Power Integrations Reports First-Quarter Financial Results

Revenues grew three percent year-over-year to $85.3 million; non-GAAP earnings were $0.50 per diluted share; GAAP earnings were $0.30 per diluted share

SAN JOSE, Calif. — (BUSINESS WIRE) — April 28, 2016 — Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended March 31, 2016. Net revenues for the first quarter were $85.3 million, down two percent from the prior quarter and up three percent compared to the first quarter of 2015. Net income was $8.8 million or $0.30 per diluted share, compared to $0.44 in the prior quarter and $0.21 in the first quarter of 2015. Cash flow from operations for the first quarter was $20.3 million.

In addition to its GAAP results, the company provided non-GAAP financial measures that exclude stock-based compensation expenses, amortization of intangible assets and other acquisition-related expenses, and the tax effects of these items. Non-GAAP net income for the first quarter was $14.7 million or $0.50 per diluted share, compared with $0.58 in the prior quarter and $0.43 in the first quarter of 2015.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “Revenues increased from a year ago, and we expect continued growth in the second quarter as demand for our InnoSwitch™ products continues to ramp in the mobile-device market. The broader InnoSwitch product cycle continues to take shape with the recent introductions of InnoSwitch-CE and the 900-volt InnoSwitch-EP, and we have a robust pipeline of innovative new products on the way that will further expand our addressable market.”

Additional Highlights

  • Power Integrations repurchased approximately 138,000 shares of its common stock during the quarter for $6.1 million. At quarter-end the company had $23.9 million remaining on its repurchase authorization.
  • The company paid a dividend of $0.13 per share on March 31, 2016. A dividend of $0.13 per share will be paid on June 30, 2016 to stockholders of record as of May 31, 2016.
  • Power Integrations had $185.2 million in cash and short-term marketable securities at quarter-end, an increase of $11.3 million during the quarter.
  • Power Integrations was issued 14 U.S. patents during the first quarter.

Financial Outlook

The company issued the following forecast for the second quarter of 2016:

  • Revenues are expected to be in a range of $88 million to $94 million.
  • Non-GAAP gross margin is expected to be between 50.5 percent and 51 percent. (Excludes approximately $0.3 million of stock-based compensation expense and $1 million of amortization of acquisition-related intangible assets.) GAAP gross margin is expected to be between 49.1 percent and 49.6 percent.
  • Non-GAAP operating expenses are expected to be approximately $31 million. (Excludes approximately $4.8 million of stock-based compensation expenses and $0.6 million of amortization of acquisition-related intangible assets.) GAAP operating expenses are expected to be approximately $36.4 million.

Conference Call Today at 1:30 p.m. Pacific Time

Power Integrations management will hold a conference call today at 1:30 p.m. PT. Members of the investment community can join the call by dialing 1-647-788-4901. The call will also be available on the investor section of the company's website, http://investors.power.com.

About Power Integrations

Power Integrations, Inc. is a leading innovator in semiconductor technologies for high-voltage power-conversion. The company’s products are key building blocks in the clean-power ecosystem, enabling the generation of renewable energy as well as the efficient transmission and consumption of power in applications ranging from milliwatts to megawatts. For more information please visit www.power.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 ASC 718-10, amortization of acquisition-related intangible assets and the write-up of acquired inventory, acquisition expenses, severance and transition expenses, and the tax effects of these items. The company uses these measures in its own financial and operational decision-making 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 operating results of other companies that provide similar 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 measures differently, limiting their usefulness as comparative measures.

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