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Power Integrations Reports First-Quarter Financial Results
In addition to its GAAP results, the company provided non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the related tax effects. Non-GAAP net income for the first quarter of 2024 was $10.5 million or $0.18 per diluted share compared to $0.22 per diluted share in the prior quarter and $0.25 per diluted share in the first quarter of 2023. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release.
Commented Balu Balakrishnan, chairman and CEO of Power Integrations: "Orders have improved in recent months as supply-chain inventories continue to normalize. We expect sequentially higher revenues in the second quarter, accompanied by a further increase in gross margin driven by the dollar/yen exchange rate and higher manufacturing utilization."
Mr. Balakrishnan continued: "We further advanced the state of the art in power-conversion technology in the first quarter with the introduction of InnoMux(TM)-2. The new ICs provide multiple, independently regulated DC outputs, eliminating the need for separate DC-DC stages and greatly increasing efficiency. The efficiency of InnoMux-2 is further enhanced by our PowiGaN(TM) transistors, bringing total system efficiency to more than 90 percent. Meanwhile, our acquisition of the assets of Odyssey Semiconductor augments our efforts to develop high-current GaN and bring the benefits of GaN technology to much higher-power applications."
Additional Highlights
Power Integrations has agreed to acquire the assets of Odyssey Semiconductor Technologies, augmenting the company's development of high-power gallium-nitride (GaN) switching technology. The purchase is expected to close in July 2024. During the first quarter Power Integrations repurchased 207 thousand shares of its common stock for $14.6 million; the company had $11.3 million remaining on its repurchase authorization as of March 31, 2024. Power Integrations paid a dividend of $0.20 per share on March 28, 2024; a dividend of $0.20 per share will be paid on June 28, 2024, to stockholders of record as of May 31, 2024.
Financial Outlook
The company issued the following forecast for the second quarter of 2024:
Revenues are expected to be $105 million plus or minus $5 million. GAAP gross margin is expected to be between 52.5 percent and 53.0 percent; non-GAAP gross margin is expected to be between 53.5 percent and 54.0 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 between $54.5 million and $55 million; non-GAAP operating expenses are expected to be between $44.5 million and $45 million. Non-GAAP operating expenses are expected to exclude approximately $10 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://registrations.events/direct/Q4I245880. 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 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 company's 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 on February 12, 2024. 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, InnoMux, PowiGaN 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 Three Months Ended
March 31, 2024 March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
-------------------------------------------------------- --------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
NET REVENUES $ 91,688 $ $ 89,507 $ $ 106,297
COST OF REVENUES 43,908 43,299 52,340
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
GROSS PROFIT 47,780 46,208 53,957
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
OPERATING EXPENSES:
Research and development 23,225 23,505 23,981
Sales and marketing 15,722 15,472 15,885
General and administrative 8,363 8,282 8,334
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total operating expenses 47,310 47,259 48,200
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
INCOME (LOSS) FROM OPERATIONS 470 (1,051 ) 5,757
-------------------------------------------------------- --------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
OTHER INCOME 3,502 3,282 1,714
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
INCOME BEFORE INCOME TAXES 3,972 2,231 7,471
PROVISION (BENEFIT) FOR INCOME TAXES 18 (12,040 ) 596
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
NET INCOME $ 3,954 $ $ 14,271 $ $ 6,875
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
EARNINGS PER SHARE:
Basic $ 0.07 $ $ 0.25 $ $ 0.12
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
Diluted $ 0.07 $ $ 0.25 $ $ 0.12
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
SHARES USED IN PER-SHARE CALCULATION:
Basic 56,833 56,937 57,105
Diluted 57,132 57,272 57,579
SUPPLEMENTAL INFORMATION: Three Months Ended
March 31, 2024 March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
-------------------------------------------------------- --------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
Stock-based compensation expenses included in:
Cost of revenues $ 346 $ $ 499 $ $ 301
Research and development 2,425 2,947 2,668
Sales and marketing 1,604 1,827 1,653
General and administrative 2,039 2,230 2,746
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total stock-based compensation expense $ 6,414 $ $ 7,503 $ $ 7,368
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
Cost of revenues includes:
Amortization of acquisition-related intangible assets $ 482 $ $ 482 $ $ 482
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ======= ====================
Three Months Ended Three Months Ended
REVENUE MIX BY END MARKET March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
Communications 11 % 27 % 28 %
Computer 11 % 9 % 14 %
Consumer 41 % 29 % 24 %
Industrial 37 % 35 % 34 %
POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)
Three Months Ended Three Months Ended
March 31, 2024 March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- --------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------
RECONCILIATION OF GROSS PROFIT
GAAP gross profit $ 47,780 $ $ 46,208 $ $ 53,957
GAAP gross margin 52.1 % 51.6 % 50.8 %
Stock-based compensation included in cost of revenues 346 499 301
Amortization of acquisition-related intangible assets 482 482 482
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP gross profit $ 48,608 $ $ 47,189 $ $ 54,740
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP gross margin 53.0 % 52.7 % 51.5 %
Three Months Ended Three Months Ended
RECONCILIATION OF OPERATING EXPENSES March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------
GAAP operating expenses $ 47,310 $ $ 47,259 $ $ 48,200
Less: Stock-based compensation expense included in operating expenses
Research and development 2,425 2,947 2,668
Sales and marketing 1,604 1,827 1,653
General and administrative 2,039 2,230 2,746
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Total 6,068 7,004 7,067
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP operating expenses $ 41,242 $ $ 40,255 $ $ 41,133
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Three Months Ended Three Months Ended
RECONCILIATION OF INCOME FROM OPERATIONS March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------
GAAP income (loss) from operations $ 470 $ $ (1,051 ) $ $ 5,757
GAAP operating margin 0.5 % -1.2 % 5.4 %
Add: Stock-based compensation 6,414 7,503 7,368
Amortization of acquisition-related intangible assets 482 482 482
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP income from operations $ 7,366 $ $ 6,934 $ $ 13,607
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP operating margin 8.0 % 7.7 % 12.8 %
Three Months Ended Three Months Ended
RECONCILIATION OF PROVISION FOR INCOME TAXES March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------
GAAP provision (benefit) for income taxes $ 18 $ $ (12,040 ) $ $ 596
GAAP effective tax rate 0.5 % -539.7 % 8.0 %
Tax effect of adjustments to GAAP results (358 ) (9,556 ) (501 )
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP provision (benefit) for income taxes $ 376 $ $ (2,484 ) $ $ 1,097
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP effective tax rate 3.5 % -24.3 % 7.2 %
Three Months Ended Three Months Ended
RECONCILIATION OF NET INCOME PER SHARE (DILUTED) March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
--------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------
GAAP net income $ 3,954 $ $ 14,271 $ $ 6,875
Adjustments to GAAP net income
Stock-based compensation 6,414 7,503 7,368
Amortization of acquisition-related intangible assets 482 482 482
Tax effect of items excluded from non-GAAP results (358 ) (9,556 ) (501 )
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP net income $ 10,492 $ $ 12,700 $ $ 14,224
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Average shares outstanding for calculation
of non-GAAP net income per share (diluted) 57,132 57,272 57,579
-------------------- ------ -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Non-GAAP net income per share (diluted) $ 0.18 $ $ 0.22 $ $ 0.25
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ====== ====================
GAAP net income per share (diluted) $ 0.07 $ $ 0.25 $ $ 0.12
==================== ====== ==================== ==================== ==================== ======= ==================== ==================== ==================== ====== ====================
POWER INTEGRATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2024 March 31, 2024 December 31, 2023 December 31, 2023
--------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 56,443 $ $ 63,929
Short-term marketable securities 243,163 247,640
Accounts receivable, net 12,279 14,674
Inventories 167,865 163,164
Prepaid expenses and other current assets 22,714 22,193
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total current assets 502,464 511,600
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
PROPERTY AND EQUIPMENT, net 159,945 164,213
INTANGIBLE ASSETS, net 3,881 4,424
GOODWILL 91,849 91,849
DEFERRED TAX ASSETS 29,654 28,325
OTHER ASSETS 17,983 19,457
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total assets $ 805,776 $ $ 819,868
==================== ======= ==================== ==================== ==================== ======= ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 27,361 $ $ 26,390
Accrued payroll and related expenses 11,822 13,551
Taxes payable 878 1,016
Other accrued liabilities 9,474 7,910
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total current liabilities 49,535 48,867
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
LONG-TERM LIABILITIES:
Income taxes payable 6,193 6,244
Other liabilities 11,870 12,516
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total liabilities 67,598 67,627
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
STOCKHOLDERS' EQUITY:
Common stock 22 23
Additional paid-in capital - -
Accumulated other comprehensive loss (2,559 ) (1,462 )
Retained earnings 740,715 753,680
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total stockholders' equity 738,178 752,241
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Total liabilities and stockholders' equity $ 805,776 $ $ 819,868
==================== ======= ==================== ==================== ==================== ======= ====================
POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended Three Months Ended
March 31, 2024 March 31, 2024 December 31, 2023 December 31, 2023 March 31, 2023 March 31, 2023
------------------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,954 $ $ 14,271 $ $ 6,875
Adjustments to reconcile net income to cash provided by operating activities
Depreciation 8,715 8,887 8,961
Amortization of intangible assets 543 543 543
Loss on disposal of property and equipment 8 14 7
Stock-based compensation expense 6,414 7,503 7,368
Amortization of premium (accretion of discount) on marketable securities (496 ) (497 ) 404
Deferred income taxes (1,330 ) 705 (738 )
Increase (decrease) in accounts receivable allowance for credit losses 163 - (454 )
Change in operating assets and liabilities:
Accounts receivable 2,232 13,865 705
Inventories (4,701 ) (12,918 ) (7,024 )
Prepaid expenses and other assets 846 (346 ) (2,302 )
Accounts payable 1,294 (2,553 ) 2,926
Taxes payable and other accrued liabilities (1,737 ) (13,207 ) (686 )
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net cash provided by operating activities 15,905 16,267 16,585
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,343 ) (6,143 ) (4,082 )
Purchases of marketable securities (49,912 ) (18,196 ) (36,922 )
Proceeds from sales and maturities of marketable securities 54,198 36,045 22,693
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net cash provided by (used in) investing activities (57 ) 11,706 (18,311 )
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 2,691 - 3,098
Repurchase of common stock (14,641 ) (47,444 ) (1,687 )
Payments of dividends to stockholders (11,384 ) (11,343 ) (10,868 )
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net cash used in financing activities (23,334 ) (58,787 ) (9,457 )
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (7,486 ) (30,814 ) (11,183 )
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 63,929 94,743 105,372
-------------------- ------- -------------------- -------------------- -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507489900/en/
SOURCE: Power Integrations, Inc.
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Joe Shiffler Power Integrations, Inc. (408) 414-8528 joe@power.com
COMTEX_452025791/1006/2024-05-07T16:01:05