ========
Weighted average common and
common equivalent shares outstanding:
-Basic 11,019 13,913
-Diluted 11,418 14,679
The accompanying notes are an integral part of these statements.
5
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
(amounts in thousands)
Six Months Ended Six Months Ended
April 2, 2000 April 1, 2001
------------------- ------------------
(restated - Note 2)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,171 $ 8,368
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 5,747 6,063
Provision for doubtful accounts 888 (453)
Acquired in-process research and development 2,510 -
Changes in assets and liabilities:
Accounts receivable (1,710) (1,498)
Inventories 377 1,410
Other current assets 332 (1,635)
Other assets - 900
Accounts payable 395 157
Accrued liabilities 1,247 (1,030)
Income taxes payable 118 (2,842)
------------ ------------
Net cash provided by operating activities 11,075 9,440
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisition (1,548) -
Investment in an unconsolidated affiliate (251) -
Purchases of property and equipment (5,454) (6,590)
Change in other assets 392 863
------------ ------------
Net cash used in investing activities (6,861) (5,727)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in notes payable to banks and other (5,007) (1,001)
Payments on long-term debt (2,722) (667)
Decrease in other long-term liabilities (9) (127)
Exercises of employee stock options 2,138 1,751
------------ ------------
Net cash used in financing activities (5,600) (44)
------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (2) (29)
------------ ------------
Net (decrease) increase in cash and cash equivalents (1,388) 3,640
Cash and cash equivalents at beginning of period 7,624 30,460
------------ ------------
Cash and cash equivalents at end of period $ 6,236 $ 34,100
============ ============
The accompanying notes are an integral part of these statements.
6
MICROSEMI CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
April 1, 2001
1. PRESENTATION OF FINANCIAL INFORMATION
The financial information furnished herein is unaudited, but in the opinion of
management of Microsemi Corporation includes all adjustments (all of which are
normal, recurring adjustments) necessary for a fair presentation of the results
of operations for the periods indicated. The results of operations for the
first six months of the current fiscal year are not necessarily indicative of
the results to be expected for the full year.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q, and therefore do not include
all information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. The unaudited consolidated financial statements
and notes should be read in conjunction with the consolidated financial
statements and notes thereto in the Annual Report on Form 10-K for the fiscal
year ended October 1, 2000.
2. INVENTORIES
For interim reporting purposes, cost of goods sold and inventories are estimated
based upon the use of the gross profit method.
Inventories used in the computation of cost of goods sold were:
October 1, 2000 April 1, 2001
------------------- -----------------
(restated - Note 2)
(amounts in thousands)
Raw materials $ 12,503 $ 12,623
Work in process 22,239 21,758
Finished goods 17,811 16,709
------------ -------------
$ 52,553 $ 51,090
============ =============
During the first quarter of fiscal year 2001, the Company changed its method of
determining the cost of inventories at its Scottsdale subsidiary ("Scottsdale")
from the last-in, first-out ("LIFO") method to the first-in, first-out ("FIFO")
method. The Company believes that the FIFO method is preferable since it will
enhance the comparability of the Company's financial statements by changing to
the predominant method utilized in its industry and will conform all inventories
of the Company to the same accounting method. In addition, Scottsdale has
experienced improvements in productivity and permanent declines in inventory
costs. Accordingly, the FIFO method will result in a better matching of
revenues and costs and measurement of operating results. The Company has also
applied to the Internal Revenue Service to change to the FIFO inventory costing
method for income tax purposes.
As required by Accounting Principles Board Opinion No. 20, Accounting Changes,
all previously reported results have been restated to reflect the retroactive
application of this accounting change as of the beginning of fiscal year 2000.
The effect of the restatement was to increase retained earnings at October 1,
2000 by $39,000. The respective effects on net income for the three-month and
six-month periods ended April 2, 2000 were immaterial.
7
3. CONTINGENCY
In Broomfield, Colorado, the owner of a property located adjacent to a
manufacturing facility owned by a subsidiary of the Company had notified the
subsidiary and other parties, claiming that contaminants migrated to his
property, thereby diminishing its value. In August 1995, the subsidiary,
together with former owners of the manufacturing facility, agreed to settle the
claim and to indemnify that owner of the adjacent property for remediation
costs. Although TCE and other contaminants previously used at the facility are
present in soil and groundwater on the subsidiary's property, the Company
vigorously contests any assertion that the subsidiary is the cause of the
contamination. In November 1998, the Company signed an agreement with three
former owners of this facility whereby the former owners 1) reimbursed the
Company for $530,000 of past costs, 2) assumed responsibility for 90% of all
future clean-up costs, and 3) agreed to indemnify and protect the Company
against any and all third-party claims relating to the contamination of the
facility. An Integrated Corrective Action Plan has been submitted to the State
of Colorado. State and local agencies in Colorado are reviewing current data
and considering study and cleanup options, and it is not yet possible to predict
costs for remediation. In the opinion of management, the final outcome of the
Broomfield, Colorado environmental matter will not have a material adverse
effect on the Company's financial position, results of operations or cash flows.
The Company is involved in various pending litigation matters, arising out of
the normal conduct of its business, including from time to time litigation
relating to commercial transactions, contracts, and environmental matters. In
the opinion of management, the final outcome of these matters will not have a
material adverse effect on the Company's financial position, results of
operations or cash flows.
4. COMPREHENSIVE INCOME
Comprehensive income is defined as the change in equity (net assets) of a
business enterprise during the period from transactions and other events and
circumstances from non-owner sources. Accumulated other comprehensive loss
consists of the change in the cumulative translation adjustment. Total
comprehensive income of the Company for the quarters ended April 2, 2000 and
April 1, 2001 was $192,000 and $4,269,000, respectively. Total comprehensive
income for the six months ended April 2, 2000 and April 1, 2001 was $1,158,000
and $8,339,000, respectively.
8
5. EARNINGS PER SHARE
Basic earnings per share have been computed based upon the weighted average
number of common shares outstanding during the respective periods. Diluted
earnings per share have been computed, when the result is dilutive, using the
treasury stock method for stock options outstanding and giving effect to
issuance of shares upon conversion of debt during the respective periods.
Earnings per share for the respective quarters and respective six months ended
April 2, 2000 and April 1, 2001 were calculated as follows:
Quarter Ended Six Months Ended
--------------------------------- ------------------------------
April 2, April 1, April 2, April 1,
2000 2001 2000 2001
-------------- -------------- ------------- -------------
(restated - (restated -
Note 2) Note 2)
(amounts in thousands, except per share data)
BASIC
Net income $ 199 $ 4,269 $ 1,171 $ 8,368
============== ============== ============= =============
Weighted-average common shares
outstanding 11,118 13,915 11,019 13,913
============== ============== ============= =============
Basic earnings per share $ 0.02 $ 0.31 $ 0.11 $ 0.60
============== ============== ============= =============
DILUTED
Net income $ 199 $ 4,269 $ 1,171 $ 8,368
Interest savings from assumed
conversions of convertible debt,
net of income taxes - 29 - 59
-------------- -------------- ------------- -------------
Net income assuming conversions $ 199 $ 4,298 $ 1,171 $ 8,427
============== ============== ============= =============
Weighted-average common shares
outstanding for basic 11,118 13,915 11,019 13,913
Dilutive effect of stock options 691 607 399 599
Dilutive effect of convertible debt - 167 - 167
-------------- -------------- ------------- -------------
Weighted-average common shares
outstanding on a diluted basis 11,809 14,689 11,418 14,679
============== ============== ============= =============
Diluted earnings per share $ 0.02 $ 0.29 $ 0.10 $ 0.57
============== ============== ============= =============
6. RECENTLY ISSUED ACCOUNTING STANDARD
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued, which establishes new standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. The Company adopted SFAS No. 133 in
fiscal year 2001; however, the adoption of the new statement did not have any
material impact on the consolidated results of operations, financial position or
cash flows of the Company.
7. SEGMENT INFORMATION
In 1999, the Company adopted SFAS 131. The Company's reportable operating
segments are based on geographic location, and the measure of segment profit is
income from operations.
9
The Company operates predominantly in a single industry segment as a
manufacturer of discrete semiconductors and whole-circuit solutions. Geographic
areas in which the Company operates include the United States, Europe and Asia.
Intergeographic sales primarily represent intercompany sales which are accounted
for based on established sales prices between the related companies and are
eliminated in consolidation.
Financial information by geographic segments is as follows:
Six Months Ended
-----------------------------------
April 2, 2000 April 1, 2001
------------------ -------------
(restated - Note 2)
(amounts in thousands)
Net sales:
United States
Sales to unaffiliated customers $105,091 $111,338
Intergeographic sales 8,843 13,608
Europe
Sales to unaffiliated customers 8,773 12,995
Intergeographic sales 1,790 2,364
Asia
Sales to unaffiliated customers 1,696 1,803
Intergeographic sales 1,799 2,299
Eliminations of intergeographic sales (12,432) (18,271)
-------- --------
$115,560 $126,136
======== ========
Income (loss) from operations:
United States $ 3,749 $ 11,425
Europe 366 515
Asia (7) 147
-------- --------
Total $ 4,108 $ 12,087
======== ========
Capital expenditures:
United States $ 5,393 $ 6,434
Europe 21 156
Asia 40 -
-------- --------
Total $ 5,454 $ 6,590
======== ========
Depreciation and amortization:
United States $ 5,508 $ 5,829
Europe 93 118
Asia 146 116
-------- --------
Total $ 5,747 $ 6,063
======== ========
October 1, 2000 April 1, 2001
------------------ -------------
(restated - Note 2)
(amounts in thousands)
Identifiable assets:
United States $195,693 $198,049
Europe 8,401 10,298
Asia 6,704 6,436
-------- --------
Total $210,798 $214,783
======== ========
10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q includes current beliefs, expectations and
other forward looking statements, the realization of which may be adversely
impacted by any of the factors discussed below or the additional factors
referenced under the heading "Important Factors Related to Forward-Looking
Statements and Associated Risks," found below. This Management's Discussion and
Analysis of Financial Condition and Results of Operations and the accompanying
unaudited consolidated financial statements and notes should be read in
conjunction with the Management's Discussion and Analysis of Financial Condition
and Results of Operations and the consolidated financial statements and notes
thereto in the Annual Report on Form 10-K for the fiscal year ended October 1,
2000.
INTRODUCTION
- ------------
Microsemi Corporation is a leading designer, manufacturer and marketer of
analog, mixed-signal and discrete semiconductors. The Company's semiconductors
manage and regulate power, protect against transient voltage spikes and
transmit, receive and amplify signals. Microsemi's products include individual
components as well as whole-circuit solutions that enhance customer end products
by providing battery optimization, reducing size or protecting circuits.
Microsemi's commercial products are used in dynamic high growth mobile
connectivity applications, including mobile phones and handheld Internet
devices, and broadband communications applications such as base stations,
wireless LAN, and cable and fiber optic systems. These high growth opportunities
have emerged from ongoing capabilities in designing and manufacturing
semiconductors for military, satellite and medical applications. The Company
serves several end markets of the semiconductor industry. These end markets
include battery-operated products, communications and Internet infrastructure,
and military and aerospace. Battery-operated products include portable digital
assistants (PDAs), mobile phones, portable or implantable medical equipment,
hearing aids, notebook computers and wireless web tablets. The Company's diverse
customer base includes Motorola, Lockheed Martin, Seagate, Mitsubishi, Guidant,
Samsung, Medtronic, Boeing, Palm, Dell and Compaq.
Results Of Operations For The Quarter Ended April 2, 2000 Compared To The
Quarter Ended April 1, 2001.
Net sales increased $2.1 million, from $61.0 million for the second quarter of
fiscal year 2000 to $63.1 million for the second quarter of fiscal year 2001.
The increase was primarily attributable to higher sales of power management, TVS
and RF/Microwave products to the mobile connectivity and telecommunications
markets, as well as sales to the military and space/satellite customers, offset
by a decline in products sold to the low-end PC and mobile telephone markets.
Also, the Company sold the assets of its Micro Commercial Components division
("MCC") and closed this division in June 2000. MCC had revenues of $3.7 million
for the quarter ended April 2, 2000.
Gross profit increased $3.4 million, from $17.2 million for the second quarter
of fiscal year 2000 to $20.6 million for the second quarter of fiscal year 2001.
As a percentage of sales, gross profit was 28.2% for the second quarter of
fiscal year 2000, compared to 32.6% for the second quarter of fiscal year 2001.
This increase was due primarily to higher capacity utilization and the recent
shift in revenues from lower-margin commodity products in the
computer/peripherals and industrial markets to higher-margin application-
specific products in the mobile connectivity, telecommunications, medical and
commercial satellite markets which is expected to continue for the remainder of
the year. MCC had contributed $0.5 million toward Microsemi's gross profit for
the second quarter of fiscal year 2000.
Selling, general and administrative expenses increased from $9.7 million for the
second quarter of fiscal year 2000 to $9.9 million for the second quarter of
fiscal year 2001, primarily due to increased expenditures to support the
increase in sales.
11
Research and development expense increased $1.0 million, from $2.7 million for
second quarter of fiscal year 2000 to $3.8 million for the second quarter of
fiscal year 2001. The increase was primarily due to higher spending to develop
power management and RF/Microwave products for the mobile connectivity,
telecommunications and medical markets.
The effective income tax rate was 33.0% in the quarters ended April 2, 2000 and
April 1, 2001, respectively.
Results Of Operations For The Six Months Ended April 2, 2000 Compared To The Six
Months Ended April 1, 2001.
Net sales increased $10.5 million, from $115.6 million for the first six months
of fiscal year 2000 to $126.1 million for the first six months of fiscal year
2001. The increase was primarily attributable to higher sales of power
management, TVS and RF/Microwave products to the mobile connectivity and
telecommunications markets, as well as sales to the military and space/satellite
customers, offset by a decline in products sold to the low-end PC and mobile
telephone markets. Also, the Company sold the assets of its Micro Commercial
Components division ("MCC") and closed this division in June 2000. MCC had
revenues of $7.2 million for the six months ended April 2, 2000.
Gross profit increased $9.8 million, from $30.7 million for the six months of
fiscal year 2000 to $40.5 million for the six months of fiscal year 2001. As a
percentage of sales, gross profit was 26.6% for first six months of fiscal year
2000, compared to 32.1% for the corresponding period of fiscal year 2001. This
increase was due primarily to higher capacity utilization and the recent shift
in revenues from lower-margin commodity products in the computer/peripherals and
industrial markets to higher-margin application-specific products in the mobile
connectivity, telecommunications, medical and commercial satellite markets which
is expected to continue for the remainder of the year. MCC had contributed $1.0
million toward Microsemi's gross profit for the first six months of fiscal year
2000.
Selling, general and administrative expenses increased $1.7 million from $18.2
million for the first six months of fiscal year 2000 to $19.9 million for the
first six months of fiscal year 2001, primarily due to increased expenditures to
support the increase in sales.
Research and development expense increased $2.1 million, from $5.1 million for
the first six months of fiscal year 2000 to $7.2 million for the first six
months of fiscal year 2001. The increase was primarily due to higher spending on
development of power management and RF/Microwave products for the mobile
connectivity, telecommunications and medical markets.
The effective income tax rate was 33.0% in the six months ended April 2, 2000
and April 1, 2001, respectively.
Capital Resources And Liquidity
Net cash provided by operating activities was $11.1 million and $9.4 million for
the first six months of fiscal years 2000 and 2001, respectively. The net cash
provided by operating activities was $1.7 million less in the first six months
of fiscal year 2001 than had been provided in the same period of fiscal year
2000 as a result of the combined impact of greater net income during the first
six months of fiscal year 2001, more than offset by the combined effect of
differences in miscellaneous non-cash financial statement items, such as the
provision for returns and doubtful accounts, acquired in-process research and
development, inventories, other current assets, accrued liabilities and taxes.
Net cash used in investing activities was $6.9 million and $5.7 million in the
six months ended April 2, 2000 and April 1, 2001, respectively. The net cash
used in investing activities was $1.2 million less in the first six months of
fiscal year 2001 than it had been in the first six months of fiscal year 2000
primarily due to the payment for an acquisition in fiscal year 2000 partially
offset by a higher amount of purchases of property and equipment in the first
six months of fiscal year 2001.
12
Net cash used in financing activities was $5.6 million and $0.04 million for the
first six months of fiscal years 2000 and 2001, respectively. The net cash used
in financing activities was $5.6 million less in the first six months of fiscal
year 2001 than it had been in the first six months of fiscal year 2000 primarily
as a result of repayments of a larger portion of the Company's debt partially
offset by proceeds from exercises of employee stock options in the first six
months of fiscal year 2000.
Microsemi's operations in the six months ended April 1, 2001 were funded with
internally generated funds. The Company has maintained a credit line with a
bank, from which it can borrow up to $30 million. The credit line is secured by
substantially all of the assets of the Company. This credit line expires in
March 2003. As of April 1, 2001, there were no funds borrowed under this credit
facility. The credit line includes a facility to issue letters of credit, and
$4.1 million was outstanding in the form of letters of credit as of April 1,
2001. At April 1, 2001, Microsemi had $34.1 million in cash and cash
equivalents.
Based upon information currently available, management believes that Microsemi
can meet its current operating cash and debt service requirements with
internally generated funds together with its available borrowings.
13
IMPORTANT FACTORS RELATED TO FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
- ----------------------------------------------------------------------------
Some of the statements in this report or incorporated by reference are forward-
looking, including, without limitation, the statements under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". These statements include those that contain words like "may,"
"will," "could," "should," "project," "believe," "anticipate," "expect," "plan,"
"estimate," "forecast," "potential," "intend," "maintain," "continue" and
variations of these words or comparable words. In addition, all of the non-
historical information herein is forward-looking, include any statement or
implication about a future time, result or other circumstance. Forward-looking
statements are not a guarantee of future performance and involve risks and
uncertainties. Actual results may differ substantially from the results that the
forward-looking statements suggest for various reasons. These forward-looking
statements are made only as of the date of this report. Microsemi does not
undertake to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.
The forward-looking statements included in this report are based on, among other
items, current assumptions that Microsemi will be able to meet its current
operating cash and debt service requirements, that Microsemi will be able to
successfully resolve disputes and other business matters as anticipated, that
competitive conditions within the analog, mixed signal and discrete
semiconductor, integrated circuit or custom component assembly industries will
not affect the Company materially or adversely, that Microsemi will retain
existing key personnel, that Microsemi's forecasts will reasonably anticipate
market demand for its products, and that there will be no other material adverse
change in its operations or business. Other factors that could cause results to
vary materially from current expectations are referred to elsewhere in this
report. Assumptions relating to the foregoing involve judgments that are
difficult to make and future circumstances that are difficult to predict
accurately or correctly. Forecasting and other management decisions are
subjective in many respects and thus susceptible to interpretations and periodic
revisions based on actual experience and business developments, the impact of
which may cause Microsemi to alter its internal forecasts, which may in turn
affect results or expectations. Microsemi Corporation does not undertake to
announce publicly these changes that may occur in our expectations after the
periods presented herein. Readers are cautioned against giving undue weight to
any of the forward-looking statements.
Adverse changes to our results could result from any number of factors,
including for example fluctuations in economic conditions, potential effects of
inflation, lack of earnings visibility, dependence upon certain customers or
markets, dependence upon suppliers, future capital needs, rapid technological
changes, difficulties in integrating acquired businesses, ability to realize
cost savings or productivity gains, potential cost increases, dependence on key
personnel, difficulties regarding hiring and retaining qualified personnel in a
competitive labor market, risks of doing business in international markets, and
problems of third parties.
The inclusion of forward-looking information should not be regarded as a
representation by Microsemi or any other person that its objectives or plans
will be achieved. Additional factors that could cause results to vary materially
from current expectations are discussed under the heading "Important factors
related to forward-looking statements and associated risks" in the annual report
in the Form 10-K as filed with the Securities and Exchange Commission in
December 2000, and elsewhere in that Form 10-K, including but not limited to,
under the headings, "Legal Proceedings," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and the notes to the
financial statements included therein.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Inapplicable.
14
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
Inapplicable.
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
Inapplicable
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) An election of the Board of Directors was held at the annual
meeting of Stockholders on February 28, 2001.
(b) Names and personal information about the nominees to the Board of
Directors were included in the Proxy Statement dated January 17,
2001.
(c) Votes were received for each of the nominees to the Board of
Directors as follows:
For Withheld
---------- --------
Philip Frey, Jr. 11,826,974 626,292
Joseph M. Scheer 11,826,446 626,820
Brad Davidson 11,828,146 625,120
James J. Peterson 11,828,456 624,810
H.K. Desai 11,828,346 624,920
Robert B. Phinizy 11,826,733 626,533
Martin H. Jurick 11,828,246 625,020
Votes were received for the amendments of the Microsemi 1987 Stock Plan,
including increasing of the number of shares available under the plan as
follows:
For 6,787,070
Against 4,173,877
Abstain 13,082
Non-votes 2,850,475
Item 5. Other information
-----------------
Inapplicable
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
None
(b) Reports on Form 8-K:
None
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICROSEMI CORPORATION
By: /s/ DAVID R. SONKSEN
-----------------------------------
David R. Sonksen
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer and duly
authorized to sign on behalf of the
Registrant)
DATED: May 14, 2001
16