Power Integrations Reports First-Quarter Financial Results

Revenues grew 19 percent year-over-year to $104.7 million; GAAP earnings were $0.47 per diluted share; non-GAAP earnings were $0.63 per diluted share

SAN JOSE, Calif. — (BUSINESS WIRE) — April 27, 2017 — Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended March 31, 2017. Results are calculated using the “sell-in” method of revenue recognition on sales to distributors, reflecting the company’s adoption of ASC 606 effective January 1, 2017. Prior-period results have been recast as if ASC 606 had been in effect for those periods.

Net revenues for the first quarter were $104.7 million, an increase of two percent from the prior quarter, and an increase of 19 percent from the first quarter of 2016. Net income was $14.1 million or $0.47 per diluted share, compared to $0.48 per diluted share in the prior quarter and $0.35 per diluted share in the first quarter of 2016.

In addition to its GAAP results, the company provided certain non-GAAP financial measures that exclude stock-based compensation expenses, amortization of intangible assets and the tax effects of these items. Non-GAAP net income for the first quarter was $19.1 million or $0.63 per diluted share, compared with $0.70 per diluted share in the prior quarter and $0.55 per diluted share in the first quarter of 2016.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “We are off to a strong start in 2017 with 19 percent revenue growth in the first quarter. Our growth is being fueled by innovative products such as our InnoSwitch™ ICs, and by multi-year secular trends such as energy-efficiency, faster charging for mobile devices, smarter homes and appliances, LED lighting, renewable energy, and the growing use of battery power in transportation, power tools and other applications. We also have a robust pipeline of new products coming to market over the next several quarters, which we believe will further enhance our competitive positioning and expand our addressable market.”

Additional Highlights

  • Power Integrations paid a dividend of $0.14 per share on March 31, 2017. A dividend of $0.14 per share is scheduled to be paid on June 30, 2017, to stockholders of record as of May 31, 2017.
  • Power Integrations was issued 13 U.S. patents during the first quarter of 2017.

Financial Outlook

The company issued the following forecast for the second quarter of 2017:

  • Revenues are expected to be $107 million plus or minus $3 million.
  • GAAP gross margin is expected to be between 48.8 percent and 49.3 percent; non-GAAP gross margin is expected to be between 50 percent and 50.5 percent. (The difference between the expected GAAP and non-GAAP gross margins is composed of approximately 0.9 percentage points from amortization of acquisition-related intangible assets and 0.3 percentage points from stock-based compensation.)
  • GAAP operating expenses are expected to be approximately $39 million; non-GAAP operating expenses are expected to be approximately $33.5 million. (Non-GAAP expenses are expected to exclude approximately $5 million of stock-based compensation expenses and $0.5 million of amortization of acquisition-related intangible assets.)

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 1-647-788-4901. 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 (including in-place lease intangible assets) and the tax effects of these items. The company uses these measures in its financial and operational decision-making and, with respect to one measure, in setting performance targets for compensation purposes. The company believes that these non-GAAP measures offer important analytical tools to help investors understand its operating results, and to facilitate comparability with the results of companies that provide similar measures. These non-GAAP measures have 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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