| 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, 2014 |
June 30, 2014 |
September 30, 2013 |
September 30, 2014 |
September 30, 2013 |
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| RECONCILIATION OF GROSS PROFIT | ||||||||||||||||||||||||||
| GAAP gross profit | $ | 49,052 | $ | 48,736 | $ | 48,774 | $ | 143,765 | $ | 134,845 | ||||||||||||||||
| GAAP gross profit margin | 54.4 | % | 54.8 | % | 53.2 | % | 54.8 | % | 52.5 | % | ||||||||||||||||
| Stock-based compensation included in cost of revenues | 131 | 298 | 296 | 648 | 824 | |||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 645 | 645 | 645 | 1,935 | 1,935 | |||||||||||||||||||||
| Non-GAAP gross profit | $ | 49,828 | $ | 49,679 | $ | 49,715 | $ | 146,348 | $ | 137,604 | ||||||||||||||||
| Non-GAAP gross profit margin | 55.3 | % | 55.8 | % | 54.2 | % | 55.8 | % | 53.6 | % | ||||||||||||||||
| RECONCILIATION OF OPERATING EXPENSES | ||||||||||||||||||||||||||
| GAAP operating expenses | $ | 32,177 | $ | 34,411 | $ | 32,180 | $ | 99,834 | $ | 95,886 | ||||||||||||||||
|
Less: Stock-based compensation expense included in operating expenses |
||||||||||||||||||||||||||
| Research and development | 971 | 1,339 | 1,485 | 3,522 | 4,231 | |||||||||||||||||||||
| Sales and marketing | 779 | 864 | 964 | 2,578 | 2,588 | |||||||||||||||||||||
| General and administrative | 699 | 1,674 | 1,446 | 3,922 | 4,512 | |||||||||||||||||||||
| Total | 2,449 | 3,877 | 3,895 | 10,022 | 11,331 | |||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 629 | 798 | 1,121 | 2,562 | 3,365 | |||||||||||||||||||||
| Non-GAAP operating expenses | $ | 29,099 | $ | 29,736 | $ | 27,164 | $ | 87,250 | $ | 81,190 | ||||||||||||||||
| RECONCILIATION OF INCOME FROM OPERATIONS | ||||||||||||||||||||||||||
| GAAP income from operations | $ | 16,875 | $ | 14,325 | $ | 16,594 | $ | 43,931 | $ | 38,959 | ||||||||||||||||
| GAAP operating margin | 18.7 | % | 16.1 | % | 18.1 | % | 16.8 | % | 15.2 | % | ||||||||||||||||
|
Add: Total stock-based compensation |
2,580 | 4,175 | 4,191 | 10,670 | 12,155 | |||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,274 | 1,443 | 1,766 | 4,497 | 5,300 | |||||||||||||||||||||
| Non-GAAP income from operations | $ | 20,729 | $ | 19,943 | $ | 22,551 | $ | 59,098 | $ | 56,414 | ||||||||||||||||
| Non-GAAP operating margin | 23.0 | % | 22.4 | % | 24.6 | % | 22.5 | % | 22.0 | % | ||||||||||||||||
| RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES | ||||||||||||||||||||||||||
| GAAP provision (benefit) for income taxes | $ | 1,145 | $ | (2,193 | ) | $ | 22 | $ | (423 | ) | $ | (1,406 | ) | |||||||||||||
| GAAP effective tax rate | 6.6 | % | -15.1 | % | 0.1 | % | -0.9 | % | -3.5 | % | ||||||||||||||||
| Benefit associated with tax settlement | - | (3,331 | ) | - | (3,331 | ) | - | |||||||||||||||||||
| Tax effect of other adjustments to GAAP results | (120 | ) | (115 | ) | (776 | ) | (783 | ) | (3,873 | ) | ||||||||||||||||
| Non-GAAP provision for income taxes | $ | 1,265 | $ | 1,253 | $ | 798 | $ | 3,691 | $ | 2,467 | ||||||||||||||||
| Non-GAAP effective tax rate | 6.0 | % | 6.2 | % | 3.5 | % | 6.2 | % | 4.3 | % | ||||||||||||||||
| RECONCILIATION OF NET INCOME PER SHARE (DILUTED) | ||||||||||||||||||||||||||
| GAAP net income | $ | 16,111 | $ | 16,716 | $ | 16,654 | $ | 45,190 | $ | 41,229 | ||||||||||||||||
| Adjustments to GAAP net income | ||||||||||||||||||||||||||
| Stock-based compensation | 2,580 | 4,175 | 4,191 | 10,670 | 12,155 | |||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,274 | 1,443 | 1,766 | 4,497 | 5,300 | |||||||||||||||||||||
| Gain on sale of assets held for sale | - | - | - | - | (497 | ) | ||||||||||||||||||||
| Benefit associated with tax settlement | - | (3,331 | ) | - | (3,331 | ) | - | |||||||||||||||||||
| Tax effect of items excluded from non-GAAP results | (120 | ) | (115 | ) | (776 | ) | (783 | ) | (3,873 | ) | ||||||||||||||||
| Non-GAAP net income | $ | 19,845 | $ | 18,888 | $ | 21,835 | $ | 56,243 | $ | 54,314 | ||||||||||||||||
| Average shares outstanding for calculation | ||||||||||||||||||||||||||
| of non-GAAP income per share (diluted) | 30,757 | 31,110 | 30,652 | 31,053 | 30,237 | |||||||||||||||||||||
| Non-GAAP net income per share (diluted) | $ | 0.65 | $ | 0.61 | $ | 0.71 | $ | 1.81 | $ | 1.80 | ||||||||||||||||
| GAAP income per share | $ | 0.52 | $ | 0.54 | $ | 0.54 | $ | 1.46 | $ | 1.36 | ||||||||||||||||
Power Integrations Reports Third-Quarter Financial Results
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