Power Integrations Announces Fourth Quarter and Year End 2002 Results

January 23, 2003
Year-over-year revenues grew 15 percent while net income grew 42 percent

Q42002 Balance Sheet
Q4 2002 Income Statement

SAN JOSE, CALIF. – January 23, 2003 -- Power Integrations, Inc. (Nasdaq:POWI) today announced financial results for its fourth quarter and year ended December 31, 2002.

Net revenues for the fourth quarter of 2002 increased 4 percent to $29.2 million from $28.2 million in the third quarter of 2002, and 23 percent from $23.6 million in the fourth quarter of 2001. Net income for the fourth quarter increased 55 percent to $3.6 million, or $0.12 per diluted share, from $2.3 million, or $0.08 per diluted share in the third quarter. For the same period last year, the company reported net income of $1.3 million, or $0.04 per diluted share.

For the year ended December 31, 2002, Power Integrations reported net revenues of $108.2 million compared with $94.1 million reported in 2001. Net income for 2002 was $9.6 million, or $0.32 per diluted share, compared with net income of $6.7 million, or $0.23 per diluted share in 2001.

"2002 was a success on all fronts for Power Integrations," said Balu Balakrishnan, president and chief executive officer of the company. "While our end markets were relatively flat, we grew our revenue by 15 percent entirely through market penetration. We also increased our cash by $32.5 million, ending the year with $109.4 million. Furthermore, we significantly reduced manufacturing costs which positions us to achieve gross margins of 48 to 50 percent beginning in the first quarter. As a result of the success in our market penetration strategy, we expect to grow revenues by 15 to 25 percent in 2003, assuming end-market growth of 0 to 10 percent."

"We made significant progress on our key objectives to diversify our end markets and broaden our customer base through the ongoing success of TopSwitch GX and TinySwitch II. We also expanded our addressable market to $1.6 billion with the introduction of two new products, LinkSwitch and DPASwitch. In addition, we strengthened our intellectual property portfolio, adding 17 U.S. patents and 7 foreign patents throughout the year, bringing the totals to 56 U.S. patents and 58 foreign patents. With these accomplishments, we believe Power Integrations is well positioned for success in 2003."

The company also reported today that it completed the year with a well-diversified revenue mix by market as follows: Communications 43 percent; Consumer 23 percent; Computer 21 percent; Industrial 6 percent; and Other 7 percent.

Future Outlook

The following statements are based on current expectations. These statements are forward looking, and actual results may differ materially.

Based on currently available information, the company anticipates 2003 revenue to grow 15 to 25 percent from 2002. Earnings per share are expected to be in the range of $0.50 to $0.65. Further, the company expects revenue mix by market for 2003 as follows: Communications 41 percent; Consumer 26 percent; Computer 20 percent; Industrial 6 percent; and Other 7 percent.

In line with seasonal trends, the company expects revenues in the first quarter of 2003 to be relatively flat to down 5 percent sequentially. Gross margin is expected to be in the range of 48 to 50 percent. Operating expenses are expected to increase 4 to 5 percent sequentially. As a result of the above, earnings per share in the first quarter are expected to be in the range of $0.10 to $0.12 per share.

Conference Call

Power Integrations will broadcast its conference call discussion of its 2002 fourth quarter results and other developments for the company live over the Internet on Thursday, January 23, 2003, 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 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 the company's future business and financial performance. 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, "expect", "should", "outlook" 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, 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. New product introductions are subject to the risks and uncertainties that typically accompany 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. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

About Power Integrations

Power Integrations, Inc. is a leading supplier of high-voltage analog integrated circuits for use in AC to DC and DC to DC power conversion. For more information, visit the company's web site at: www.powerint.com or contact the company at 5245 Hellyer Ave., San Jose, Calif. 95138; (408) 414-9200.

NASDAQ: POWI $117.24 -0.38
-0.32% Volume: 222,691 August 11, 2020

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