Power Integrations Announces Fourth Quarter and Year End Results

January 24, 2002

4Q2001 Balance Sheet
4Q2001 Income Statement

SAN JOSE, Calif., Jan. 24 -- Power Integrations, Inc. (Nasdaq: POWI) today announced financial results for its fourth quarter and year ended December 31, 2001.

Net revenues for the fourth quarter of 2001 were $23.6 million compared with net revenues of $23.0 million in the third quarter. Net income for the fourth quarter was $1.3 million or $0.04 per diluted share on approximately 29.7 million shares outstanding. This compares with third quarter net income of $0.92 million, or $0.03 per diluted share on approximately 29.3 million shares outstanding.

For the year ended December 31, 2001, Power Integrations reported net revenues of $94.1 million compared with $111.5 million reported in 2000. Net income for 2001 was $6.7 million, or $0.23 per diluted share based on approximately 29.0 million shares outstanding. This compares with 2000 net income of $19.8 million, or $0.69 per diluted share based on approximately 28.8 million shares outstanding.

"Given the magnitude of the decline in the semiconductor industry during the year, we are pleased with our performance throughout 2001. We sustained profitability, strengthened our balance sheet and gained market share during a time when the competitive pricing environment has been more aggressive than ever," said Howard Earhart, chairman of the board of Power Integrations. "In addition, we made significant progress to accelerate the rate of market conversion. We expanded our product line to diversify the customer base and broaden our addressable markets. We also strengthened our ability to win business and support a larger customer base by adding to our sales and engineering teams. As we enter 2002, I feel very confident that we are well positioned and the right business team is in place to execute on our long-term growth objectives."

"Sales of our newer products more than doubled during 2001, and we expect revenue from these products to increase to approximately 60 percent of our total revenue during 2002," said Balu Balakrishnan, newly appointed chief executive officer of the company. "This is a very important milestone for Power Integrations because these products dramatically expand our addressable markets. Additionally, the products we will introduce this year will address entirely new markets for the company, fueling accelerated growth in 2003 and beyond."

The company also reported today that it completed the year with a well-diversified revenue mix by market as follows: Communications -- 36 percent, Consumer -- 31 percent, Computer - 19 percent, Industrial -- 7 percent and All Other -- 7 percent. The company currently anticipates its revenue mix by market for 2002 to be; Communications -- 35 percent, Consumer -- 30 percent, Computer -- 25 percent, Industrial -- 7 percent and All Other -- 3 percent. The forecasted increase in the computer category of the business is attributable to the high level of design activity in LCD monitors and PC "main" power supplies, both of which are new applications for Power Integrations.

Future Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially. Consistent with historical seasonality, the company anticipates revenues for the first quarter of 2002 to be down 5 to 10 percent sequentially. Gross margin is expected to increase sequentially between one- half to one percentage point as continued cost reductions more than offset competitive pricing. Operating expenses are expected to remain flat and earnings per share are expected to be in the range of $.02 to $.03 per share. The company anticipates 2002 revenue to grow 10 to 15 percent from 2001, with most of the growth occurring in the second half of the year. Earnings per share are expected to be in the range of $.25 to $.30.

Conference Call

Power Integrations will broadcast its conference call discussion of its 2001 fourth quarter and year end results and other developments for the company live over the Internet on Thursday January 24, 2002, 1:30 P.M. PST (4:30 P.M. EST). Interested parties may access the conference call over the Internet through the Investor Relations section of the Power Integrations web site at http:www.powerint.com. To listen to the live call, please go to the web site at least 15 minutes early to download and install any necessary audio software. A replay of the conference call will be indexed and archived on the company's site and will be available two hours following completion of the event.

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," "expect," "believe," "should," "anticipate," "outlook," "if" 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 risks 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.

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 5245 Hellyer Ave., San Jose, Calif. 95138; 408-414-9200.

NASDAQ: POWI $119.08 -1.23
-1.02% Volume: 129,556 August 7, 2020

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