Power Integrations Reports Second-Quarter Financial Results

Revenues grew 14 percent year-over-year to $97.2 million; GAAP earnings were $0.38 per diluted share; non-GAAP earnings were $0.60 per diluted share

SAN JOSE, Calif. — (BUSINESS WIRE) — July 28, 2016 — Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended June 30, 2016. Net revenues for the second quarter were $97.2 million, up 14 percent from the prior quarter and also up 14 percent compared to the second quarter of 2015. Net income was $11.3 million or $0.38 per diluted share, compared to $0.30 per diluted share in the prior quarter and $0.29 per diluted share in the second quarter of 2015. Cash flow from operations for the second quarter was $23.6 million.

In addition to its GAAP results, the company provided certain non-GAAP financial measures that exclude stock-based compensation expenses, amortization of intangible assets, other acquisition-related expenses, and the tax effects of these items. Non-GAAP net income for the second quarter was $17.7 million or $0.60 per diluted share, compared with $0.50 per diluted share in the prior quarter and $0.47 per diluted share in the second quarter of 2015.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “We achieved record quarterly revenues, with sequential growth across all four end-market categories. Growth was strongest in the communications market, where our InnoSwitch™ products continue to make gains in rapid-charging applications for the mobile-device market. In spite of a challenging demand environment for the semiconductor industry, our first-half revenues increased nine percent from the prior year, and we expect healthy year-over-year growth to continue in the second half of the year.”

Additional Highlights

  • Power Integrations paid a dividend of $0.13 per share on June 30, 2016. A dividend of $0.13 per share is scheduled to be paid on September 30, 2016 to stockholders of record as of August 31, 2016.
  • The company had $202.2 million in cash and short-term marketable securities at quarter-end, an increase of $17.1 million during the quarter.
  • Power Integrations received 18 U.S. patents during the second quarter.

Financial Outlook

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

  • Revenues are expected to be in a range of $96 million to $102 million.
  • GAAP gross margin is expected to be between 48.7 percent and 49.2 percent. Non-GAAP gross margin is expected to be between 50.0 percent and 50.5 percent. (The difference between the expected GAAP and non-GAAP gross margins is composed of approximately 1.0 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 $36.5 million. Non-GAAP operating expenses are expected to be approximately $31 million. (Non-GAAP operating expenses exclude approximately $4.9 million of stock-based compensation expenses and $0.6 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. PT. Members of the investment community can join the call by dialing 1-617-826-1698. 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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