Power Integrations Reports Record Quarterly Revenues and Earnings

Revenues increased 18 percent year-over-year to a record $91.7 million; non-GAAP earnings grew 45% year-over-year to a record $0.71 per diluted share; GAAP earnings were $0.54 per diluted share

Cash flow from operations was $29.0 million; company raises quarterly dividend by 25 percent to 10 cents per share effective Q1 2014

SAN JOSE, Calif. — (BUSINESS WIRE) — October 30, 2013 — Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended September 30, 2013. Net revenues for the quarter were $91.7 million, up four percent from the prior quarter and 18 percent from the third quarter of 2012. GAAP net income for the quarter was $16.7 million or $0.54 per diluted share, compared with income of $0.45 per diluted share in the prior quarter and a net loss of $1.54 per share in the third quarter of 2012. GAAP gross margin for the third quarter was 53.2 percent; operating margin was 18.1 percent.

In addition to its GAAP results, the company provided non-GAAP financial measures that exclude stock-based compensation expenses, certain charges, gains and expenses related to acquisitions and strategic investments, non-cash interest income, the tax effects of these items, and a one-time tax-related charge incurred in 2012. Non-GAAP net income for the third quarter of 2013 was $21.8 million or $0.71 per diluted share, compared with $0.61 per diluted share in the prior quarter and $0.49 per diluted share in the third quarter of 2012. Non-GAAP gross margin for the third quarter was 54.2 percent; non-GAAP operating margin was 24.6 percent.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “Our third-quarter results featured record revenues, with sequential growth across all four end-market categories. Compared to a year ago, sales were up 18 percent, with all four end markets contributing double-digit growth. We also reported record earnings and strong cash flow in the third quarter, fueled by the continued expansion of our gross-profit margins.

“Our fourth-quarter revenues are likely to be modestly lower compared to the third quarter due primarily to seasonal trends. Nevertheless, we are on pace for a double-digit revenue increase in 2013, substantially ahead of the growth rate of the overall analog semiconductor industry. We believe we are well positioned for further growth as we continue to increase our penetration across the broader power supply market while aggressively pursuing emerging opportunities in areas like LED lighting, rapid charging and high power.”

Additional Highlights

  • Cash flow from operations in the third quarter was $29.0 million; cash and investments increased by $35.1 million from the end of the prior quarter to a total of $180.2 million.
  • The company paid a dividend of $0.08 per share on September 30, 2013. The next dividend of $0.08 per share is to be paid on December 31, 2013 to stockholders of record as of November 29, 2013. The company’s board of directors has declared an increase in the quarterly dividend payout to $0.10 per share beginning in the first quarter of 2014.
  • Power Integrations received 24 U.S. patents and 37 non-U.S. patents during the quarter and had a total of 586 U.S. patents and 474 non-U.S. patents as of September 30, 2013.

Financial Outlook

The company issued the following forecast for the fourth quarter of 2013:

  • Fourth-quarter revenues are expected to be between $86 million and $92 million.
  • Non-GAAP gross margin is expected to be approximately 54.5 percent. (Excludes from cost of revenues approximately $0.6 million of amortization of acquisition-related intangible assets and $0.3 million of stock-based compensation.) GAAP gross margin is expected to be approximately 53.5 percent.
  • Non-GAAP operating expenses are expected to be between $28 million and $28.5 million. (Excludes from GAAP operating expenses approximately $4 million of stock-based compensation expenses and $1 million of amortization expense for acquisition-related intangible assets.) GAAP operating expenses are expected to be between $33 million and $33.5 million.

Conference Call Today at 1:45 p.m. Pacific Time

Power Integrations management will hold a conference call today at 1:45 p.m. Pacific time. Members of the investment community can join the call by dialing 1-877-317-6789 from within the United States or 1-412-317-6789 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://investors.powerint.com.

About Power Integrations

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