Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Power Integrations Reports First-Quarter Financial Results By: Power Integrations, Inc. via Business Wire May 04, 2023 at 16:01 PM EDT Revenues were $106.3 million; GAAP earnings were $0.12 per diluted share; non-GAAP earnings were $0.25 per diluted share Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended March 31, 2023. Net revenues for the first quarter were $106.3 million, down 15 percent compared to the prior quarter and down 42 percent from the first quarter of 2022. Net income for the first quarter was $6.9 million or $0.12 per diluted share compared to $0.40 per diluted share in the prior quarter and $0.77 per diluted share in the first quarter of 2022. Cash flow from operations for the first quarter was $16.6 million. In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the first quarter of 2023 was $14.2 million or $0.25 per diluted share compared to $0.48 per diluted share in the prior quarter and $0.93 per diluted share in the first quarter of 2022. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release. Commented Balu Balakrishnan, president and CEO of Power Integrations: “First-quarter revenues were in line with our expectations, and sell-through exceeded sell-in by a wider-than-expected margin. The resulting reduction in distributor inventories combined with improved order trends indicates that while end-market demand remains subdued, our revenues have bottomed and a cyclical recovery is underway. “Meanwhile, we continue to gain share in a variety of end-markets while making excellent progress on growth initiatives such as motor-drive, automotive and our proprietary gallium-nitride technology. In March we introduced our first 900-volt GaN products, bringing the benefits of GaN to a wider range of industrial and appliance applications. The new 900-volt products include our first GaN-based ICs for the EV market, where the efficiency and size benefits of GaN are critical as carmakers power more systems from the main battery.” Power Integrations paid a dividend of $0.19 per share on March 31, 2023. A dividend of $0.19 per share is to be paid on June 30, 2023, to stockholders of record as of May 31, 2023. Financial Outlook The company issued the following forecast for the second quarter of 2023: Revenues are expected to be $122 million plus or minus $5 million. GAAP gross margin is expected to be approximately 51.5 percent, and non-GAAP gross margin is expected to be approximately 52 percent. The difference between GAAP and non-GAAP gross margins is approximately equally attributable to stock-based compensation and amortization of acquisition-related intangible assets. GAAP operating expenses are expected to be approximately $52.5 million; non-GAAP operating expenses are expected to be approximately $44.5 million. Non-GAAP expenses are expected to exclude about $8 million of stock-based compensation. 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 register for the call by visiting the following link: https://conferencingportals.com/event/tVwwQxvn. A live webcast of 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 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. 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. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release. Note Regarding Forward-Looking Statements The above statements regarding the company’s forecast for its second-quarter financial performance, that revenues have bottomed and that a recovery is underway are forward-looking statements reflecting management's current expectations and beliefs. These statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these statements. These risks and uncertainties include, but are not limited to: the impact of the COVID-19 pandemic on demand for the company’s products, its ability to supply products and its ability to conduct other aspects of its business such as competing for new design wins; changes in global economic and geopolitical conditions, including such factors as inflation, armed conflicts and trade negotiations, which may impact the level of demand for the company’s products; 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 effects of competition, which may cause the company’s revenues to decrease or cause the company to decrease its selling prices for its products; unforeseen costs and expenses; and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or 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 that may cause actual results to differ 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 (SEC) on February 7, 2023. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether because of new information, future events or otherwise, except as otherwise required by law. Power Integrations and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners. POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 NET REVENUES $ 106,297 $ 124,770 $ 182,149 COST OF REVENUES 52,340 57,416 81,474 GROSS PROFIT 53,957 67,354 100,675 OPERATING EXPENSES: Research and development 23,981 23,504 23,678 Sales and marketing 15,885 15,493 16,155 General and administrative 8,334 7,465 9,614 Amortization of acquisition-related intangible assets - - 181 Total operating expenses 48,200 46,462 49,628 INCOME FROM OPERATIONS 5,757 20,892 51,047 OTHER INCOME 1,714 785 554 INCOME BEFORE INCOME TAXES 7,471 21,677 51,601 PROVISION (BENEFIT) FOR INCOME TAXES 596 (1,138 ) 5,353 NET INCOME $ 6,875 $ 22,815 $ 46,248 EARNINGS PER SHARE: Basic $ 0.12 $ 0.40 $ 0.78 Diluted $ 0.12 $ 0.40 $ 0.77 SHARES USED IN PER-SHARE CALCULATION: Basic 57,105 57,094 59,238 Diluted 57,579 57,535 60,107 SUPPLEMENTAL INFORMATION: Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Stock-based compensation expenses included in: Cost of revenues $ 301 $ 405 $ 320 Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total stock-based compensation expense $ 7,368 $ 6,654 $ 9,013 Cost of revenues includes: Amortization of acquisition-related intangible assets $ 482 $ 482 $ 482 Three Months Ended REVENUE MIX BY END MARKET March 31, 2023 December 31, 2022 March 31, 2022 Communications 28 % 23 % 26 % Computer 14 % 12 % 10 % Consumer 24 % 26 % 35 % Industrial 34 % 39 % 29 % POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 53,957 $ 67,354 $ 100,675 GAAP gross margin 50.8 % 54.0 % 55.3 % Stock-based compensation included in cost of revenues 301 405 320 Amortization of acquisition-related intangible assets 482 482 482 Non-GAAP gross profit $ 54,740 $ 68,241 $ 101,477 Non-GAAP gross margin 51.5 % 54.7 % 55.7 % Three Months Ended RECONCILIATION OF OPERATING EXPENSES March 31, 2023 December 31, 2022 March 31, 2022 GAAP operating expenses $ 48,200 $ 46,462 $ 49,628 Less: Stock-based compensation expense included in operating expenses Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total 7,067 6,249 8,693 Amortization of acquisition-related intangible assets - - 181 Non-GAAP operating expenses $ 41,133 $ 40,213 $ 40,754 Three Months Ended RECONCILIATION OF INCOME FROM OPERATIONS March 31, 2023 December 31, 2022 March 31, 2022 GAAP income from operations $ 5,757 $ 20,892 $ 51,047 GAAP operating margin 5.4 % 16.7 % 28.0 % Add: Total stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Non-GAAP income from operations $ 13,607 $ 28,028 $ 60,723 Non-GAAP operating margin 12.8 % 22.5 % 33.3 % Three Months Ended RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES March 31, 2023 December 31, 2022 March 31, 2022 GAAP provision (benefit) for income taxes $ 596 $ (1,138 ) $ 5,353 GAAP effective tax rate 8.0 % -5.2 % 10.4 % Tax effect of adjustments to GAAP results (501 ) (2,085 ) (122 ) Non-GAAP provision for income taxes $ 1,097 $ 947 $ 5,475 Non-GAAP effective tax rate 7.2 % 3.3 % 8.9 % Three Months Ended RECONCILIATION OF NET INCOME PER SHARE (DILUTED) March 31, 2023 December 31, 2022 March 31, 2022 GAAP net income $ 6,875 $ 22,815 $ 46,248 Adjustments to GAAP net income Stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Tax effect of items excluded from non-GAAP results (501 ) (2,085 ) (122 ) Non-GAAP net income $ 14,224 $ 27,866 $ 55,802 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 57,579 57,535 60,107 Non-GAAP net income per share (diluted) $ 0.25 $ 0.48 $ 0.93 GAAP net income per share (diluted) $ 0.12 $ 0.40 $ 0.77 POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) March 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 94,189 $ 105,372 Short-term marketable securities 264,439 248,441 Accounts receivable, net 20,585 20,836 Inventories 142,444 135,420 Prepaid expenses and other current assets 17,538 15,004 Total current assets 539,195 525,073 PROPERTY AND EQUIPMENT, net 173,506 176,681 INTANGIBLE ASSETS, net 6,054 6,597 GOODWILL 91,849 91,849 DEFERRED TAX ASSETS 19,771 19,034 OTHER ASSETS 21,030 20,862 Total assets $ 851,405 $ 840,096 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 34,694 $ 30,088 Accrued payroll and related expenses 13,442 14,778 Taxes payable 667 938 Other accrued liabilities 14,259 12,572 Total current liabilities 63,062 58,376 LONG-TERM LIABILITIES: Income taxes payable 15,741 15,757 Other liabilities 10,300 10,747 Total liabilities 89,103 84,880 STOCKHOLDERS' EQUITY: Common stock 23 24 Additional paid-in capital 8,780 - Accumulated other comprehensive loss (5,044 ) (7,344 ) Retained earnings 758,543 762,536 Total stockholders' equity 762,302 755,216 Total liabilities and stockholders' equity $ 851,405 $ 840,096 POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,875 $ 22,815 $ 46,248 Adjustments to reconcile net income to cash provided by operating activities Depreciation 8,961 8,875 8,408 Amortization of intangible assets 543 544 724 Loss on disposal of property and equipment 7 209 75 Stock-based compensation expense 7,368 6,654 9,013 Amortization of premium on marketable securities 404 654 937 Deferred income taxes (738 ) 4,824 (936 ) Increase (decrease) in accounts receivable allowance for credit losses (454 ) - 75 Change in operating assets and liabilities: Accounts receivable 705 (4,761 ) 10,660 Inventories (7,024 ) (15,328 ) (3,849 ) Prepaid expenses and other assets (2,302 ) (1,085 ) 1,552 Accounts payable 2,926 2,038 (1,709 ) Taxes payable and other accrued liabilities (686 ) (1,341 ) 3,399 Net cash provided by operating activities 16,585 24,098 74,597 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (4,082 ) (5,767 ) (14,700 ) Proceeds from sale of property and equipment - - 1,202 Purchases of marketable securities (36,922 ) (28,576 ) (15,121 ) Proceeds from sales and maturities of marketable securities 22,693 11,151 108,817 Net cash provided by (used in) investing activities (18,311 ) (23,192 ) 80,198 CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 3,098 - 3,057 Repurchase of common stock (1,687 ) (18,745 ) (134,689 ) Payments of dividends to stockholders (10,868 ) (10,263 ) (10,656 ) Net cash used in financing activities (9,457 ) (29,008 ) (142,288 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,183 ) (28,102 ) 12,507 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 105,372 133,474 158,117 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,189 $ 105,372 $ 170,624 View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005981/en/Contacts Joe Shiffler Power Integrations, Inc. (408) 414-8528 joe@power.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Power Integrations Reports First-Quarter Financial Results By: Power Integrations, Inc. via Business Wire May 04, 2023 at 16:01 PM EDT Revenues were $106.3 million; GAAP earnings were $0.12 per diluted share; non-GAAP earnings were $0.25 per diluted share Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended March 31, 2023. Net revenues for the first quarter were $106.3 million, down 15 percent compared to the prior quarter and down 42 percent from the first quarter of 2022. Net income for the first quarter was $6.9 million or $0.12 per diluted share compared to $0.40 per diluted share in the prior quarter and $0.77 per diluted share in the first quarter of 2022. Cash flow from operations for the first quarter was $16.6 million. In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the first quarter of 2023 was $14.2 million or $0.25 per diluted share compared to $0.48 per diluted share in the prior quarter and $0.93 per diluted share in the first quarter of 2022. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release. Commented Balu Balakrishnan, president and CEO of Power Integrations: “First-quarter revenues were in line with our expectations, and sell-through exceeded sell-in by a wider-than-expected margin. The resulting reduction in distributor inventories combined with improved order trends indicates that while end-market demand remains subdued, our revenues have bottomed and a cyclical recovery is underway. “Meanwhile, we continue to gain share in a variety of end-markets while making excellent progress on growth initiatives such as motor-drive, automotive and our proprietary gallium-nitride technology. In March we introduced our first 900-volt GaN products, bringing the benefits of GaN to a wider range of industrial and appliance applications. The new 900-volt products include our first GaN-based ICs for the EV market, where the efficiency and size benefits of GaN are critical as carmakers power more systems from the main battery.” Power Integrations paid a dividend of $0.19 per share on March 31, 2023. A dividend of $0.19 per share is to be paid on June 30, 2023, to stockholders of record as of May 31, 2023. Financial Outlook The company issued the following forecast for the second quarter of 2023: Revenues are expected to be $122 million plus or minus $5 million. GAAP gross margin is expected to be approximately 51.5 percent, and non-GAAP gross margin is expected to be approximately 52 percent. The difference between GAAP and non-GAAP gross margins is approximately equally attributable to stock-based compensation and amortization of acquisition-related intangible assets. GAAP operating expenses are expected to be approximately $52.5 million; non-GAAP operating expenses are expected to be approximately $44.5 million. Non-GAAP expenses are expected to exclude about $8 million of stock-based compensation. 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 register for the call by visiting the following link: https://conferencingportals.com/event/tVwwQxvn. A live webcast of 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 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. 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. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release. Note Regarding Forward-Looking Statements The above statements regarding the company’s forecast for its second-quarter financial performance, that revenues have bottomed and that a recovery is underway are forward-looking statements reflecting management's current expectations and beliefs. These statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these statements. These risks and uncertainties include, but are not limited to: the impact of the COVID-19 pandemic on demand for the company’s products, its ability to supply products and its ability to conduct other aspects of its business such as competing for new design wins; changes in global economic and geopolitical conditions, including such factors as inflation, armed conflicts and trade negotiations, which may impact the level of demand for the company’s products; 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 effects of competition, which may cause the company’s revenues to decrease or cause the company to decrease its selling prices for its products; unforeseen costs and expenses; and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or 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 that may cause actual results to differ 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 (SEC) on February 7, 2023. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether because of new information, future events or otherwise, except as otherwise required by law. Power Integrations and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners. POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 NET REVENUES $ 106,297 $ 124,770 $ 182,149 COST OF REVENUES 52,340 57,416 81,474 GROSS PROFIT 53,957 67,354 100,675 OPERATING EXPENSES: Research and development 23,981 23,504 23,678 Sales and marketing 15,885 15,493 16,155 General and administrative 8,334 7,465 9,614 Amortization of acquisition-related intangible assets - - 181 Total operating expenses 48,200 46,462 49,628 INCOME FROM OPERATIONS 5,757 20,892 51,047 OTHER INCOME 1,714 785 554 INCOME BEFORE INCOME TAXES 7,471 21,677 51,601 PROVISION (BENEFIT) FOR INCOME TAXES 596 (1,138 ) 5,353 NET INCOME $ 6,875 $ 22,815 $ 46,248 EARNINGS PER SHARE: Basic $ 0.12 $ 0.40 $ 0.78 Diluted $ 0.12 $ 0.40 $ 0.77 SHARES USED IN PER-SHARE CALCULATION: Basic 57,105 57,094 59,238 Diluted 57,579 57,535 60,107 SUPPLEMENTAL INFORMATION: Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Stock-based compensation expenses included in: Cost of revenues $ 301 $ 405 $ 320 Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total stock-based compensation expense $ 7,368 $ 6,654 $ 9,013 Cost of revenues includes: Amortization of acquisition-related intangible assets $ 482 $ 482 $ 482 Three Months Ended REVENUE MIX BY END MARKET March 31, 2023 December 31, 2022 March 31, 2022 Communications 28 % 23 % 26 % Computer 14 % 12 % 10 % Consumer 24 % 26 % 35 % Industrial 34 % 39 % 29 % POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 53,957 $ 67,354 $ 100,675 GAAP gross margin 50.8 % 54.0 % 55.3 % Stock-based compensation included in cost of revenues 301 405 320 Amortization of acquisition-related intangible assets 482 482 482 Non-GAAP gross profit $ 54,740 $ 68,241 $ 101,477 Non-GAAP gross margin 51.5 % 54.7 % 55.7 % Three Months Ended RECONCILIATION OF OPERATING EXPENSES March 31, 2023 December 31, 2022 March 31, 2022 GAAP operating expenses $ 48,200 $ 46,462 $ 49,628 Less: Stock-based compensation expense included in operating expenses Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total 7,067 6,249 8,693 Amortization of acquisition-related intangible assets - - 181 Non-GAAP operating expenses $ 41,133 $ 40,213 $ 40,754 Three Months Ended RECONCILIATION OF INCOME FROM OPERATIONS March 31, 2023 December 31, 2022 March 31, 2022 GAAP income from operations $ 5,757 $ 20,892 $ 51,047 GAAP operating margin 5.4 % 16.7 % 28.0 % Add: Total stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Non-GAAP income from operations $ 13,607 $ 28,028 $ 60,723 Non-GAAP operating margin 12.8 % 22.5 % 33.3 % Three Months Ended RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES March 31, 2023 December 31, 2022 March 31, 2022 GAAP provision (benefit) for income taxes $ 596 $ (1,138 ) $ 5,353 GAAP effective tax rate 8.0 % -5.2 % 10.4 % Tax effect of adjustments to GAAP results (501 ) (2,085 ) (122 ) Non-GAAP provision for income taxes $ 1,097 $ 947 $ 5,475 Non-GAAP effective tax rate 7.2 % 3.3 % 8.9 % Three Months Ended RECONCILIATION OF NET INCOME PER SHARE (DILUTED) March 31, 2023 December 31, 2022 March 31, 2022 GAAP net income $ 6,875 $ 22,815 $ 46,248 Adjustments to GAAP net income Stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Tax effect of items excluded from non-GAAP results (501 ) (2,085 ) (122 ) Non-GAAP net income $ 14,224 $ 27,866 $ 55,802 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 57,579 57,535 60,107 Non-GAAP net income per share (diluted) $ 0.25 $ 0.48 $ 0.93 GAAP net income per share (diluted) $ 0.12 $ 0.40 $ 0.77 POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) March 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 94,189 $ 105,372 Short-term marketable securities 264,439 248,441 Accounts receivable, net 20,585 20,836 Inventories 142,444 135,420 Prepaid expenses and other current assets 17,538 15,004 Total current assets 539,195 525,073 PROPERTY AND EQUIPMENT, net 173,506 176,681 INTANGIBLE ASSETS, net 6,054 6,597 GOODWILL 91,849 91,849 DEFERRED TAX ASSETS 19,771 19,034 OTHER ASSETS 21,030 20,862 Total assets $ 851,405 $ 840,096 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 34,694 $ 30,088 Accrued payroll and related expenses 13,442 14,778 Taxes payable 667 938 Other accrued liabilities 14,259 12,572 Total current liabilities 63,062 58,376 LONG-TERM LIABILITIES: Income taxes payable 15,741 15,757 Other liabilities 10,300 10,747 Total liabilities 89,103 84,880 STOCKHOLDERS' EQUITY: Common stock 23 24 Additional paid-in capital 8,780 - Accumulated other comprehensive loss (5,044 ) (7,344 ) Retained earnings 758,543 762,536 Total stockholders' equity 762,302 755,216 Total liabilities and stockholders' equity $ 851,405 $ 840,096 POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,875 $ 22,815 $ 46,248 Adjustments to reconcile net income to cash provided by operating activities Depreciation 8,961 8,875 8,408 Amortization of intangible assets 543 544 724 Loss on disposal of property and equipment 7 209 75 Stock-based compensation expense 7,368 6,654 9,013 Amortization of premium on marketable securities 404 654 937 Deferred income taxes (738 ) 4,824 (936 ) Increase (decrease) in accounts receivable allowance for credit losses (454 ) - 75 Change in operating assets and liabilities: Accounts receivable 705 (4,761 ) 10,660 Inventories (7,024 ) (15,328 ) (3,849 ) Prepaid expenses and other assets (2,302 ) (1,085 ) 1,552 Accounts payable 2,926 2,038 (1,709 ) Taxes payable and other accrued liabilities (686 ) (1,341 ) 3,399 Net cash provided by operating activities 16,585 24,098 74,597 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (4,082 ) (5,767 ) (14,700 ) Proceeds from sale of property and equipment - - 1,202 Purchases of marketable securities (36,922 ) (28,576 ) (15,121 ) Proceeds from sales and maturities of marketable securities 22,693 11,151 108,817 Net cash provided by (used in) investing activities (18,311 ) (23,192 ) 80,198 CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 3,098 - 3,057 Repurchase of common stock (1,687 ) (18,745 ) (134,689 ) Payments of dividends to stockholders (10,868 ) (10,263 ) (10,656 ) Net cash used in financing activities (9,457 ) (29,008 ) (142,288 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,183 ) (28,102 ) 12,507 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 105,372 133,474 158,117 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,189 $ 105,372 $ 170,624 View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005981/en/Contacts Joe Shiffler Power Integrations, Inc. (408) 414-8528 joe@power.com
Revenues were $106.3 million; GAAP earnings were $0.12 per diluted share; non-GAAP earnings were $0.25 per diluted share
Power Integrations (NASDAQ: POWI) today announced financial results for the quarter ended March 31, 2023. Net revenues for the first quarter were $106.3 million, down 15 percent compared to the prior quarter and down 42 percent from the first quarter of 2022. Net income for the first quarter was $6.9 million or $0.12 per diluted share compared to $0.40 per diluted share in the prior quarter and $0.77 per diluted share in the first quarter of 2022. Cash flow from operations for the first quarter was $16.6 million. In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the first quarter of 2023 was $14.2 million or $0.25 per diluted share compared to $0.48 per diluted share in the prior quarter and $0.93 per diluted share in the first quarter of 2022. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release. Commented Balu Balakrishnan, president and CEO of Power Integrations: “First-quarter revenues were in line with our expectations, and sell-through exceeded sell-in by a wider-than-expected margin. The resulting reduction in distributor inventories combined with improved order trends indicates that while end-market demand remains subdued, our revenues have bottomed and a cyclical recovery is underway. “Meanwhile, we continue to gain share in a variety of end-markets while making excellent progress on growth initiatives such as motor-drive, automotive and our proprietary gallium-nitride technology. In March we introduced our first 900-volt GaN products, bringing the benefits of GaN to a wider range of industrial and appliance applications. The new 900-volt products include our first GaN-based ICs for the EV market, where the efficiency and size benefits of GaN are critical as carmakers power more systems from the main battery.” Power Integrations paid a dividend of $0.19 per share on March 31, 2023. A dividend of $0.19 per share is to be paid on June 30, 2023, to stockholders of record as of May 31, 2023. Financial Outlook The company issued the following forecast for the second quarter of 2023: Revenues are expected to be $122 million plus or minus $5 million. GAAP gross margin is expected to be approximately 51.5 percent, and non-GAAP gross margin is expected to be approximately 52 percent. The difference between GAAP and non-GAAP gross margins is approximately equally attributable to stock-based compensation and amortization of acquisition-related intangible assets. GAAP operating expenses are expected to be approximately $52.5 million; non-GAAP operating expenses are expected to be approximately $44.5 million. Non-GAAP expenses are expected to exclude about $8 million of stock-based compensation. 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 register for the call by visiting the following link: https://conferencingportals.com/event/tVwwQxvn. A live webcast of 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 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. 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. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release. Note Regarding Forward-Looking Statements The above statements regarding the company’s forecast for its second-quarter financial performance, that revenues have bottomed and that a recovery is underway are forward-looking statements reflecting management's current expectations and beliefs. These statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these statements. These risks and uncertainties include, but are not limited to: the impact of the COVID-19 pandemic on demand for the company’s products, its ability to supply products and its ability to conduct other aspects of its business such as competing for new design wins; changes in global economic and geopolitical conditions, including such factors as inflation, armed conflicts and trade negotiations, which may impact the level of demand for the company’s products; 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 effects of competition, which may cause the company’s revenues to decrease or cause the company to decrease its selling prices for its products; unforeseen costs and expenses; and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or 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 that may cause actual results to differ 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 (SEC) on February 7, 2023. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether because of new information, future events or otherwise, except as otherwise required by law. Power Integrations and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners. POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 NET REVENUES $ 106,297 $ 124,770 $ 182,149 COST OF REVENUES 52,340 57,416 81,474 GROSS PROFIT 53,957 67,354 100,675 OPERATING EXPENSES: Research and development 23,981 23,504 23,678 Sales and marketing 15,885 15,493 16,155 General and administrative 8,334 7,465 9,614 Amortization of acquisition-related intangible assets - - 181 Total operating expenses 48,200 46,462 49,628 INCOME FROM OPERATIONS 5,757 20,892 51,047 OTHER INCOME 1,714 785 554 INCOME BEFORE INCOME TAXES 7,471 21,677 51,601 PROVISION (BENEFIT) FOR INCOME TAXES 596 (1,138 ) 5,353 NET INCOME $ 6,875 $ 22,815 $ 46,248 EARNINGS PER SHARE: Basic $ 0.12 $ 0.40 $ 0.78 Diluted $ 0.12 $ 0.40 $ 0.77 SHARES USED IN PER-SHARE CALCULATION: Basic 57,105 57,094 59,238 Diluted 57,579 57,535 60,107 SUPPLEMENTAL INFORMATION: Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Stock-based compensation expenses included in: Cost of revenues $ 301 $ 405 $ 320 Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total stock-based compensation expense $ 7,368 $ 6,654 $ 9,013 Cost of revenues includes: Amortization of acquisition-related intangible assets $ 482 $ 482 $ 482 Three Months Ended REVENUE MIX BY END MARKET March 31, 2023 December 31, 2022 March 31, 2022 Communications 28 % 23 % 26 % Computer 14 % 12 % 10 % Consumer 24 % 26 % 35 % Industrial 34 % 39 % 29 % POWER INTEGRATIONS, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS (in thousands, except per-share amounts) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 RECONCILIATION OF GROSS PROFIT GAAP gross profit $ 53,957 $ 67,354 $ 100,675 GAAP gross margin 50.8 % 54.0 % 55.3 % Stock-based compensation included in cost of revenues 301 405 320 Amortization of acquisition-related intangible assets 482 482 482 Non-GAAP gross profit $ 54,740 $ 68,241 $ 101,477 Non-GAAP gross margin 51.5 % 54.7 % 55.7 % Three Months Ended RECONCILIATION OF OPERATING EXPENSES March 31, 2023 December 31, 2022 March 31, 2022 GAAP operating expenses $ 48,200 $ 46,462 $ 49,628 Less: Stock-based compensation expense included in operating expenses Research and development 2,668 2,716 3,055 Sales and marketing 1,653 1,643 1,948 General and administrative 2,746 1,890 3,690 Total 7,067 6,249 8,693 Amortization of acquisition-related intangible assets - - 181 Non-GAAP operating expenses $ 41,133 $ 40,213 $ 40,754 Three Months Ended RECONCILIATION OF INCOME FROM OPERATIONS March 31, 2023 December 31, 2022 March 31, 2022 GAAP income from operations $ 5,757 $ 20,892 $ 51,047 GAAP operating margin 5.4 % 16.7 % 28.0 % Add: Total stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Non-GAAP income from operations $ 13,607 $ 28,028 $ 60,723 Non-GAAP operating margin 12.8 % 22.5 % 33.3 % Three Months Ended RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES March 31, 2023 December 31, 2022 March 31, 2022 GAAP provision (benefit) for income taxes $ 596 $ (1,138 ) $ 5,353 GAAP effective tax rate 8.0 % -5.2 % 10.4 % Tax effect of adjustments to GAAP results (501 ) (2,085 ) (122 ) Non-GAAP provision for income taxes $ 1,097 $ 947 $ 5,475 Non-GAAP effective tax rate 7.2 % 3.3 % 8.9 % Three Months Ended RECONCILIATION OF NET INCOME PER SHARE (DILUTED) March 31, 2023 December 31, 2022 March 31, 2022 GAAP net income $ 6,875 $ 22,815 $ 46,248 Adjustments to GAAP net income Stock-based compensation 7,368 6,654 9,013 Amortization of acquisition-related intangible assets 482 482 663 Tax effect of items excluded from non-GAAP results (501 ) (2,085 ) (122 ) Non-GAAP net income $ 14,224 $ 27,866 $ 55,802 Average shares outstanding for calculation of non-GAAP net income per share (diluted) 57,579 57,535 60,107 Non-GAAP net income per share (diluted) $ 0.25 $ 0.48 $ 0.93 GAAP net income per share (diluted) $ 0.12 $ 0.40 $ 0.77 POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS (in thousands) March 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 94,189 $ 105,372 Short-term marketable securities 264,439 248,441 Accounts receivable, net 20,585 20,836 Inventories 142,444 135,420 Prepaid expenses and other current assets 17,538 15,004 Total current assets 539,195 525,073 PROPERTY AND EQUIPMENT, net 173,506 176,681 INTANGIBLE ASSETS, net 6,054 6,597 GOODWILL 91,849 91,849 DEFERRED TAX ASSETS 19,771 19,034 OTHER ASSETS 21,030 20,862 Total assets $ 851,405 $ 840,096 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 34,694 $ 30,088 Accrued payroll and related expenses 13,442 14,778 Taxes payable 667 938 Other accrued liabilities 14,259 12,572 Total current liabilities 63,062 58,376 LONG-TERM LIABILITIES: Income taxes payable 15,741 15,757 Other liabilities 10,300 10,747 Total liabilities 89,103 84,880 STOCKHOLDERS' EQUITY: Common stock 23 24 Additional paid-in capital 8,780 - Accumulated other comprehensive loss (5,044 ) (7,344 ) Retained earnings 758,543 762,536 Total stockholders' equity 762,302 755,216 Total liabilities and stockholders' equity $ 851,405 $ 840,096 POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,875 $ 22,815 $ 46,248 Adjustments to reconcile net income to cash provided by operating activities Depreciation 8,961 8,875 8,408 Amortization of intangible assets 543 544 724 Loss on disposal of property and equipment 7 209 75 Stock-based compensation expense 7,368 6,654 9,013 Amortization of premium on marketable securities 404 654 937 Deferred income taxes (738 ) 4,824 (936 ) Increase (decrease) in accounts receivable allowance for credit losses (454 ) - 75 Change in operating assets and liabilities: Accounts receivable 705 (4,761 ) 10,660 Inventories (7,024 ) (15,328 ) (3,849 ) Prepaid expenses and other assets (2,302 ) (1,085 ) 1,552 Accounts payable 2,926 2,038 (1,709 ) Taxes payable and other accrued liabilities (686 ) (1,341 ) 3,399 Net cash provided by operating activities 16,585 24,098 74,597 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (4,082 ) (5,767 ) (14,700 ) Proceeds from sale of property and equipment - - 1,202 Purchases of marketable securities (36,922 ) (28,576 ) (15,121 ) Proceeds from sales and maturities of marketable securities 22,693 11,151 108,817 Net cash provided by (used in) investing activities (18,311 ) (23,192 ) 80,198 CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock 3,098 - 3,057 Repurchase of common stock (1,687 ) (18,745 ) (134,689 ) Payments of dividends to stockholders (10,868 ) (10,263 ) (10,656 ) Net cash used in financing activities (9,457 ) (29,008 ) (142,288 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,183 ) (28,102 ) 12,507 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 105,372 133,474 158,117 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 94,189 $ 105,372 $ 170,624 View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005981/en/