Power Integrations Announces First-Quarter Revenues

April 25, 2006
SAN JOSE, Calif. - April 25, 2006 - Power Integrations (Nasdaq: POWI) today announced revenues for the quarter ended March 31, 2006. The company reported net revenues of $35.3 million for the quarter, down from $37.9 million in the prior quarter. The decline was primarily attributable to lower revenues from the computer and communications markets, partially offset by growth in consumer revenues. Computer revenues were lower due primarily to a decrease in shipments related to desktop PCs. Communications revenues declined primarily as a result of short-term product transitions at the company's power-supply customers.

The company expects to release its complete first-quarter results and hold a conference call following the conclusion of a previously announced internal investigation of company practices related to stock-option grants to officers and directors, and related matters. The company also expects to file its Form 10-K for 2005 and its Form 10-Q for the first quarter of 2006 after the conclusion of the investigation. The company added that it expects the investigation to cost between $4 million and $5 million in total, with approximately $2 million accrued in the company's operating expenses for the first quarter.

"We believe that first-quarter revenues were down largely as a result of quarter-to-quarter fluctuations and product transitions," said Balu Balakrishnan, president and CEO of Power Integrations. "We are anticipating a stronger second quarter, as bookings strengthened considerably in the latter half of March and we began the second quarter with our highest opening backlog in more than three years.

"We had another good quarter in terms of design wins, featuring several high-volume programs for cellphone chargers, DVD players, desktop PCs and other applications, and numerous designs to replace linear power supplies," continued Balakrishnan. "While California intends to delay energy standards until July 2007 on some product categories, standards for cellphone chargers and many other external power supplies are still scheduled to go into effect at the end of 2006. These standards, combined with the rapidly rising prices of commodities such as copper, iron and plastics, continue to drive linear replacement. Revenues for LinkSwitch, our family of linear-replacement products, increased 60 percent sequentially during the first quarter and comprised 8 percent of revenues.

"Overall, we remain very optimistic about 2006, and we expect to deliver double-digit revenue growth for the full year," Balakrishnan concluded. The company noted that it expects net revenues for the second quarter to be between $37 million and $39 million. The company intends to provide a more detailed second-quarter outlook at the time it releases its complete first-quarter results.

Note Regarding Forward-Looking Statements
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 that is, by its nature, subject to rapid and even abrupt changes. Forward-looking statements are denoted by the use of such words and phrases as "believe," "expect," "intend" and other words and phrases that look toward future events or performance. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by management's forward-looking statements. These risks and uncertainties include, but are not limited to: the completion and results of the company's internal investigation; the costs of the investigation; the company's inability to timely file its periodic reports and remain listed on the Nasdaq National Market; prices for commodities such as copper, iron and plastics; further delays by California and other state and federal government authorities to implement new energy standards; changes and shifts in customer demand away from products that utilize the company's integrated circuits to products that do not incorporate the company's products; the company's ability to maintain and establish strategic relationships; the effects of competition; the risks inherent in the development and delivery of complex technologies; the outcome and cost of patent litigation; the company's ability to attract, retain and motivate qualified personnel; the emergence of new markets for the company's products and services; the company's ability to compete in those markets based on timeliness, cost and market demand; and fluctuations in currency exchange rates. In addition, new product introductions and design wins, including those mentioned in this press release, are subject to the risks and uncertainties that typically accompany development and delivery of complex technologies to the marketplace, including product development delays and defects and market acceptance of the new products. These and other risk factors are more fully explained in the company's most recent annual report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2005, and its quarterly report on Form 10-Q, filed on November 7, 2005. 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 the leader in high-voltage analog integrated circuits for power conversion. The company's breakthrough technology enables compact, energy-efficient power supplies in a wide range of AC-DC and DC-DC applications. The company's EcoSmart® energy-efficiency technology, which dramatically reduces energy waste, has saved consumers and businesses around the world more than an estimated $1.5 billion on their electricity bills since its introduction in 1998. For more information, visit the Power Integrations website at www.powerint.com.
NASDAQ: POWI $117.24 -0.38
-0.32% Volume: 222,691 August 11, 2020

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