Power Integrations Announces Financial Results for Fiscal Year 2006

June 5, 2007

SAN JOSE, Calif., Jun 5, 2007 (PrimeNewswire via COMTEX News Network) -- Power Integrations (Pink Sheets:POWI) today released complete financial results for the fiscal year ended December 31, 2006. The company's 2006 consolidated statements of operations and consolidated balance sheets, as well as certain supplemental information, are contained in the tables accompanying this press release.

As previously disclosed, the company's 2006 net revenues totaled $162.4 million, an increase of 13 percent compared to the prior year. Gross margin calculated under generally accepted accounting principles (GAAP) was 54.6 percent, which included a positive impact of approximately one margin point from the ship-and-debit settlements recorded by the company during the second quarter of 2006.

Operating expenses on a GAAP basis totaled $84.8 million, including $14.2 million in stock-based compensation expenses. Also included in operating expenses were $13.7 million in expenses related to the company's special investigation and the related financial-statement restatement, as well as $7.0 million in expenses related to patent litigation. Net income under GAAP was $9.4 million, or $0.31 per diluted share.

On a non-GAAP basis which excludes expenses for stock-based compensation, full-year gross margin was 55.3 percent. Non-GAAP net income, which excludes stock-based compensation expenses and the related tax effects, was $21.8 million, or $0.71 per diluted share.

The company has virtually completed its closing and review procedures for the first quarter of 2007, and intends to report final results for that period as soon as practicable.

About Power Integrations

Power Integrations, Inc. is the leading supplier of high-voltage analog integrated circuits used in power conversion. The company's breakthrough integrated-circuit technology enables compact, energy-efficient power supplies in a wide range of electronic products, in both 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 $2.2 billion on their electricity bills since its introduction in 1998. For more information, visit the company's website at www.powerint.com.

Note Regarding Use of Non-GAAP Financial Measures

In addition to the company's consolidated financial statements, which are presented according to GAAP, the company provides certain non-GAAP financial information that excludes expenses (and the related tax effects thereof) recorded under Statement of Financial Accounting Standards No. 123R, "Share-based Payment," which requires the recognition of expenses relating to share-based payments such as stock options. The company uses these non-GAAP measures in its own financial and operational decision-making processes and in setting performance targets for employee-compensation purposes. Further, the company believes that these non-GAAP measures offer an important analytical tool to help investors understand the company's core operating results and trends, and to facilitate comparability with the company's historical results and with the operating results of other companies that provide similar non-GAAP measures.

These non-GAAP measures have certain limitations as analytical tools and are not meant to be considered in isolation or as a substitute for GAAP financial information. Stock-based compensation is an important component of the company's compensation mix, and will continue to result in significant expenses in the company's GAAP results for the foreseeable future. Also, other companies, including other companies in Power Integrations' industry, may calculate non-GAAP financial measures differently than the company, limiting their usefulness as a comparative measure.

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

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