Apr 28, 2010 (GlobeNewswire via COMTEX News Network) --
First-Quarter Revenues Grew 77 Percent Year-Over-Year to $71.5 Million
Wins First High-Volume Designs With New High-Power Hiper(TM),
CAPZero(TM) IC Families
SAN JOSE, Calif., April 28, 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 ended March 31, 2010.
Net revenues for the quarter were $71.5 million, an increase of 8 percent compared with the prior quarter and 77 percent compared with the first quarter of 2009. Net income was a record $12.3 million, or $0.42 per diluted share, compared with net income of $9.2 million, or $0.32 per diluted share in the prior quarter and net income of $0.4 million, or $0.01 per share, in the first quarter of 2009. Gross margin for the first quarter was 50.2 percent; operating margin was 20.8 percent.
In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation expenses and the related
tax effects. Non-GAAP net income for the first quarter was $14.3 million or $0.49 per diluted share, compared with $12.2 million or $0.42 per diluted share in the prior quarter and $3.9 million or $0.14 per diluted share in the first quarter of 2009. Non-GAAP gross margin for the quarter was 50.5 percent; non-GAAP operating margin was 23.6 percent.
Commented Balu Balakrishnan, president and CEO of Power Integrations: "We achieved record revenues for the third straight quarter, surpassing $70 million in quarterly revenues for the first time ever, and we expanded our non-GAAP operating margin for the fifth straight quarter. Bookings increased dramatically during the quarter and have remained strong in April. While the strength in orders and resulting expansion of our backlog is partly attributable to extended lead times, we believe our revenue growth is being driven mainly by
end-market demand as well as greater penetration of our products into the power-supply market."
Balakrishnan continued: "The demand for more energy-efficient power supplies continues to be a key driver in our business. Designers looking to meet standards such as the European Union's new requirements for standby power consumption are increasingly turning to our EcoSmart(R) technology to replace inefficient discrete and passive power supplies. Many manufacturers are tightening their specs beyond the requirements, both of their own volition and in response to incentive programs such as ENERGY STAR(R) and 80 PLUS(R), as OEMs clearly see an advantage in offering greener products.
"During the first quarter we won multiple 80 PLUS high-efficiency designs for a top-tier PC OEM with two new, yet-to-be-announced members of our Hiper family of high-power ICs -- our first high-volume
design wins in the high-power segment of the AC-DC market. We have also won our first designs with the brand-new CAPZero family of X-capacitor discharge chips, which complement our EcoSmart technology by further reducing standby power consumption in high-power applications. We expect to begin production shipments of both of these new product families in the second quarter."
Additional Highlights
-- Cash flow from operations was $16.8 million for the quarter. The company
had $210.2 million in cash and investments as of March 31, 2010, an
increase of $14.3 million during the quarter.
-- Power Integrations repurchased approximately 171,000 shares during the
quarter for a total of $6.0 million. Approximately $8 million remains
under the $25 million repurchase authorization announced in May 2009.
-- The company paid a quarterly dividend of $0.05 per share on March 31.
The next quarterly dividend of $0.05 per share will be paid on June 30,
2010 to stockholders of record as of May 28, 2010.
-- Power Integrations received 7 U.S. patents and 22 foreign patents during
the quarter, and had a total of 297 U.S. patents and 193 foreign patents
as of March 31, 2010.
Second-Quarter Outlook
The company expects its second quarter revenues to be in a range of $74 million to $78 million. GAAP gross margin is expected to be between 50 percent and 51 percent, including an impact of approximately half a percentage point from stock-based compensation. Operating expenses are expected to be between $22.5 million and $23.5 million, including approximately $3 million of stock-based compensation expenses.
Conference Call Today at 1:30 p.m. Pacific Time
Power Integrations management will hold a conference call today at 1:30 p.m. Pacific time. Members of the investment community can join the call by dialing 1-877-303-9795 from within the United States or 1-631-291-4581 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 $4 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"), and the related tax effects. 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 expectation of the timing of
production shipments of its new product families and its projected second-quarter 2010 financial performance 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; the ability of the company to obtain sufficient quantities of wafers in a timely manner from its suppliers; 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 annual report on Form 10-K, filed with the Securities and Exchange Commission on February 26, 2010. 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)
Three Months Ended
March 31, December March 31,
2010 31, 2009 2009
--------- --------- ---------
NET REVENUES $ 71,507 $ 66,138 $ 40,289
COST OF REVENUES 35,585 32,322 19,357
--------- --------- ---------
GROSS PROFIT 35,922 33,816 20,932
--------- --------- ---------
OPERATING EXPENSES:
Research and development 8,111 8,214 7,724
Sales and marketing 6,920 7,127 6,222
General and
administrative 6,013 7,227 5,681
--------- --------- ---------
Total operating
expenses 21,044 22,568 19,627
--------- --------- ---------
INCOME FROM OPERATIONS 14,878 11,248 1,305
OTHER INCOME, net 494 157 824
--------- --------- ---------
INCOME BEFORE PROVISION
FOR
INCOME TAXES 15,372 11,405 2,129
PROVISION FOR INCOME
TAXES 3,058 2,221 1,725
--------- --------- ---------
NET INCOME $ 12,314 $ 9,184 $ 404
========= ========= =========
EARNINGS PER SHARE:
Basic $ 0.45 $ 0.34 $ 0.01
========= ========= =========
Diluted $ 0.42 $ 0.32 $ 0.01
========= ========= =========
SHARES USED IN PER-SHARE
CALCULATION:
Basic 27,470 27,106 27,048
Diluted 29,358 29,116 28,057
SUPPLEMENTAL
INFORMATION:
Stock-based compensation expenses
included in:
Cost of revenues $ 157 $ 176 $ 162
Research and
development 727 1,115 1,836
Sales and marketing 410 820 994
General and
administrative 733 1,174 993
--------- --------- ---------
Total stock-based
compensation expense $ 2,027 $ 3,285 $ 3,985
========= ========= =========
Operating expenses
include the following:
Patent-litigation
expenses $ 1,087 $ 2,334 $ 831
========= ========= =========
REVENUE MIX BY PRODUCT
FAMILY
TOPSwitch 24% 22% 23%
TinySwitch 39% 41% 46%
LinkSwitch 36% 36% 29%
Other 1% 1% 2%
REVENUE MIX BY END
MARKET
Communications 32% 36% 33%
Computer 12% 14% 15%
Consumer 36% 33% 34%
Industrial 20% 17% 18%
POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)
Three Months Ended
March 31, Dec. 31, March 31,
2010 2009 2009
--------- --------- ---------
RECONCILIATION OF GROSS PROFIT
GAAP gross profit $ 35,922 $ 33,816 $ 20,932
GAAP gross profit margin 50.2% 51.1% 52.0%
Stock-based compensation expense
included in
cost of revenues 157 176 162
--------- --------- ---------
Non-GAAP gross profit $ 36,079 $ 33,992 $ 21,094
--------- --------- ---------
Non-GAAP gross profit margin 50.5% 51.4% 52.4%
RECONCILIATION OF OPERATING
EXPENSES
GAAP operating expenses $ 21,044 $ 22,568 $ 19,627
Less:
Stock-based compensation expense
included in
operating expenses:
Research and development 727 1,115 1,836
Sales and marketing 410 820 994
General and administrative 733 1,174 993
--------- --------- ---------
Total 1,870 3,109 3,823
--------- --------- ---------
Non-GAAP operating expenses $ 19,174 $ 19,459 $ 15,804
--------- --------- ---------
RECONCILIATION OF INCOME FROM
OPERATIONS
GAAP income from operations $ 14,878 $ 11,248 $ 1,305
GAAP operating margin 20.8% 17.0% 3.2%
Stock-based compensation included
in cost of revenues 157 176 162
Stock-based compensation included
in operating expenses 1,870 3,109 3,823
Non-GAAP income from operations $ 16,905 $ 14,533 $ 5,290
--------- --------- ---------
Non-GAAP operating margin 23.6% 22.0% 13.1%
RECONCILIATION OF PROVISION FOR
INCOME TAXES
GAAP provision for income taxes $ 3,058 $ 2,221 $ 1,725
--------- --------- ---------
GAAP effective tax rate 19.9% 19.5% 81.0%
Tax effect of items excluded from
non-GAAP results (6) (290) (450)
Non-GAAP provision for income taxes $ 3,064 $ 2,511 $ 2,175
--------- --------- ---------
Non-GAAP effective tax rate 17.6% 17.1% 35.6%
RECONCILIATION OF NET INCOME PER
SHARE (DILUTED)
GAAP net income $ 12,314 $ 9,184 $ 404
Adjustments to GAAP net income
Total stock-based compensation 2,027 3,285 3,985
Tax effect of items excluded from
non-GAAP results (6) (290) (450)
--------- --------- ---------
Non-GAAP net income $ 14,335 $ 12,179 $ 3,939
--------- --------- ---------
Average shares outstanding for
calculation
of non-GAAP income per share
(diluted) 29,358 29,116 28,057
--------- --------- ---------
Non-GAAP income per share (diluted) $ 0.49 $ 0.42 $ 0.14
========= ========= =========
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, and the related tax effects. 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)
March 31, December
2010 31, 2009
---------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 125,295 $ 134,974
Restricted cash 250 250
Short-term investments 22,129 20,567
Accounts receivable 27,586 21,756
Inventories 31,426 26,248
Note receivable -- --
Deferred tax assets 1,486 1,389
Prepaid expenses and
other current assets 13,130 10,691
---------- ----------
Total current assets 221,302 215,875
---------- ----------
INVESTMENTS 62,562 40,100
PROPERTY AND EQUIPMENT,
net 65,877 62,381
INTANGIBLE ASSETS, net 2,927 3,099
GOODWILL 1,824 1,824
DEFERRED TAX ASSETS 12,996 14,590
OTHER ASSETS 6,683 6,698
---------- ----------
Total assets $ 374,171 $ 344,567
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 26,158 $ 16,944
Accrued payroll and
related expenses 5,227 6,145
Income taxes payable 453 478
Deferred income on sales
to distributors 11,917 9,040
Other accrued
liabilities 2,543 3,309
---------- ----------
Total current
liabilities 46,298 35,916
---------- ----------
LONG-TERM LIABILITIES
Income taxes payable 25,023 23,859
---------- ----------
Total liabilities 71,321 59,775
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock 28 27
Additional paid-in
capital 157,193 150,021
Cumulative translation
adjustment (46) 4
Retained earnings 145,675 134,740
---------- ----------
Total stockholders'
equity 302,850 284,792
---------- ----------
Total liabilities
stockholders' equity $ 374,171 $ 344,567
========== ==========
POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31, March 31,
2010 2009
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,314 $ 404
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 2,933 2,496
Loss on sale of property, plant and
equipment 13 --
Stock-based compensation expense 2,027 3,986
Amortization of discount (premium) on
held-to-maturity investments 350 (53)
Deferred income taxes 1,498 1,232
Provision for (reduction in provision for)
accounts receivable and other allowances -- (99)
Excess tax benefit from stock options
exercised (1,176) (5)
Tax benefit associated with employee stock
plans 2,535 73
Change in operating assets and liabilities:
Accounts receivable (5,830) (5,031)
Inventories (5,185) (250)
Prepaid expenses and other assets (672) (729)
Accounts payable 6,295 (894)
Taxes payable and other accrued
liabilities (1,200) (1,055)
Deferred income on sales to distributors 2,877 1,774
---------- ----------
Net cash provided by operating activities 16,779 1,849
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (3,360) (1,767)
Advance for acquisition of business (1,750) --
Purchases of held-to-maturity investments (27,224) (2,755)
Proceeds from held-to-maturity investments 2,850 3,000
---------- ----------
Net cash used in investing activities (29,484) (1,522)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 10,035 4,117
Repurchase of common stock (6,038) (17,635)
Retirement of performance shares for income
tax withholding (769) --
Repurchase of stock options -- (9,048)
Payments of dividends to stockholders (1,378) (672)
Excess tax benefit from stock options
exercised 1,176 5
---------- ----------
Net cash provided by (used in) financing
activities 3,026 (23,233)
---------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (9,679) (22,906)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 134,974 167,472
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 125,295 $ 144,566
========== ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Unpaid property and equipment, net $ 2,918 $ 168
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest $ -- $ 3
========== ==========
Cash paid for income taxes, net of refunds $ 16 $ 173
========== ==========
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
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