Power Integrations, Inc. Announces First Quarter 2003 Financial Results

April 23, 2003

Q12003 Balance Sheet
Q12003 Income Statement

SAN JOSE, Calif. - April 23, 2003 - Power Integrations, Inc. (Nasdaq:POWI) today announced financial results for its first quarter of fiscal 2003, ended March 31, 2003.

Net revenues for the first quarter of 2003 were $29.1 million compared with $23.7 million in the first quarter of 2002 and $29.2 million in the fourth quarter of 2002. Net income for the first quarter was $3.9 million, or $0.13 per diluted share. This compares with net income of $1.6 million, or $0.05 per diluted share in the first quarter of 2002 and net income of $3.6 million, or $0.12 per diluted share in the fourth quarter of 2002.

"The net income growth we achieved in the first quarter demonstrates our ability to increase earnings in spite of the challenging business climate," said Balu Balakrishnan, president and chief executive officer of Power Integrations. "The successful diversification and penetration of our end-markets is now a significant strength. In the first quarter, for instance, revenue growth in the consumer and industrial segments offset significant weakness in the communications and computer segments.

"Gross margin in the first quarter grew to 51.8 percent due to our cost reduction efforts in 2002. We are especially pleased with the improvement in our operating margin, which in the first quarter was 18.3 percent compared with 7.9 percent in the same quarter last year," said Mr. Balakrishnan.

Other highlights include:

  • Record level of design wins for both TinySwitch-II and TOPSwitch-GX across all of our end-markets.
  • First design wins for DPA-Switch and LinkSwitch, our newest products. We expect both products to begin to contribute to revenues in the second half of 2003.
  • Three major U.S. OEMs, one Japanese OEM, and two Asian clone PC manufacturers now using TinySwitch-II to meet President Bush's one-watt Executive Order for standby power requirements.
  • The introduction of a new lower cost member of the LinkSwitch family.
  • Added four U.S. patents, bringing the totals to 60 U.S. patents and 58 foreign patents.

Future Outlook

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

The company expects revenues in the second quarter to be flat to up 4 percent sequentially. Gross margin is expected to be in the range of 50 to 51 percent. Operating expenses are expected to increase 4 to 5 percent sequentially. As a result of the above, earnings per share in the second quarter are expected to be in the range of $0.11 to $0.13 per share.

The company's outlook for 2003 remains unchanged. The company expects 2003 revenue to increase between 15 percent, assuming no end-market growth, and 25 percent, assuming 10 percent end-market growth. We expect gross margin for the year to be in a range of 48 to 50 percent. Earnings per share are expected to be in the range of $0.50 to $0.65. Revenue mix by market for 2003 is expected to be: Communications 41 percent; Consumer 26 percent; Computer 20 percent; Industrial 6 percent; and Other 7 percent.

Conference Call

Power Integrations will broadcast its conference call discussion of its first quarter fiscal 2003 financial results and other developments for the company live over the Internet on Wednesday, April 23, 2003, beginning at 1:30 P.M. PDT (4:30 P.M. EDT). 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.

In addition, participants can access the conference call by dialing (800) 289-0468. The passcode is 717684. A replay of the call will be available until May 7, 2003. To access the recording, please dial (888) 203-1112.

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", "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; our ability to compete in those markets based on timeliness, cost and market demand; and our limited financial resources. In addition, 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 report on Form 10-K filed with the Securities and Exchange Commission on March 21, 2003. 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.

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NASDAQ: POWI $68.97 -3.03
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Contact Us

Joe Shiffler
Director, Investor Relations & Corporate Communications
(408) 414-8528
Fax: (408) 414-8628
jshiffler@power.com

Mailing Address:
Power Integrations
Attention: Investor Relations
5245 Hellyer Avenue San Jose, CA. 95138

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