| 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, 2017 | June 30, 2017 | September 30, 2016 | September 30, 2017 | September 30, 2016 | ||||||||||||||||
| RECONCILIATION OF GROSS PROFIT | ||||||||||||||||||||
| GAAP gross profit | $ | 55,713 | $ | 53,447 | $ | 49,842 | $ | 159,636 | $ | 142,115 | ||||||||||
| GAAP gross margin | 50.1 | % | 49.7 | % | 49.0 | % | 49.3 | % | 49.5 | % | ||||||||||
| Stock-based compensation included in cost of revenues | 391 | 351 | 348 | 885 | 731 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 939 | 939 | 939 | 2,817 | 2,846 | |||||||||||||||
| Non-GAAP gross profit | $ | 57,043 | $ | 54,737 | $ | 51,129 | $ | 163,338 | $ | 145,692 | ||||||||||
| Non-GAAP gross margin | 51.3 | % | 50.9 | % | 50.3 | % | 50.5 | % | 50.7 | % | ||||||||||
| RECONCILIATION OF OPERATING EXPENSES | ||||||||||||||||||||
| GAAP operating expenses | $ | 39,654 | $ | 39,250 | $ | 36,724 | $ | 116,464 | $ | 106,769 | ||||||||||
|
Less: Stock-based compensation expense included in operating expenses |
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| Research and development | 2,173 | 2,351 | 1,934 | 6,158 | 5,343 | |||||||||||||||
| Sales and marketing | 1,441 | 1,189 | 1,303 | 3,727 | 3,229 | |||||||||||||||
| General and administrative | 2,521 | 2,436 | 2,204 | 7,052 | 5,914 | |||||||||||||||
| Total | 6,135 | 5,976 | 5,441 | 16,937 | 14,486 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 514 | 537 | 582 | 1,634 | 1,859 | |||||||||||||||
| Non-GAAP operating expenses | $ | 33,005 | $ | 32,737 | $ | 30,701 | $ | 97,893 | $ | 90,424 | ||||||||||
| RECONCILIATION OF INCOME FROM OPERATIONS | ||||||||||||||||||||
| GAAP income from operations | $ | 16,059 | $ | 14,197 | $ | 13,118 | $ | 43,172 | $ | 35,346 | ||||||||||
| GAAP operating margin | 14.4 | % | 13.2 | % | 12.9 | % | 13.3 | % | 12.3 | % | ||||||||||
|
Add: Total stock-based compensation |
6,526 | 6,327 | 5,789 | 17,822 | 15,217 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 1,453 | 1,476 | 1,521 | 4,451 | 4,705 | |||||||||||||||
| Non-GAAP income from operations | $ | 24,038 | $ | 22,000 | $ | 20,428 | $ | 65,445 | $ | 55,268 | ||||||||||
| Non-GAAP operating margin | 21.6 | % | 20.5 | % | 20.1 | % | 20.2 | % | 19.2 | % | ||||||||||
| RECONCILIATION OF PROVISION FOR INCOME TAXES | ||||||||||||||||||||
| GAAP provision for income taxes | $ | 448 | $ | 760 | $ | 591 | $ | 531 | $ | 1,530 | ||||||||||
| GAAP effective tax rate | 2.6 | % | 5.2 | % | 4.4 | % | 1.2 | % | 4.2 | % | ||||||||||
| Tax effect of adjustments to GAAP results | (751 | ) | (736 | ) | (328 | ) | (3,020 | ) | (854 | ) | ||||||||||
| Non-GAAP provision for income taxes | $ | 1,199 | $ | 1,496 | $ | 919 | $ | 3,551 | $ | 2,384 | ||||||||||
| Non-GAAP effective tax rate | 4.8 | % | 6.6 | % | 4.4 | % | 5.3 | % | 4.2 | % | ||||||||||
| RECONCILIATION OF NET INCOME PER SHARE (DILUTED) | ||||||||||||||||||||
| GAAP net income | $ | 16,506 | $ | 13,902 | $ | 12,809 | $ | 44,507 | $ | 34,595 | ||||||||||
| Adjustments to GAAP net income | ||||||||||||||||||||
| Stock-based compensation | 6,526 | 6,327 | 5,789 | 17,822 | 15,217 | |||||||||||||||
| Amortization of acquisition-related intangible assets | 1,453 | 1,476 | 1,521 | 4,451 | 4,705 | |||||||||||||||
| Amortization of in-place lease intangible assets | - | 90 | 90 | 180 | 270 | |||||||||||||||
| Tax effect of items excluded from non-GAAP results | (751 | ) | (736 | ) | (328 | ) | (3,020 | ) | (854 | ) | ||||||||||
| Non-GAAP net income | $ | 23,734 | $ | 21,059 | $ | 19,881 | $ | 63,940 | $ | 53,933 | ||||||||||
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Average shares outstanding for calculation of non-GAAP income per share (diluted) |
30,614 | 30,454 | 29,625 | 30,472 | 29,480 | |||||||||||||||
| Non-GAAP net income per share (diluted) | $ | 0.78 | $ | 0.69 | $ | 0.67 | $ | 2.10 | $ | 1.83 | ||||||||||
| GAAP income per share | $ | 0.54 | $ | 0.46 | $ | 0.43 | $ | 1.46 | $ | 1.17 | ||||||||||
Power Integrations Reports Third-Quarter Financial Results
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