Power Integrations Reports Fourth-Quarter Financial Results

February 7, 2019

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb 7, 2019--Power Integrations (Nasdaq: POWI ) today announced financial results for the quarter and year ended December 31, 2018. Net revenues for the fourth quarter were $93.3 million, down 15 percent from the prior quarter and down 14 percent from the fourth quarter of 2017. Net income was $22.7 million or $0.77 per diluted share, including a tax benefit reflecting the revision of prior estimates of the transition tax from the 2017 U.S. tax legislation. This compares to net income of $0.59 per diluted share in the prior quarter and a net loss of $0.57 per share in the fourth quarter of 2017, in which the company incurred a charge associated with the tax legislation. Cash flow from operations was $18.3 million for the fourth quarter.

For the full year, net revenues were $416.0 million, a decrease of four percent compared to 2017. GAAP net income for the full year was $70.0 million or $2.32 per diluted share, compared to $0.90 per diluted share in 2017. Cash flow from operations for the full year was $84.0 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, the tax effects of these items, and the above-mentioned tax benefit and charge associated with the 2017 tax legislation. Non-GAAP net income for the fourth quarter of 2018 was $15.9 million or $0.54 per diluted share, compared with $0.77 per diluted share in the prior quarter and $0.74 per diluted share in the fourth quarter of 2017. Non-GAAP net income for the full year was $81.7 million or $2.71 per diluted share, compared to $2.84 per diluted share in 2017.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “Our fourth-quarter results and first-quarter outlook reflect the current slowdown in demand across the industry. Nevertheless, we are well positioned to capitalize on a range of secular opportunities in the year ahead, including faster charging for mobile devices, energy efficiency, smart homes and appliances, renewable energy, and battery-powered tools and transportation. Our new BridgeSwitch™ ICs expand our opportunity in appliances and other motor-drive applications, adding about half a billion dollars to our addressable market.”

Additional Highlights

Power Integrations repurchased approximately 488,000 shares of its common stock during the fourth quarter, utilizing $28.8 million. At quarter end, $51.2 million remained available in the company’s repurchase authorization. The company paid a dividend of $0.16 per share on December 31, 2018. The company’s board has declared dividends of $0.17 per share for each quarter of 2019, the first of which is scheduled to be paid on March 29 to stockholders of record as of February 28.

Financial Outlook

The company issued the following forecast for the first quarter of 2019:

Revenues are expected to be $90 million plus or minus $3 million. GAAP gross margin is expected to be approximately 51 percent. Non-GAAP gross margin is expected to be approximately 52 percent. (The difference between the expected GAAP and non-GAAP gross margins is composed of approximately 0.7 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 between $41 million and $41.5 million; non-GAAP operating expenses are expected to be between $35 million and $35.5 million. (Non-GAAP expenses are expected to exclude approximately $5.5 million of stock-based compensation and $0.5 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. Pacific time. Members of the investment community can join the call by dialing 1-647-689-4187. The call will also be available on the investor section of the company’s website, .

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 .

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 (including in-place lease intangible assets), the tax effects of these items, and tax charges and benefits associated with the 2017 U.S. tax legislation. 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. These 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 first-quarter financial performance are forward-looking statements reflecting management’s current expectations and beliefs. These forward-looking 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: changes in global macroeconomic conditions, including changing tariffs and uncertainty regarding 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; the outcome and cost of patent litigation, which may affect sales of the company’s products or could result in higher expenses and charges than currently expected; 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 14, 2018. 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, BridgeSwitch and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190207005831/en/

CONTACT: Joe Shiffler

Power Integrations, Inc.

(408) 414-8528




SOURCE: Power Integrations, Inc.

Copyright Business Wire 2019.

PUB: 02/07/2019 04:02 PM/DISC: 02/07/2019 04:02 PM


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