SAN JOSE, Calif., Oct. 27, 2010 (GLOBE NEWSWIRE) -- Power Integrations (Nasdaq:POWI), the leader in high-voltage integrated circuits for energy-efficient power conversion, today announced financial results for the quarter ended September 30, 2010.
Net revenues for the third quarter were $75.5 million, up 26 percent compared with the third quarter of 2009, and down six percent compared with the second quarter of 2010. Net income was $12.6 million or $0.43 per diluted share, compared with $9.2 million or $0.32 per diluted share in the year-ago quarter and $15.6 million or $0.53 per diluted share in the second quarter of 2010. Gross margin for the third quarter was 51.7 percent; operating margin was 20.2 percent.
In addition to its GAAP results, the company provided certain non-GAAP financial measures that exclude stock-based compensation expenses and the related tax effects. Non-GAAP net income for the third quarter was $15.5 million or $0.53 per diluted share, compared with $10.4 million or $0.36 per diluted share in the year-ago quarter and $17.7 million or $0.60 per diluted share, in the second quarter of 2010. Non-GAAP gross margin for the third quarter was 51.9 percent; non-GAAP operating margin was 24.1 percent.
Commented Balu Balakrishnan, president and CEO of Power Integrations, "As discussed in our earnings announcement last quarter, a transition in our European distribution relationships caused some sales to be accelerated into the second quarter at the expense of third-quarter sales. We believe this timing issue accounted for most of the sequential decrease in our third-quarter revenues. Nevertheless, revenues increased 26 percent versus last year's strong third quarter, and we believe we are on track for full-year revenue growth of between 36 percent and 39 percent."
Balakrishnan continued: "Like many of our peers, we are seeing a moderation in sales as the supply chain digests an apparent excess of inventory. Cyclical fluctuations notwithstanding, we believe we are continuing to gain share in the power-supply market by enabling customers to meet increasingly stringent efficiency specs without adding cost and complexity. In fact, designers looking to cut standby waste all the way to zero can now do so with our new 'Zero' series of products. Our new LinkZero™-AX family, used in conjunction with our recently introduced CapZero™ and SenZero™ power-saving products, enables designers to achieve 0.00 watts of standby waste in appliances, TVs and other products that utilize an auxiliary power supply."
Additional Highlights
- Power Integrations paid a quarterly dividend of $0.05 per share on September 30, 2010. The next quarterly dividend of $0.05 per share will be paid on December 31, 2010 to stockholders of record as of November 30, 2010.
- Power Integrations received and acquired a total of 20 U.S. patents and 5 foreign patents during the quarter, and had a total of 329 U.S. patents and 201 foreign patents as of September 30, 2010.
- On October 22, Power Integrations announced a strategic investment in SemiSouth Laboratories, a Mississippi-based manufacturer of high-voltage silicon-carbide (SiC) power devices. Power Integrations' commitment of $30 million, which includes an equity investment in SemiSouth, a technology license and other financial commitments, will help drive the continued expansion of SemiSouth's SiC fabrication facility. The companies will collaborate to drive adoption of SemiSouth's SiC technology, which enables ultra-efficient power conversion for solar and wind inverters, hybrid/electric vehicles and other very high-power applications that benefit from exceptionally high energy efficiency.
Financial Outlook
The company expects its fourth-quarter revenues to be between $67 million and $73 million. Fourth-quarter gross margin is expected to be between 49 percent and 50 percent, with operating expenses between $24 million and $25 million including approximately $3 million of stock-based compensation expenses.
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 1-877-303-9795 from within the United States or 1-631-291-4581 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
Power Integrations is the leading supplier of high-voltage analog integrated circuits used in energy-efficient power conversion. The company's innovative technology enables compact, energy-efficient power supplies in a wide range of electronic products, in AC-DC, DC-DC and LED lighting applications. Since its introduction in 1998, Power Integrations' EcoSmart™ energy-efficiency technology has saved an estimated $4.4 billion of standby energy waste and prevented millions of tons of CO2 emissions. The company's Green Room web site (www.powerint.com/greenroom) provides a wealth of information about "energy vampires" and the issue of standby energy waste, along with a comprehensive guide to energy-efficiency standards around the world. Reflecting the environmental benefits of EcoSmart technology, Power Integrations is included in clean-technology stock indices sponsored by the Cleantech Group (Amex:CTIUS) and Clean Edge (Nasdaq:CELS). For more information, please visit www.powerint.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 Accounting Standard Codification 718-20 ("ASC 718-20"), and the related tax effects. The company uses these non-GAAP measures in its own financial and operational decision-making processes 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 non-GAAP 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 financial measures differently, limiting their usefulness as comparative measures.
Note Regarding Forward-Looking Statements
The statements in this press release relating to the company's projected fourth-quarter 2010 financial performance and its future collaborative efforts with SemiSouth are forward-looking statements, reflecting management's current forecast. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt changes. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: changes in global macroeconomic conditions that may impact the level of demand for the company's products; the ability of the company to obtain sufficient quantities of wafers in a timely manner from its suppliers; 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 company's ability to maintain and establish strategic relationships; the effects of competition; customer reaction to the effects of design wins may not be as the company expects; the risks inherent in the development and delivery of complex technologies; the outcome and cost of patent litigation; the company's ability to attract, retain and motivate qualified personnel; the emergence of new markets for the company's products and services; the company's ability to compete in those markets based on timeliness, cost and market demand; unforeseen costs and expenses; fluctuations in currency exchange rates; and SemiSouth's progress in the development of its technology. 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 are more fully explained under the caption "Risk Factors" in the company's most recent quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) on August 6, 2010. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by the rules and regulations of the SEC.
Power Integrations, EcoSmart, LinkZero, CapZero, SenZero and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are the property of their respective owners.
CONTACT: Power Integrations, Inc. Joe Shiffler (408) 414-8528 jshiffler@powerint.com