[October 29, 2014]

International Rectifier Reports First Quarter Fiscal Year 2015 Results

International Rectifier Corporation (NYSE:IRF) today announced financial results for the first quarter (ended September 28, 2014) of its fiscal year 2015.

On August 20, 2014, International Rectifier Corporation entered into a definitive agreement with Infineon Technologies AG under which Infineon has agreed to acquire International Rectifier for $40 per share in an all-cash transaction valued at approximately $3.0 billion. In anticipation of this transaction which is expected to close late in the calendar year 2014 or early in the calendar year 2015 subject to regulatory approvals, International Rectifier will not conduct a first quarter results conference call nor issue financial guidance for the upcoming quarter. International Rectifier has also suspended its share repurchase program.

Revenue for the September quarter was $287.0 million, a 3.6% decrease compared to $297.6 million in the prior quarter and a 6.4% increase from $269.8 million in the prior year quarter. GAAP net income for the first quarter was $25.9 million, or $0.36 per fully diluted share compared to GAAP net income of $12.9 million, or $0.18 per fully diluted share, in the prior quarter and GAAP net income of $8.7 million, or $0.12 per fully diluted share in the prior year quarter.

First quarter 2015 GAAP net income included a gain of $13.0 million from the sale of an investment and $8.3 million of merger-related costs. A reconciliation of these Non-GAAP items and additional items, to the Company's reported net income, gross margin (referred to as gross profit in attached schedules) and operating income in accordance with U.S. GAAP are set forth in the attached schedules below.

GAAP gross margin for the first quarter was 37.9% compared to 35.6% in the prior quarter and 35.3% in the prior year quarter. GAAP operating income for the first quarter was $18.0 million compared to GAAP operating income of $20.7 million in the prior quarter and GAAP operating income of $16.4 million in the prior year quarter.

Cash, cash equivalents and marketable investments increased $49.9 million during the first quarter and totaled $660.3 million at the end of the first quarter, including restricted cash of $1.3 million.

Cash provided by operating activities for the quarter was $65.2 million and free cash flow was $53.2 million for the quarter.

Non-GAAP Results

Non-GAAP net income for the first quarter was $24.3 million, or $0.34 per fully diluted share compared to non-GAAP net income of $21.9 million, or $0.30 per fully diluted share in the prior quarter and non-GAAP net income of $15.1 million, or $0.21 per fully diluted share in the prior year quarter.

Non-GAAP gross margin for the first quarter was 38.1% compared to non-GAAP gross margin of 35.7% in the prior quarter and non-GAAP gross margin of 35.5% in the prior year quarter. Non-GAAP operating income for the first quarter was $28.9 million compared to non-GAAP operating income of $24.3 million in the prior quarter and non-GAAP operating income of $19.8 million in the prior year quarter.

The non-GAAP results the Company provides exclude the effects of accelerated depreciation, merger-related costs, restructuring costs, amortization of intangibles, a gain from the sale of an investment, the associated net tax effects of these items, and discrete tax provisions and benefits. The Company excludes any tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability.

A reconciliation of these non-GAAP measures to the Company's reported net income (loss), gross margin (referred to as gross profit in attached schedules) and operating income (loss) in accordance with U.S. GAAP are set forth in the attached schedules below.

Segment Table Information/Customer Segments

The business segment tables included with this release for the Company's fiscal quarters ended September 28, 2014, June 29, 2014, and September 29, 2013, respectively, reconcile revenue and gross margin for the Company's segments to the consolidated total amounts of such measures for the Company.

Quarterly Report on Form 10-Q

The Company expects to file its Quarterly Report on Form 10-Q for the first quarter of the 2015 fiscal year with the Securities and Exchange Commission on Wednesday, October 29, 2014. This financial report will be available for viewing and download at http://investor.irf.com.

About International Rectifier

International Rectifier Corporation (NYSE:IRF) is a world leader in power management technology. IR's analog, digital, and mixed signal ICs, and other advanced power management products, enable high performance computing and save energy in a wide variety of business and consumer applications. Leading manufacturers of computers, energy efficient appliances, lighting, automobiles, satellites, aircraft, and defense systems rely on IR's power management solutions to power their next generation products. For more information, go to www.irf.com.

Forward-Looking Statements:

This document contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to expectations concerning matters that (a) are not historical facts, (b) predict or forecast future events or results, or (c) embody assumptions that may prove to have been inaccurate. These forward-looking statements involve risks, uncertainties and assumptions. When we use words such as "believe," "expect," "anticipate," "will", "outlook" or similar expressions, we are making forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give readers any assurance that such expectations will prove correct. The actual results may differ materially from those anticipated in the forward-looking statements as a result of numerous factors, many of which are beyond our control. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, lower than expected demand or greater than expected order cancellations arising from a decline or volatility in general market and economic conditions; reduced margins from lower than expected factory utilization, higher than expected costs and customer shifts to lower margin products; changes in the timing or amount of costs associated with, or disruptions caused by, our restructuring initiatives; our ability to implement our restructuring initiatives as planned and achieve the anticipated benefits, which may be affected by, among other things: customer requirements, changes in business conditions and/or operational needs, retention of key employees, governmental regulations, delays and increased costs; unexpected costs or delays in implementing our plans to secure and qualify external manufacturing capacity for our products, including the purchase and installation of additional manufacturing equipment; delays in implementing our production ramp-up of our wafer thinning manufacturing facility in Singapore; the effects of longer lead times for certain products on meeting demand and any inability by us to timely satisfy customer demand; the effects of manufacturing quality issues and customer claims; the adverse impact of regulatory, investigative and legal actions, among them, current and potential future U.S. economic sanctions; increased competition in the highly competitive semiconductor business that could adversely affect the prices of our products or our ability to secure additional business; the effects of manufacturing, operational and vendor disruptions, and capacity restrictions imposed by our vendors; unexpected delays and disruptions in our supply, manufacturing and delivery efforts due to, among other things, supply constraints, equipment malfunction or natural disasters; delays in launching new technology products; our ability to maintain current intellectual property licenses and obtain new intellectual property licenses; costs arising from pending and threatened litigation or claims; volatility or deterioration of capital markets; the effects of natural disasters; and other uncertainties disclosed in the Company's reports filed from time to time with the Securities and Exchange Commission, including its most recent reports on Form 10-K and 10-Q.

For the three months ended September 28, 2014, June 29, 2014, and September 29, 2013, revenue and gross margin by reportable segments were as follows (in thousands, except percentages):

For the three months ended September 28, 2014, June 29, 2014, and September 29, 2013, stock-based compensation was as follows (in thousands):

We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance. These supplemental measures exclude, among other things, accelerated depreciation, a product claim reserve release, charges related to the amortization of acquisition-related intangible assets, the impact of asset impairment, restructuring and other charges. We also exclude tax provisions (benefits) that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability in addition to tax adjustments related to non-GAAP operating income (loss) adjustments.

We use non-GAAP measures to evaluate the performance of our core businesses and to estimate future core performance. Since we find these measures to be useful, we believe that investors will benefit from seeing non-GAAP measures in addition to seeing our GAAP results. This information facilitates our internal comparisons to our historical operating results as well as to the operating results of our competitors.

Our management recognizes that items such as amortization of intangibles and asset impairment, restructuring and other charges can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of non-GAAP adjustments, investors should understand that the excluded items can be expenses and charges that impact the Company's total cash balance. To gain a complete picture of all effects on the Company's profit and loss from any and all events, management does (and investors should) consider only the GAAP income statement and the other financial measures. The non-GAAP numbers focus instead upon the core business of the Company, which is only a subset, albeit an important one, of the Company's performance, and should not be relied upon by investors.

Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different (and contain different inclusions and exclusions as compared to GAAP information) from the non-GAAP information provided by other companies and therefore are not being provided for the purpose of comparisons with other companies.

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