Power Integrations Reports Record Quarterly Revenues and Net Income

February 4, 2010

Feb 4, 2010 (GlobeNewswire via COMTEX News Network) --

  Fourth-Quarter Revenues Increased 56 Percent Year-over-Year to $66.1
                              Million; GAAP
                  Gross Margin Expanded to 51.1 Percent
        Full-Year Revenues Grew Seven Percent to $215.7 Million
              Quarterly Dividend Doubles to $0.05 Per Share

SAN JOSE, Calif., Feb. 4, 2010 (GLOBE NEWSWIRE) -- Power Integrations (Nasdaq:POWI), the leader in high-voltage integrated circuits for energy-efficient power conversion, today announced financial results for the quarter and year ended December 31, 2009. Net revenues for the fourth quarter of 2009 were $66.1 million, up 10 percent sequentially and an increase of 56 percent compared with the fourth quarter of 2008. Gross margin for the fourth quarter was 51.1 percent.

Net income for the quarter was a record $9.18 million, or $0.32 per diluted share, compared with net income of $9.15 million, or $0.32 per diluted share in the prior quarter and a net loss of $20.7 million, or $0.72 per share, in the fourth quarter of 2008. The company's results for the fourth quarter of 2008 included $19.3 million of non-cash stock-based compensation expenses arising from the repurchase of employee stock options, as well as a non-cash charge of $2.0 million for the impairment of intangible assets.

In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation expenses, the asset-impairment charge recognized in the fourth quarter of 2008, and the related tax effects. Non-GAAP net income for the fourth quarter of 2009 was $12.2 million or $0.42 per diluted share, compared with $10.4 million, or $0.36 per diluted share in the prior quarter and $4.6 million or $0.15 per diluted share in the fourth quarter of 2008. Non-GAAP gross margin for the fourth quarter was 51.4 percent.

Commented Balu Balakrishnan, president and CEO of Power Integrations: "We completed an outstanding year with another strong quarter, delivering ten-percent sequential revenue growth, a significant increase in our gross margin, and record net income. Despite the challenging economic environment, our annual revenues grew seven percent, marking our eighth consecutive year of top-line growth. Electronics manufacturers are demanding ever-higher levels of energy efficiency and reliability from their power supplies, and Power Integrations is succeeding in the market as a leading enabler of that trend."

Balakrishnan added: "We are excited about the opportunities that lie ahead in 2010 and beyond. Energy efficiency will be a major factor in the power-supply industry for years to come as the drive toward greener products continues. The need to conserve energy is also driving the adoption of LEDs for general lighting, creating a fast-growing, emerging market for our products. And we have a strong pipeline of new products, including ICs that will offer an unprecedented level of integration for high-power applications that have historically used only discrete solutions."

Added Bill Roeschlein, Power Integrations' chief financial officer: "We ended 2009 on a high note, and 2010 is off to a good start with a strong starting backlog and record monthly bookings in January. We expect first-quarter revenues to be between $70 million and $74 million, an increase of between 74 percent and 84 percent compared with the first quarter of 2009. We expect our first-quarter gross margin to be similar to the fourth quarter of 2009."

"Patent-litigation expenses were higher than expected in the fourth quarter, reflecting the unpredictable nature of expenses during the discovery phase of a lawsuit," Roeschlein continued. "However, litigation expenses should decrease significantly in the first quarter now that discovery is essentially complete. We expect total operating expenses in the first quarter to be between $21 million and $21.5 million, including $2.5 million of non-cash stock-based compensation expenses and about $1 million of patent-litigation expenses."

Full-Year Results

Full-year 2009 revenues were $215.7 million, an increase of seven percent compared with $201.7 million in 2008. Net income for the year was $23.3 million, or $0.82 per diluted shared, compared with $1.8 million or $0.06 per diluted share in 2008. Non-GAAP net income for the year was $33.3 million or $1.18 per diluted share, compared with $36.9 million or $1.16 per diluted share in 2008. Cash flow from operations totaled $46.2 million for the year, compared with $36.2 million in 2008.

Additional Highlights

  --  Power Integrations' board of directors declared a quarterly dividend of
      $0.05 per share, payable on March 31, 2010 to stockholders of record as
      of February 26, 2010.
  --  Power Integrations was issued 6 U.S. patents and 4 foreign patents
      during the fourth quarter. The company received a total of 47 U.S.
      patents and 33 foreign patents during 2009 and had a total of 291 U.S.
      patents and 171 foreign patents as of December 31, 2009.


Conference Call Today at 6:00 am Pacific Time

Power Integrations management will hold a conference call today at 6:00 am Pacific time. Members of the investment community can join the call by dialing 1-800-930-7616 from within the United States or 1-913-312-0709 from outside the U.S. The call will be available via a live and archived webcast on the investor section of the company's website, http://powerintegrations2014.q4web.com.

About Power Integrations

Power Integrations is the leading supplier of high-voltage analog integrated circuits used in energy-efficient power conversion. The company's innovative technology enables compact, energy-efficient power supplies in a wide range of electronic products, in AC-DC, DC-DC and LED lighting applications. Since its introduction in 1998, Power Integrations' EcoSmart(R)energy-efficiency technology has saved an estimated $3.9 billion of standby energy waste and prevented millions of tons of CO2 emissions. The company's Green Room web site (www.powerint.com/greenroom) provides a wealth of information about "energy vampires" and the issue of standby energy waste, along with a comprehensive guide to energy-efficiency standards around the world. Reflecting the environmental benefits of EcoSmart technology, Power Integrations is included in clean-technology stock indices sponsored by the Cleantech Group (AMEX:CTIUS) and Clean Edge (Nasdaq:CELS). For more information, please visit 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 stock-based compensation expenses recorded under Accounting Standard Codification 718-20 ("ASC 718-20"), as well as impairment of intangible assets and the related tax effects of these items. The company uses these non-GAAP measures in its own financial and operational decision-making processes and, with respect to one measure, 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. For example, 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, but is not reflected in the non-GAAP measures. Also, other companies, including companies in Power Integrations' industry, may calculate non-GAAP financial measures differently, limiting their usefulness as comparative measures.

Note Regarding Forward-Looking Statements

The statements in this press release relating to the company's projected first-quarter 2010 financial performance and future growth opportunities are forward-looking statements, reflecting management's current forecast. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt changes. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: changes in global macroeconomic conditions that may impact the level of demand for the company's products; potential changes and shifts in customer demand away from end products that utilize the company's integrated circuits to end products that do not incorporate the company's products; the company's ability to maintain and establish strategic relationships; the effects of competition; customer reaction to the effects of design wins may not be as the company expects; 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; unforeseen costs and expenses; and fluctuations in currency exchange rates. In addition, new product introductions and design wins 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 under the caption "Risk Factors" in the company's most recent quarterly report on Form 10-Q, filed with the Securities and Exchange Commission on November 5, 2009. 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.

                               POWER INTEGRATIONS, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per-share amounts)

                                                                    Twelve Months
                                       Three Months Ended               Ended

                                 December  September   December  December  December
                                 31, 2009   30, 2009   31, 2008  31, 2009  31, 2008
                                 --------  ---------  ---------  --------  --------
  NET REVENUES                    $66,138    $60,024    $42,417  $215,701  $201,708


  COST OF REVENUES                 32,322     30,901     23,472   107,633    96,678
                                 --------  ---------  ---------  --------  --------


  GROSS PROFIT                     33,816     29,123     18,945   108,068   105,030
                                 --------  ---------  ---------  --------  --------

  OPERATING EXPENSES:
  Research and development          8,214      6,846     14,114    30,473    36,867
  Sales and marketing               7,127      5,744     13,569    25,018    35,898
  General and administrative        7,227      5,465      9,240    23,967    27,296

  Impairment of intangibles            --         --      1,958        --     1,958
                                 --------  ---------  ---------  --------  --------

   Total operating expenses        22,568     18,055     38,881    79,458   102,019
                                 --------  ---------  ---------  --------  --------

  INCOME (LOSS) FROM OPERATIONS    11,248     11,068   (19,936)    28,610     3,011

  OTHER INCOME, net                   157        178      1,836     1,913     7,713

  INCOME (LOSS) BEFORE
   PROVISION FOR INCOME TAXES      11,405     11,246   (18,100)    30,523    10,724


  PROVISION FOR INCOME TAXES        2,221      2,094      2,553     7,254     8,921
                                 --------  ---------  ---------  --------  --------


  NET INCOME (LOSS)                $9,184     $9,152  $(20,653)   $23,269    $1,803
                                 ========  =========  =========  ========  ========

  EARNINGS (LOSS) PER SHARE:

   Basic                            $0.34      $0.34    $(0.72)     $0.86     $0.06
                                 ========  =========  =========  ========  ========

   Diluted                          $0.32      $0.32    $(0.72)     $0.82     $0.06
                                 ========  =========  =========  ========  ========

  SHARES USED IN PER-SHARE
   CALCULATION:
   Basic                           27,106     26,723     28,860    26,920    30,099
   Diluted                         29,116     28,431     28,860    28,297    31,755

  SUPPLEMENTAL INFORMATION:

  Stock-based compensation
   expenses included in:
   Cost of revenues                  $176       $188     $2,204      $790    $3,481
   Research and development         1,115        339      7,749     4,371    11,773
   Sales and marketing                820        172      7,992     2,548    11,878

   General and administrative       1,174        705      4,937     3,619     7,832
                                 --------  ---------  ---------  --------  --------
    Total stock-based
     compensation expense          $3,285     $1,404    $22,882   $11,328   $34,964
                                 ========  =========  =========  ========  ========


  Operating expenses include
   the following:

   Patent-litigation expenses      $2,334     $1,473     $1,012    $5,572    $3,415
                                 ========  =========  =========  ========  ========


  REVENUE MIX BY PRODUCT FAMILY
   TOPSwitch                          22%        24%        24%       23%       25%
   TinySwitch                         41%        43%        42%       43%       44%
   LinkSwitch                         36%        32%        32%       33%       29%
   Other                               1%         1%         2%        1%        2%

  REVENUE MIX BY END MARKET
   Communications                     36%        32%        36%       34%       34%
   Computer                           14%        14%        16%       14%       16%
   Consumer                           33%        37%        31%       35%       33%
   Industrial                         17%        17%        17%       17%       17%

                                POWER INTEGRATIONS, INC.
             RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
                        (in thousands, except per-share amounts)

                                              Three Months             Twelve Months
                                                  Ended                    Ended

                                        Dec.     Sept.
                                         31,      30,     Dec. 31,  Dec. 31,  Dec. 31,
                                        2009     2009       2008      2009      2008
                                       -------  -------  ---------  --------  --------
  RECONCILIATION OF GROSS PROFIT
  GAAP gross profit                    $33,816  $29,123    $18,945  $108,068  $105,030
   GAAP gross profit margin              51.1%    48.5%      44.7%     50.1%     52.1%

  Stock-based compensation expense
   included in
  cost of revenues                         176      188      2,204       790     3,481
                                       -------  -------  ---------  --------  --------


  Non-GAAP gross profit                $33,992  $29,311    $21,149  $108,858  $108,511
                                       -------  -------  ---------  --------  --------
   Non-GAAP gross profit margin          51.4%    48.8%      49.9%     50.5%     53.8%


  RECONCILIATION OF OPERATING
   EXPENSES
  GAAP operating expenses              $22,568  $18,055    $38,881   $79,458  $102,019

  Less: Stock-based compensation
   expense
  included in operating expenses:

    Research and development             1,115      339      7,749     4,371    11,773
    Sales and marketing                    820      172      7,992     2,548    11,878

    General and administrative           1,174      705      4,937     3,619     7,832
                                       -------  -------  ---------  --------  --------

    Total                                3,109    1,216     20,678    10,538    31,483
                                       -------  -------  ---------  --------  --------

   Impairment of intangibles                --       --      1,958        --     1,958


  Non-GAAP operating expenses          $19,459  $16,839    $16,245   $68,920   $68,578
                                       -------  -------  ---------  --------  --------


  RECONCILIATION OF INCOME FROM
   OPERATIONS
  GAAP income from operations          $11,248  $11,068  $(19,936)   $28,610    $3,011
   GAAP operating margin                 17.0%    18.4%        N/A     13.3%      1.5%

   Stock-based compensation included
    in
   cost of revenues                        176      188      2,204       790     3,481
   Stock-based compensation included
    in
   operating expenses                    3,109    1,216     20,678    10,538    31,483
   Impairment of intangibles                --       --      1,958        --     1,958


  Non-GAAP income from operations      $14,533  $12,472     $4,904   $39,938   $39,933
                                       -------  -------  ---------  --------  --------
   Non-GAAP operating margin             22.0%    20.8%      11.6%     18.5%     19.8%


  RECONCILIATION OF PROVISION FOR
   INCOME TAXES

  GAAP provision for income taxes       $2,221   $2,094     $2,553    $7,254    $8,921
                                       -------  -------  ---------  --------  --------
   GAAP effective tax rate               19.5%    18.6%        N/A     23.8%     83.2%

  Tax effect of items excluded from
   non-GAAP results                      (290)    (202)        513   (1,249)   (1,797)


  Non-GAAP provision for income taxes   $2,511   $2,296     $2,040    $8,503   $10,718
                                       -------  -------  ---------  --------  --------
   Non-GAAP effective tax rate           17.1%    18.2%      30.3%     20.3%     22.5%


  RECONCILIATION OF NET INCOME PER
   SHARE (DILUTED)
  GAAP net income (loss)                $9,184   $9,152  $(20,653)   $23,269    $1,803

  Adjustments to GAAP net income
   (loss)
   Total stock-based compensation        3,285    1,404     22,882    11,328    34,964
   Impairment of intangibles                --       --      1,958        --     1,958
   Tax effect of items excluded from
   non-GAAP results                      (290)    (202)        513   (1,249)   (1,797)


  Non-GAAP net income                  $12,179  $10,354     $4,700   $33,348   $36,928
                                       -------  -------  ---------  --------  --------

  Average shares outstanding for
   calculation
  of non-GAAP income per share
   (diluted)                            29,116   28,431     29,819    28,297    31,755
                                       -------  -------  ---------  --------  --------

  Non-GAAP income per share (diluted)

                                         $0.42    $0.36      $0.16     $1.18     $1.16
                                       =======  =======  =========  ========  ========

  Note on use of non-GAAP financial
   measures:
  In addition to the company's consolidated financial statements,
   which are prepared according to GAAP, the company provides
   certain non-GAAP financial information that excludes
   stock-based compensation expenses recognized under Accounting
   Standard Codification ("ASC") 718-20, impairment of intangible
   assets, and the related tax effects of these items. The company
   uses these non-GAAP measures in its own financial and
   operational decision-making processes and, with respect to one
   measure, 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.

  POWER INTEGRATIONS, INC.
  CONSOLIDATED BALANCE SHEETS
  (in thousands)


                             December  September  December
                             31, 2009   30, 2009  31, 2008
                             --------  ---------  --------
  ASSETS
   CURRENT ASSETS:
    Cash and cash
     equivalents             $134,974   $150,024  $167,472
    Restricted cash               250        250       250
    Short-term investments     20,567      3,192     6,363
    Accounts receivable        21,756     20,440    13,042
    Inventories                26,248     20,335    28,468
    Note receivable                --     10,000    10,000
    Deferred tax assets         1,389      1,275     1,274
    Prepaid expenses and
     other current assets      10,691      7,951     7,099
                             --------  ---------  --------

     Total current assets     215,875    213,467   233,968
                             --------  ---------  --------

   INVESTMENTS                 40,100     23,347     1,011
   PROPERTY AND EQUIPMENT,
    net                        62,381     57,512    56,911
   INTANGIBLE ASSETS, net       3,099      3,270     3,818
   GOODWILL                     1,824      1,824     1,824
   DEFERRED TAX ASSETS         14,590     13,934    15,362

   OTHER ASSETS                 6,698      5,483       184
                             --------  ---------  --------

    Total assets             $344,567   $318,837  $313,078
                             --------  ---------  --------

  LIABILITIES AND
   STOCKHOLDERS' EQUITY
   CURRENT LIABILITIES:
    Accounts payable          $16,944    $14,875    $9,319
    Accrued payroll and
     related expenses           6,145      4,656    15,947
    Income taxes payable          478        677       588
    Deferred income on
     sales to distributors      9,040      7,322     4,798
    Other accrued
     liabilities                3,309      3,335     2,319
                             --------  ---------  --------
     Total current
      liabilities              35,916     30,865    32,971
                             --------  ---------  --------

   LONG-TERM LIABILITIES

    Income taxes payable       23,859     22,519    20,426
                             --------  ---------  --------


     Total liabilities         59,775     53,384    53,397
                             --------  ---------  --------

  STOCKHOLDERS' EQUITY:
    Common stock                   27         27        28
    Additional paid-in
     capital                  150,021    139,186   145,544
    Cumulative translation
     adjustment                     4          3      (57)

    Retained earnings         134,740    126,237   114,166
                             --------  ---------  --------
     Total stockholders'
      equity                  284,792    265,453   259,681
                             --------  ---------  --------
     Total liabilities
      stockholders' equity   $344,567   $318,837  $313,078
                             ========  =========  ========

  POWER INTEGRATIONS, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (in thousands)

                                                                      Twelve Months
                                               Three Months Ended         Ended

                                              Dec. 31,   Dec. 31,  Dec. 31,  Dec. 31,
                                                2009       2008      2009      2008
                                              --------  ---------  --------  --------
  CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                   $9,184  $(20,653)   $23,269    $1,803
   Adjustments to reconcile net income to
    net cash provided by operating
    activities
    Depreciation and amortization                2,790      2,491    10,340     9,816
    Intangible Impairment                           --      1,958        --     1,958
    Gain on sale of property, plant and
     equipment                                       5         --       (5)      (13)
    Stock-based compensation expense             3,284     22,887    11,330    34,975
    Amortization of discount on
     held-to-maturity investments                  214       (15)       319     (755)
    Deferred income taxes                        (770)      (757)       658        18
    Provision for (reduction in provision
     for) accounts receivable and other
     allowances                                           (1,179)       (4)       124
    Excess tax benefit from stock options
     exercised                                   (462)      (109)     (564)     (972)
    Tax benefit associated with employee
     stock plans                                   849      (387)     1,403     2,170
    Change in operating assets and
     liabilities:
     Accounts receivable                       (1,316)      5,110   (8,709)     1,055
     Inventories                               (5,874)    (2,135)     2,136   (8,928)
     Prepaid expenses and other assets         (2,757)      1,315   (8,908)   (3,672)
     Accounts payable                            1,324    (5,103)     6,838   (1,436)
     Taxes payable and other accrued
      liabilities                                2,652      2,986     3,825       486
     Deferred income on sales to
      distributors                               1,719    (2,270)     4,243     (428)
                                              --------  ---------  --------  --------
      Net cash provided by operating
       activities                               10,842      4,139    46,171    36,201
                                              --------  ---------  --------  --------

  CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment         (6,789)    (1,929)  (14,356)   (9,097)
   Note to supplier                             10,000         --    10,000        --
   Investment in third party                   (1,200)         --   (1,200)         0
   Release of restricted cash                       --         --        --     1,050
   Purchases of held-to-maturity investments  (34,841)    (6,369)  (60,461)  (29,172)
   Proceeds from held-to-maturity
    investments                                    500      6,000     6,849   108,373
                                              --------  ---------  --------  --------
    Net cash provided by (used in) investing
     activities                               (32,330)    (2,298)  (59,168)    71,154
                                              --------  ---------  --------  --------

  CASH FLOWS FROM FINANCING ACTIVITIES
   Net proceeds from issuance of common
    stock                                        6,655      1,104    20,353    23,880
   Repurchase of common stock                       --   (53,153)  (28,674)  (82,358)
   Repurchase of stock options                                      (9,048)        --
   Payments of dividends to stockholders         (679)      (730)   (2,696)     (730)
   Excess tax benefit from stock options
    exercised                                      462        109       564       972
                                              --------  ---------  --------  --------
    Net cash provided by (used in) financing
     activities                                  6,438   (52,670)  (19,501)  (58,236)
                                              --------  ---------  --------  --------

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                (15,050)   (50,829)  (32,498)    49,119

  CASH AND CASH EQUIVALENTS AT BEGINNING OF
   PERIOD                                      150,024    218,301   167,472   118,353
                                              --------  ---------  --------  --------


  CASH AND CASH EQUIVALENTS AT END OF PERIOD  $134,974   $167,472  $134,974  $167,472
                                              ========  =========  ========  ========

  SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES:

   Accrued payment for employee tender offer       $--     $9,048       $--    $9,048
                                              ========  =========  ========  ========

   Unpaid property and equipment, net             $741     $(117)      $785     $(37)
                                              ========  =========  ========  ========

  SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION

   Cash paid for interest                          $--        $--      $397        $9
                                              ========  =========  ========  ========
   Cash paid for income taxes, net of
    refunds                                        $63       $617      $150    $5,283
                                              ========  =========  ========  ========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Power Integrations, Inc.

CONTACT: Power Integrations, Inc.
Joe Shiffler
(408) 414-8528
jshiffler@powerint.com

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

News Provided by COMTEX

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

Contact Us

Joe Shiffler
Director, Investor Relations & Corporate Communications
(408) 414-8528
joe@power.com

Literature Requests
ir@power.com

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

Transfer Agent:
Computershare
P.O. Box 30170
College Station, TX 77842
Phone: (781) 575-2879




Subscribe to Investor Alerts

Email Address *
Mailing Lists *



 
Enter the code shown above.