Power Integrations Announces Third Quarter 2000 Earnings Results

October 16, 2000

3Q2000 Balance Sheet
3Q2000 Income Statement

SUNNYVALE, Calif., Oct. 16 -- Power Integrations, Inc. (Nasdaq: POWI) today announced financial results for its third quarter ended September 30, 2000.

Net revenues for the third quarter of 2000 were $27.9 million, down 4 percent from net revenues of $29 million in the second quarter of 2000 and down 8 percent from net revenues of $30.1 million reported in the third quarter of 1999. Net income for the third quarter of 2000, based on an effective tax rate of 30 percent, was $5.1 million, compared with $5.2 million in the second quarter of 2000. The company reported net income of $6.8 million in the third quarter of 1999, which was based on an effective tax rate of 15 percent. Third quarter earnings per share, on a diluted basis, were $0.18 on approximately 28.5 million shares outstanding. This compares with $0.18 on approximately 28.7 million shares outstanding in the second quarter of 2000 and $0.24 on approximately 28.6 million shares outstanding in the third quarter of 1999.

For the first nine months ended September 30, 2000, net revenues increased 15 percent to $84.9 million from $73.9 million during the same period of 1999. For the same period, net income was $15.2 million or $0.53 per share, based on an effective rate of 30 percent, compared to $17 million or $0.61 cents per share a year earlier, based on an effective tax rate of 15 percent.

"We are disappointed with the results of the third quarter," said Howard Earhart president and chief executive officer of Power Integrations. "We are not seeing the historical strength in demand that we expected for this time of the year. Weakness in our cellular phone charger business, which accounted for approximately 85 percent of the shortfall to our initial forecasts. Although we believe the factors that are adversely affecting demand are temporary in nature, our outlook for the next few quarters remains cautious.

"In light of these factors, we expect net revenue in the fourth quarter to decline five to ten percent from the third quarter with a decline in net income commensurate with this change. At this time we expect to achieve year- over-year revenue growth for 2001 to be in the ten to twenty percent range with sequential growth resuming in the second quarter. I want to emphasize that our confidence in the attractiveness of the cell phone market to us has not diminished, nor has our confidence in our ability to continue to lead this market with proprietary high voltage ICs. Our acceleration in new product introductions should broaden our reach in this and other existing markets, as well as open significant new markets to us in the next year and beyond," he said.

Safe Harbor Statement
This press release contains forward-looking statements which reflect management's current forecast of certain aspects of the Company's future business. These forward looking statements are based on current information which we have assessed, but which by its nature, is subject to rapid and even abrupt changes. Forward looking statements are denoted by the use of such words and phrases as "will", "expects", "believe ", "should" and similar words and phrases that look toward future events or performance. The Company's actual results could differ materially from those projected or implied by our forward looking statements due to risks and uncertainties associated with the Company's business. These include, but are not limited to, changes and shifts in customer demand away from products that integrate the Company's ICs to products that do not. Other factors include, but are not limited to, our ability to maintain and establish strategic relationships; the effects of competition; the risks inherent in the development and delivery of complex technologies; our ability to attract, retain and motivate qualified personnel; the emergence of new markets for our products and services, and our ability to compete in those markets based on timeliness, cost and market demand; and our limited financial resources. Acceleration in new product introductions are subject to the risks and uncertainties that typically accompany accelerated development and delivery of complex technologies to the market place, including product development delays and defects. We more fully discuss these and other risk factors in the Company's most recent reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission.

Web cast Information
Power Integrations has scheduled a conference call for 4:30 p.m. EDT today to discuss third quarter results and management's outlook for future quarters. Interested parties may access the conference call on the internet through PRNewswire at http://www.powerint.com. To listen to the live call, please go to the Website at least 15 minutes early to register, download and install any necessary audio software.

About Power Integrations
Power Integrations, Inc. is a leading supplier of high-voltage analog integrated circuits for use in AC to DC power conversion. For more information, visit the company's web site at: http://www.powerint.com or contact the company at 477 North Mathilda Ave., Sunnyvale, Calif. 94086; (408) 523-9200.
NASDAQ: POWI $119.08 -1.23
-1.02% Volume: 129,556 August 7, 2020

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