| 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, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||||||||||||
| RECONCILIATION OF GROSS PROFIT | |||||||||||||||||||||||||||
| GAAP gross profit | $ | 51,193 | $ | 47,637 | $ | 44,161 | $ | 141,777 | $ | 130,471 | |||||||||||||||||
| GAAP gross margin | 49.3 | % | 49.0 | % | 49.7 | % | 49.5 | % | 50.8 | % | |||||||||||||||||
| Stock-based compensation included in cost of revenues | 348 | 293 | 219 | 731 | 725 | ||||||||||||||||||||||
| Amortization of write-up of acquired inventory | - | - | - | - | 309 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 939 | 946 | 961 | 2,846 | 2,883 | ||||||||||||||||||||||
| Non-GAAP gross profit | $ | 52,480 | $ | 48,876 | $ | 45,341 | $ | 145,354 | $ | 134,388 | |||||||||||||||||
| Non-GAAP gross margin | 50.6 | % | 50.3 | % | 51.0 | % | 50.8 | % | 52.4 | % | |||||||||||||||||
| RECONCILIATION OF OPERATING EXPENSES | |||||||||||||||||||||||||||
| GAAP operating expenses | $ | 36,724 | $ | 36,010 | $ | 32,378 | $ | 106,769 | $ | 102,527 | |||||||||||||||||
|
Less: Stock-based compensation expense included in operating expenses |
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| Research and development | 1,934 | 1,940 | 1,277 | 5,343 | 3,974 | ||||||||||||||||||||||
| Sales and marketing | 1,303 | 899 | 877 | 3,229 | 2,767 | ||||||||||||||||||||||
| General and administrative | 2,204 | 1,880 | 988 | 5,914 | 4,036 | ||||||||||||||||||||||
| Total | 5,441 | 4,719 | 3,142 | 14,486 | 10,777 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 582 | 611 | 666 | 1,859 | 2,109 | ||||||||||||||||||||||
| Acquisition expenses, severance and transition costs | - | - | - | - | 1,113 | ||||||||||||||||||||||
| Non-GAAP operating expenses | $ | 30,701 | $ | 30,680 | $ | 28,570 | $ | 90,424 | $ | 88,528 | |||||||||||||||||
| RECONCILIATION OF INCOME FROM OPERATIONS | |||||||||||||||||||||||||||
| GAAP income from operations | $ | 14,469 | $ | 11,627 | $ | 11,783 | $ | 35,008 | $ | 27,944 | |||||||||||||||||
| GAAP operating margin | 13.9 | % | 12.0 | % | 13.3 | % | 12.2 | % | 10.9 | % | |||||||||||||||||
|
Add: Total stock-based compensation |
5,789 | 5,012 | 3,361 | 15,217 | 11,502 | ||||||||||||||||||||||
| Amortization of write-up of acquired inventory | - | - | - | - | 309 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,521 | 1,557 | 1,627 | 4,705 | 4,992 | ||||||||||||||||||||||
| Acquisition expenses, severance and transition costs | - | - | - | - | 1,113 | ||||||||||||||||||||||
| Non-GAAP income from operations | $ | 21,779 | $ | 18,196 | $ | 16,771 | $ | 54,930 | $ | 45,860 | |||||||||||||||||
| Non-GAAP operating margin | 21.0 | % | 18.7 | % | 18.9 | % | 19.2 | % | 17.9 | % | |||||||||||||||||
| RECONCILIATION OF PROVISION FOR INCOME TAXES | |||||||||||||||||||||||||||
| GAAP provision for income taxes | $ | 586 | $ | 598 | $ | 698 | $ | 1,514 | $ | 1,717 | |||||||||||||||||
| GAAP effective tax rate | 4.0 | % | 5.0 | % | 5.7 | % | 4.2 | % | 6.1 | % | |||||||||||||||||
| Tax effect of adjustments to GAAP results | (328 | ) | (225 | ) | (310 | ) | (854 | ) | (1,028 | ) | |||||||||||||||||
| Non-GAAP provision for income taxes | $ | 914 | $ | 823 | $ | 1,008 | $ | 2,368 | $ | 2,745 | |||||||||||||||||
| Non-GAAP effective tax rate | 4.1 | % | 4.4 | % | 5.9 | % | 4.2 | % | 6.0 | % | |||||||||||||||||
| RECONCILIATION OF NET INCOME PER SHARE (DILUTED) | |||||||||||||||||||||||||||
| GAAP net income | $ | 14,165 | $ | 11,265 | $ | 11,513 | $ | 34,273 | $ | 26,446 | |||||||||||||||||
| Adjustments to GAAP net income | |||||||||||||||||||||||||||
| Stock-based compensation | 5,789 | 5,012 | 3,361 | 15,217 | 11,502 | ||||||||||||||||||||||
| Amortization of write-up of acquired inventory | - | - | - | - | 309 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,521 | 1,557 | 1,627 | 4,705 | 4,992 | ||||||||||||||||||||||
| Acquisition expenses, severance and transition costs | - | - | - | - | 1,113 | ||||||||||||||||||||||
| Amortization of in-place lease intangible assets | 90 | 90 | 30 | 270 | 30 | ||||||||||||||||||||||
| Tax effect of items excluded from non-GAAP results | (328 | ) | (225 | ) | (310 | ) | (854 | ) | (1,028 | ) | |||||||||||||||||
|
Non-GAAP net income |
$ | 21,237 | $ | 17,699 | $ | 16,221 | $ | 53,611 | $ | 43,364 | |||||||||||||||||
|
Average shares outstanding for calculation of non-GAAP income per share (diluted) |
29,625 | 29,422 | 29,298 | 29,480 | 29,856 | ||||||||||||||||||||||
| Non-GAAP net income per share (diluted) | $ | 0.72 | $ | 0.60 | $ | 0.55 | $ | 1.82 | $ | 1.45 | |||||||||||||||||
| GAAP income per share | $ | 0.48 | $ | 0.38 | $ | 0.39 | $ | 1.16 | $ | 0.89 | |||||||||||||||||
Power Integrations Reports Third-Quarter Financial Results
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