Exhibit 99.1
Power Integrations Reports Third-Quarter Financial Results
Non-GAAP gross margin expanded to 52.9 percent; non-GAAP earnings were $0.49 per diluted share
GAAP gross margin was 49.7%; charge related to SemiSouth results in GAAP net loss of $1.54 per share
Announces $50 million share-repurchase authorization
SAN JOSE, Calif.--(BUSINESS WIRE)--October 25, 2012--Power Integrations (Nasdaq:POWI) today announced financial results for the quarter ended September 30, 2012. Net revenues for the quarter were $78.0 million, up two percent from the prior quarter and up four percent compared with the third quarter of 2011. GAAP gross margin for the quarter was 49.7 percent.
As announced earlier this week, the company’s third-quarter results include a pre-tax charge of $59.2 million stemming from the likely closure of SemiSouth Laboratories. The expected cash outflow included in the charge is $15.3 million. Including the charge, the company reported a GAAP net loss for the quarter of $44.4 million or $1.54 per share. This compares to a net loss of $0.25 per share in the prior quarter and net income of $0.25 per diluted share in the year-ago quarter. The loss in the prior quarter was driven by the settlement of the company’s tax audit for years 2003-2006, which resulted in a one-time net charge of $15.7 million in the second quarter.
In addition to its GAAP results, the company provided certain non-GAAP financial measures that, for the third quarter, exclude stock-based compensation expenses, certain acquisition-related costs and expenses, the charge related to SemiSouth, non-cash interest income, and the tax effects of these items. Non-GAAP gross margin for the third quarter was 52.9 percent. Non-GAAP net income for the quarter was $14.5 million or $0.49 per diluted share, compared with $0.49 per diluted share in the prior quarter and $0.32 per diluted share in the third quarter of 2011.
Commented Balu Balakrishnan, president and CEO of Power Integrations: “While third-quarter revenues were in line with our forecast, we expect lower revenues in the fourth quarter as global economic conditions continue to weigh on end demand across the industry. However, our gross margin expanded again in the third quarter and has improved significantly over the past year thanks to the substantial cost reductions we have achieved, plus the benefit of a more favorable end-market mix. While the impact of mix will fluctuate over time, we expect our gross margin to remain at a similar level in the fourth quarter.”
Mr. Balakrishnan continued: “While the SemiSouth outcome is disappointing, our strategic direction remains unchanged, and we continue to invest in high-power driver and switch technologies to expand our addressable market within the realm of high-voltage power conversion. For example, our acquisition of CT-Concept earlier this year added nearly half a billion dollars to our addressable market and gives us a presence in high-power markets such as industrial motors, renewable energy and electric transportation. With our first full quarter as a combined company now behind us, we believe we are on track to realizing the strategic and financial benefits we expected from the acquisition.”
Additional Highlights
- Earlier this month Power Integrations’ board of directors authorized the use of up to $50 million for the repurchase of the company’s common stock.
- The company paid a dividend of $0.05 per share on September 28, 2012. The next dividend of $0.05 per share will be paid on December 31, 2012, to stockholders of record as of November 30.
- Power Integrations received 15 U.S. patents and 28 non-U.S. patents during the quarter and had a total of 511 U.S. patents and 388 non-U.S. patents as of September 30, 2012.
Financial Outlook
The company issued the following forecast for the fourth quarter of 2012:
- Fourth-quarter revenues are expected to be between $71 million and $77 million.
- Gross margins are expected to be similar to third-quarter levels.
- Non-GAAP operating expenses are expected to be between $24.5 million and $25 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 $29.5 million and $30 million.
- The non-GAAP and GAAP effective tax rates are expected to be approximately 13 percent and 18 percent, respectively.
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, Inc., is a Silicon Valley-based supplier of high-performance electronic components used in high-voltage power-conversion systems. The company’s integrated circuits and diodes enable compact, energy-efficient AC-DC power supplies for a vast range of electronic products including mobile devices, TVs, PCs, appliances, smart utility meters and LED lights. CONCEPT IGBT driver systems enhance the efficiency, reliability and cost of high-power applications such as industrial motor drives, solar and wind energy systems, electric vehicles and high-voltage DC transmission. Since its introduction in 1998, Power Integrations’ EcoSmart® energy-efficiency technology has prevented billions of dollars’ worth of energy waste and millions of tons of carbon emissions. Reflecting the environmental benefits of the company’s products, Power Integrations’ stock is included in the NASDAQ® Clean Edge® Green Energy Index, The Cleantech Index®, and the Ardour Global IndexSM. For more information, including design-support tools and resources, please visit www.powerint.com; visit Power Integrations’ Green Room for a comprehensive guide to energy-efficiency standards around the world.
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 718-10, acquisition-related expenses, amortization of acquisition-related intangible assets and the fair-value write-up of acquired inventory, the charge associated with SemiSouth, non-cash interest income, the tax effects of the above items, and the one-time tax charge described above. 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 financial performance and realizing the benefits of the CT-Concept acquisition 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 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, 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 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; unfavorable fluctuations in component costs resulting from changes in commodity prices and/or the exchange rate between the U.S. dollar and the Japanese yen; and the challenges inherent in integrating and forecasting the performance of acquired businesses. 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 Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (SEC) on August 7, 2012. 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 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 OPERATIONS |
| (in thousands, except per-share amounts) |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, 2012 | | June 30, 2012 | | September 30, 2011 | | September 30, 2012 | | September 30, 2011 |
| NET REVENUES | | $ | 78,045 | | | $ | 76,382 | | | $ | 75,063 | | | $ | 226,200 | | | $ | 232,009 | |
| | | | | | | | | | |
| COST OF REVENUES | | | 39,294 | | | | 38,627 | | | | 40,020 | | | | 115,101 | | | | 122,917 | |
| | | | | | | | | | |
| GROSS PROFIT | | | 38,751 | | | | 37,755 | | | | 35,043 | | | | 111,099 | | | | 109,092 | |
| | | | | | | | | | |
| OPERATING EXPENSES: | | | | | | | | | | |
| Research and development | | | 11,428 | | | | 12,066 | | | | 10,345 | | | | 34,134 | | | | 30,563 | |
| Sales and marketing | | | 9,206 | | | | 8,419 | | | | 7,962 | | | | 25,736 | | | | 24,258 | |
| General and administrative | | | 7,912 | | | | 6,687 | | | | 6,145 | | | | 21,203 | | | | 18,761 | |
| Charge related to SemiSouth | | | 25,300 | | | | - | | | | - | | | | 25,300 | | | | - | |
| Amortization of acquisition-related intangible assets | | | 1,123 | | | | 757 | | | | 28 | | | | 1,908 | | | | 84 | |
| Acquisition expenses | | | 29 | | | | 413 | | | | - | | | | 931 | | | | - | |
| Total operating expenses | | | 54,998 | | | | 28,342 | | | | 24,480 | | | | 109,212 | | | | 73,666 | |
| | | | | | | | | | |
| INCOME (LOSS) FROM OPERATIONS | | | (16,247 | ) | | | 9,413 | | | | 10,563 | | | | 1,887 | | | | 35,426 | |
| | | | | | | | | | |
| Charge related to SemiSouth | | | (33,937 | ) | | | - | | | | - | | | | (33,937 | ) | | |
| Non-cash interest income | | | 665 | | | | 623 | | | | - | | | | 1,445 | | | | - | |
| Cost of acquisition-related currency option | | | - | | | | (635 | ) | | | - | | | | (635 | ) | | | - | |
| Other income (expense), net | | | 172 | | | | 207 | | | | 552 | | | | 837 | | | | 1,455 | |
| | | | | | | | | | |
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | | | (49,347 | ) | | | 9,608 | | | | 11,115 | | | | (30,403 | ) | | | 36,881 | |
| | | | | | | | | | |
| PROVISION (BENEFIT) FOR INCOME TAXES | | | (4,941 | ) | | | 16,784 | | | | 3,603 | | | | 13,718 | | | | 8,916 | |
| | | | | | | | | | |
| NET INCOME (LOSS) | | $ | (44,406 | ) | | $ | (7,176 | ) | | $ | 7,512 | | | $ | (44,121 | ) | | $ | 27,965 | |
| | | | | | | | | | |
| EARNINGS (LOSS) PER SHARE: | | | | | | | | | | |
| Basic | | $ | (1.54 | ) | | $ | (0.25 | ) | | $ | 0.26 | | | $ | (1.54 | ) | | $ | 0.97 | |
| Diluted | | $ | (1.54 | ) | | $ | (0.25 | ) | | $ | 0.25 | | | $ | (1.54 | ) | | $ | 0.93 | |
| | | | | | | | | | |
| SHARES USED IN PER-SHARE CALCULATION: | | | | | | | | | | |
| Basic | | | 28,908 | | | | 28,619 | | | | 28,799 | | | | 28,586 | | | | 28,789 | |
| Diluted | | | 28,908 | | | | 28,619 | | | | 29,879 | | | | 28,586 | | | | 30,195 | |
| | | | | | | | | | |
| | | | | | | | | | |
| SUPPLEMENTAL INFORMATION: | | | | | | | | | | |
| | | | | | | | | | |
| Stock-based compensation expenses included in: | | | | | | | | | | |
| Cost of revenues | | $ | 271 | | | $ | 256 | | | $ | 128 | | | $ | 772 | | | $ | 584 | |
| Research and development | | | 1,467 | | | | 1,566 | | | | 564 | | | | 4,154 | | | | 2,354 | |
| Sales and marketing | | | 940 | | | | 746 | | | | 449 | | | | 2,433 | | | | 1,659 | |
| General and administrative | | | 1,169 | | | | 1,074 | | | | 527 | | | | 3,161 | | | | 2,020 | |
| Total stock-based compensation expense | | $ | 3,847 | | | $ | 3,642 | | | $ | 1,668 | | | $ | 10,520 | | | $ | 6,617 | |
| | | | | | | | | | |
| Cost of revenues includes: | | | | | | | | | | |
| Amortization of write-up of acquired inventory | | $ | 1,597 | | | $ | 1,136 | | | $ | 150 | | | $ | 2,813 | | | $ | 360 | |
| Amortization of acquisition-related intangible assets | | $ | 645 | | | $ | 459 | | | $ | 85 | | | $ | 1,189 | | | $ | 255 | |
| | | | | | | | | | |
| Operating expenses include: | | | | | | | | | | |
| Patent-litigation expenses | | $ | 1,885 | | | $ | 1,409 | | | $ | 1,751 | | | $ | 4,590 | | | $ | 4,218 | |
| | | | | | | | | | |
| | | | | | | | | | |
| REVENUE MIX BY END MARKET | | | | | | | | | | |
| Communications | | | 23 | % | | | 24 | % | | | 26 | % | | | 25 | % | | | 29 | % |
| Computer | | | 10 | % | | | 12 | % | | | 12 | % | | | 11 | % | | | 12 | % |
| Consumer | | | 36 | % | | | 36 | % | | | 39 | % | | | 37 | % | | | 37 | % |
| Industrial | | | 31 | % | | | 28 | % | | | 23 | % | | | 27 | % | | | 22 | % |
| POWER INTEGRATIONS, INC. |
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS |
| (in thousands, except per-share amounts) |
| | | | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30, 2012 | | June 30, 2012 | | September 30, 2011 | | September 30, 2012 | | September 30, 2011 |
| RECONCILIATION OF GROSS PROFIT | | | | | | | | | | |
| GAAP gross profit | | $ | 38,751 | | | $ | 37,755 | | | $ | 35,043 | | | $ | 111,099 | | | $ | 109,092 | |
| GAAP gross profit margin | | | 49.7 | % | | | 49.4 | % | | | 46.7 | % | | | 49.1 | % | | | 47.0 | % |
| | | | | | | | | | | |
| Stock-based compensation included in cost of revenues | | | 271 | | | | 256 | | | | 128 | | | | 772 | | | | 584 | |
| Amortization of write-up of acquired inventory | | | 1,597 | | | | 1,136 | | | | 150 | | | | 2,813 | | | | 360 | |
| Amortization of acquisition-related intangible assets | | | 645 | | | | 459 | | | | 85 | | | | 1,189 | | | | 255 | |
| | | | | | | | | | | |
| Non-GAAP gross profit | | $ | 41,264 | | | $ | 39,606 | | | $ | 35,406 | | | $ | 115,873 | | | $ | 110,291 | |
| Non-GAAP gross profit margin | | | 52.9 | % | | | 51.9 | % | | | 47.2 | % | | | 51.2 | % | | | 47.5 | % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| RECONCILIATION OF OPERATING EXPENSES | | | | | | | | | | |
| GAAP operating expenses | | $ | 54,998 | | | $ | 28,342 | | | $ | 24,480 | | | $ | 109,212 | | | $ | 73,666 | |
| | | | | | | | | | | |
| Less: | Stock-based compensation expense included in operating expenses | | | | | | | | | | |
| Research and development | | | 1,467 | | | | 1,566 | | | | 564 | | | | 4,154 | | | | 2,354 | |
| Sales and marketing | | | 940 | | | | 746 | | | | 449 | | | | 2,433 | | | | 1,659 | |
| General and administrative | | | 1,169 | | | | 1,074 | | | | 527 | | | | 3,161 | | | | 2,020 | |
| Total | | | 3,576 | | | | 3,386 | | | | 1,540 | | | | 9,748 | | | | 6,033 | |
| | | | | | | | | | | |
| Acquisition expenses | | | 29 | | | | 413 | | | | - | | | | 931 | | | | - | |
| | | | | | | | | | | |
| Amortization of acquisition-related intangible assets | | | 1,123 | | | | 757 | | | | 28 | | | | 1,908 | | | | 84 | |
| | | | | | | | | | | |
| Charge related to SemiSouth | | | 25,300 | | | | - | | | | - | | | | 25,300 | | | | - | |
| | | | | | | | | | | |
| Non-GAAP operating expenses | | $ | 24,970 | | | $ | 23,786 | | | $ | 22,912 | | | $ | 71,325 | | | $ | 67,549 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| RECONCILIATION OF INCOME FROM OPERATIONS | | | | | | | | | | |
| GAAP income (loss) from operations | | $ | (16,247 | ) | | $ | 9,413 | | | $ | 10,563 | | | $ | 1,887 | | | $ | 35,426 | |
| GAAP operating margin | | | -20.8 | % | | | 12.3 | % | | | 14.1 | % | | | 0.8 | % | | | 15.3 | % |
| | | | | | | | | | | |
| Add: | Total stock-based compensation | | | 3,847 | | | | 3,642 | | | | 1,668 | | | | 10,520 | | | | 6,617 | |
| Amortization of write-up of acquired inventory | | | 1,597 | | | | 1,136 | | | | 150 | | | | 2,813 | | | | 360 | |
| Amortization of acquisition-related intangible assets | | | 1,768 | | | | 1,216 | | | | 113 | | | | 3,097 | | | | 339 | |
| Acquisition expenses | | | 29 | | | | 413 | | | | - | | | | 931 | | | | - | |
| Charge related to SemiSouth | | | 25,300 | | | | - | | | | - | | | | 25,300 | | | | - | |
| | | | | | | | | | | |
| Non-GAAP income from operations | | $ | 16,294 | | | $ | 15,820 | | | $ | 12,494 | | | $ | 44,548 | | | $ | 42,742 | |
| Non-GAAP operating margin | | | 20.9 | % | | | 20.7 | % | | | 16.6 | % | | | 19.7 | % | | | 18.4 | % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| RECONCILIATION OF PROVISION FOR INCOME TAXES | | | | | | | | | | |
| GAAP provision for income taxes | | $ | (4,941 | ) | | $ | 16,784 | | | $ | 3,603 | | | $ | 13,718 | | | $ | 8,916 | |
| GAAP effective tax rate | | | 10.0 | % | | | 174.7 | % | | | 32.4 | % | | | -45.1 | % | | | 24.2 | % |
| | | | | | | | | | | |
| One-time charge associated with tax settlement | | | - | | | | 15,749 | | | | - | | | | 15,749 | | | | - | |
| Tax effect of other adjustments to GAAP results | | | (6,873 | ) | | | (405 | ) | | | 85 | | | | (7,582 | ) | | | (544 | ) |
| | | | | | | | | | | |
| Non-GAAP provision for income taxes | | $ | 1,932 | | | $ | 1,440 | | | $ | 3,518 | | | $ | 5,551 | | | $ | 9,460 | |
| Non-GAAP effective tax rate | | | 11.7 | % | | | 9.0 | % | | | 27.0 | % | | | 12.2 | % | | | 21.4 | % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| RECONCILIATION OF NET INCOME (LOSS) PER SHARE (DILUTED) | | | | | | | | | | |
| GAAP net income (loss) | | $ | (44,406 | ) | | $ | (7,176 | ) | | $ | 7,512 | | | $ | (44,121 | ) | | $ | 27,965 | |
| | | | | | | | | | | |
| Adjustments to GAAP net income (loss) | | | | | | | | | | |
| Stock-based compensation | | | 3,847 | | | | 3,642 | | | | 1,668 | | | | 10,520 | | | | 6,617 | |
| Amortization of write-up of acquired inventory | | | 1,597 | | | | 1,136 | | | | 150 | | | | 2,813 | | | | 360 | |
| Amortization of acquisition-related intangible assets | | | 1,768 | | | | 1,216 | | | | 113 | | | | 3,097 | | | | 339 | |
| Acquisition expenses | | | 29 | | | | 413 | | | | - | | | | 931 | | | | - | |
| Non-cash interest income | | | (665 | ) | | | (623 | ) | | | - | | | | (1,445 | ) | | | - | |
| Cost of acquisition-related currency option | | | - | | | | 635 | | | | - | | | | 635 | | | | - | |
| Charge related to SemiSouth | | | 59,237 | | | | - | | | | - | | | | 59,237 | | | | - | |
| One-time charge associated with tax settlement | | | - | | | | 15,749 | | | | - | | | | 15,749 | | | | - | |
| Tax effect of items excluded from non-GAAP results | | | (6,873 | ) | | | (405 | ) | | | 85 | | | | (7,582 | ) | | | (544 | ) |
| | | | | | | | | | | |
| Non-GAAP net income | | $ | 14,534 | | | $ | 14,587 | | | $ | 9,528 | | | $ | 39,834 | | | $ | 34,737 | |
| | | | | | | | | | | |
| Average shares outstanding for calculation | | | | | | | | | | |
| of non-GAAP income per share (diluted) | | | 29,809 | | | | 29,792 | | | | 29,879 | | | | 29,740 | | | | 30,195 | |
| | | | | | | | | | | |
| Non-GAAP net income per share (diluted) | | $ | 0.49 | | | $ | 0.49 | | | $ | 0.32 | | | $ | 1.34 | | | $ | 1.15 | |
| | | | | | | | | | | |
| GAAP income (loss) per share | | $ | (1.54 | ) | | $ | (0.25 | ) | | $ | 0.25 | | | $ | (1.54 | ) | | $ | 0.93 | |
| POWER INTEGRATIONS, INC. |
| CONSOLIDATED BALANCE SHEETS |
| (in thousands) |
| | | | | | |
| | | | | | |
| | September 30, 2012 | | June 30, 2012 | | December 31, 2011 |
| ASSETS | | | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash and cash equivalents | | $ | 74,747 | | $ | 73,360 | | $ | 139,836 |
| Short-term marketable securities | | | 35,605 | | | 60,068 | | | 40,899 |
| Accounts receivable | | | 11,106 | | | 17,966 | | | 9,396 |
| Inventories | | | 46,928 | | | 48,555 | | | 52,010 |
| Deferred tax assets | | | 892 | | | 893 | | | 892 |
| Prepaid expenses and other current assets | | | 17,659 | | | 7,758 | | | 7,068 |
| Total current assets | | | 186,937 | | | 208,600 | | | 250,101 |
| | | | | | |
| MARKETABLE SECURITIES | | | - | | | - | | | 32,041 |
| PROPERTY AND EQUIPMENT, net | | | 90,355 | | | 91,738 | | | 88,241 |
| INTANGIBLE ASSETS, net | | | 49,580 | | | 51,422 | | | 8,852 |
| GOODWILL | | | 78,278 | | | 77,354 | | | 14,786 |
| DEFERRED TAX ASSETS | | | 7,410 | | | 7,120 | | | 12,387 |
| OTHER ASSETS | | | 4,042 | | | 43,380 | | | 26,511 |
| Total assets | | $ | 416,602 | | $ | 479,614 | | $ | 432,919 |
| | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
| CURRENT LIABILITIES: | | | | | | |
| Accounts payable | | $ | 19,697 | | $ | 21,108 | | $ | 16,532 |
| Accrued payroll and related expenses | | | 6,258 | | | 6,650 | | | 5,911 |
| Taxes payable | | | 1,168 | | | 37,936 | | | - |
| Deferred taxes | | | 1,634 | | | 1,961 | | | - |
| Deferred income on sales to distributors | | | 10,437 | | | 11,270 | | | 7,883 |
| Other accrued liabilities | | | 17,583 | | | 2,514 | | | 2,305 |
| Total current liabilities | | | 56,777 | | | 81,439 | | | 32,631 |
| | | | | | |
| LONG-TERM LIABILITIES | | | | | | |
| Income taxes payable | | | 7,560 | | | 7,364 | | | 34,368 |
| Deferred taxes | | | 3,926 | | | 4,185 | | | - |
| Pension liability | | | 663 | | | 622 | | | - |
| | | | | | |
| Total liabilities | | | 68,926 | | | 93,610 | | | 66,999 |
| | | | | | |
| STOCKHOLDERS' EQUITY: | | | | | | |
| Common stock | | | 29 | | | 29 | | | 28 |
| Additional paid-in capital | | | 188,587 | | | 181,203 | | | 158,646 |
| Accumulated other comprehensive income | | | 287 | | | 145 | | | 50 |
| Retained earnings | | | 158,773 | | | 204,627 | | | 207,196 |
| Total stockholders' equity | | | 347,676 | | | 386,004 | | | 365,920 |
| Total liabilities and stockholders' equity | | $ | 416,602 | | $ | 479,614 | | $ | 432,919 |
| POWER INTEGRATIONS, INC. |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (in thousands) |
| | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | Sept. 30, 2012 | | June 30, 2012 | | Sept. 30, 2011 | | Sept. 30, 2012 | | Sept. 30, 2011 |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | |
| Net income (loss) | | $ | (44,406 | ) | | $ | (7,176 | ) | | $ | 7,512 | | | $ | (44,121 | ) | | $ | 27,965 | |
| Adjustments to reconcile net income (loss) to cash provided by operating activities | | | | | | | | | | |
| Depreciation | | | 3,799 | | | | 3,895 | | | | 3,865 | | | | 11,426 | | | | 11,337 | |
| Amortization of intangible assets | | | 1,843 | | | | 1,290 | | | | 243 | | | | 3,322 | | | | 729 | |
| Charge related to SemiSouth | | | 59,237 | | | | - | | | | - | | | | 59,237 | | | | - | |
| Gain on sale of property and equipment | | | - | | | | - | | | | - | | | | (1 | ) | | | (41 | ) |
| Stock-based compensation expense | | | 3,847 | | | | 3,642 | | | | 1,668 | | | | 10,520 | | | | 6,617 | |
| Amortization of premium on marketable securities | | | 171 | | | | 258 | | | | 396 | | | | 738 | | | | 1,255 | |
| Non-cash interest income | | | (665 | ) | | | (623 | ) | | | - | | | | (1,445 | ) | | | - | |
| Deferred income taxes | | | (745 | ) | | | 5,161 | | | | (47 | ) | | | 4,089 | | | | 779 | |
| Increase (decrease) in accounts receivable allowances | | | 35 | | | | (14 | ) | | | (110 | ) | | | 21 | | | | (74 | ) |
| Excess tax benefit from stock options exercised | | | (86 | ) | | | (276 | ) | | | (32 | ) | | | (560 | ) | | | (729 | ) |
| Tax benefit (deficiency) associated with employee stock plans | | | (118 | ) | | | 749 | | | | 288 | | | | 1,413 | | | | 1,826 | |
| Change in operating assets and liabilities: | | | | | | | | | | |
| Accounts receivable | | | 6,825 | | | | 1,964 | | | | (2,150 | ) | | | 1,489 | | | | (4,542 | ) |
| Inventories | | | 1,626 | | | | 4,958 | | | | 2,269 | | | | 15,745 | | | | 10,184 | |
| Prepaid expenses and other assets | | | (14,169 | ) | | | 1,528 | | | | (225 | ) | | | (11,335 | ) | | | 2,823 | |
| Accounts payable | | | 1,047 | | | | 2,310 | | | | 3,170 | | | | 4,842 | | | | (1,090 | ) |
| Taxes payable and other accrued liabilities | | | (37,039 | ) | | | 8,180 | | | | 3,423 | | | | (28,255 | ) | | | 4,891 | |
| Deferred income on sales to distributors | | | (833 | ) | | | 1,897 | | | | (883 | ) | | | 2,554 | | | | (1,904 | ) |
| Net cash provided by (used in) operating activities | | | (19,631 | ) | | | 27,743 | | | | 19,387 | | | | 29,679 | | | | 60,026 | |
| | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | |
| Purchases of property and equipment | | | (3,427 | ) | | | (1,283 | ) | | | (3,710 | ) | | | (12,181 | ) | | | (16,229 | ) |
| Proceeds from sale of property and equipment | | | - | | | | - | | | | - | | | | 2 | | | | 2,249 | |
| Other assets | | | - | | | | - | | | | (463 | ) | | | - | | | | (1,271 | ) |
| Acquisitions | | | (2,360 | ) | | | (113,360 | ) | | | - | | | | (115,720 | ) | | | (6,914 | ) |
| Increase in financing lease receivables | | | (37 | ) | | | - | | | | (157 | ) | | | (420 | ) | | | (7,978 | ) |
| Collections of financing lease receivables | | | 228 | | | | - | | | | 109 | | | | 527 | | | | 314 | |
| Loan to SemiSouth | | | - | | | | - | | | | - | | | | (18,000 | ) | | | (3,000 | ) |
| Collection of note to SemiSouth | | | - | | | | - | | | | 3,000 | | | | - | | | | 3,000 | |
| Purchases of marketable securities | | | - | | | | - | | | | (19,761 | ) | | | - | | | | (31,269 | ) |
| Proceeds from maturities of marketable securities | | | 24,320 | | | | 6,403 | | | | 8,545 | | | | 36,788 | | | | 15,175 | |
| Net cash provided by (used in) investing activities | | | 18,724 | | | | (108,240 | ) | | | (12,437 | ) | | | (109,004 | ) | | | (45,923 | ) |
| | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | | | |
| Net proceeds from issuance of common stock | | | 3,656 | | | | 7,864 | | | | 3,972 | | | | 17,977 | | | | 18,218 | |
| Repurchase of common stock | | | - | | | | - | | | | (31,435 | ) | | | - | | | | (35,819 | ) |
| Payments of dividends to stockholders | | | (1,448 | ) | | | (1,438 | ) | | | (1,435 | ) | | | (4,301 | ) | | | (4,320 | ) |
| Excess tax benefit from stock options exercised | | | 86 | | | | 276 | | | | 32 | | | | 560 | | | | 729 | |
| Net cash provided by (used in) financing activities | | | 2,294 | | | | 6,702 | | | | (28,866 | ) | | | 14,236 | | | | (21,192 | ) |
| | | | | | | | | | |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | 1,387 | | | | (73,795 | ) | | | (21,916 | ) | | | (65,089 | ) | | | (7,089 | ) |
| | | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | | | 73,360 | | | | 147,155 | | | | 170,494 | | | | 139,836 | | | | 155,667 | |
| | | | | | | | | | |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | | $ | 74,747 | | | $ | 73,360 | | | $ | 148,578 | | | $ | 74,747 | | | $ | 148,578 | |
CONTACT:
Power Integrations, Inc.
Joe Shiffler, 408-414-8528
jshiffler@powerint.com
