| POWER INTEGRATIONS, INC. | ||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS | ||||||||||||||||||||||
| (in thousands, except per-share amounts) | ||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
|
December 31, 2018 |
September 30, 2018 |
December 31, 2017 |
December 31, 2018 |
December 31, 2017 |
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| RECONCILIATION OF GROSS PROFIT | ||||||||||||||||||||||
| GAAP gross profit | $ | 48,005 | $ | 57,005 | $ | 54,028 | $ | 214,788 | $ | 213,664 | ||||||||||||
| GAAP gross margin | 51.4 | % | 51.8 | % | 49.9 | % | 51.6 | % | 49.5 | % | ||||||||||||
| Stock-based compensation included in cost of revenues | 313 | 243 | 436 | 1,097 | 1,321 | |||||||||||||||||
| Amortization of acquisition-related intangible assets | 813 | 814 | 939 | 3,253 | 3,756 | |||||||||||||||||
| Non-GAAP gross profit | $ | 49,131 | $ | 58,062 | $ | 55,403 | $ | 219,138 | $ | 218,741 | ||||||||||||
| Non-GAAP gross margin | 52.7 | % | 52.7 | % | 51.2 | % | 52.7 | % | 50.7 | % | ||||||||||||
| RECONCILIATION OF OPERATING EXPENSES | ||||||||||||||||||||||
| GAAP operating expenses | $ | 39,962 | $ | 38,980 | $ | 39,563 | $ | 159,140 | $ | 156,027 | ||||||||||||
| Less:Stock-based compensation expense included in operating expenses | ||||||||||||||||||||||
| Research and development | 1,944 | 1,634 | 2,338 | 7,688 | 8,496 | |||||||||||||||||
| Sales and marketing | 1,222 | 1,105 | 1,470 | 4,729 | 5,197 | |||||||||||||||||
| General and administrative | 1,963 | 1,416 | 2,611 | 8,066 | 9,663 | |||||||||||||||||
| Total | 5,129 | 4,155 | 6,419 | 20,483 | 23,356 | |||||||||||||||||
| Amortization of acquisition-related intangible assets | 455 | 455 | 513 | 1,899 | 2,147 | |||||||||||||||||
| Non-GAAP operating expenses | $ | 34,378 | $ | 34,370 | $ | 32,631 | $ | 136,758 | $ | 130,524 | ||||||||||||
| RECONCILIATION OF INCOME FROM OPERATIONS | ||||||||||||||||||||||
| GAAP income from operations | $ | 8,043 | $ | 18,025 | $ | 14,465 | $ | 55,648 | $ | 57,637 | ||||||||||||
| GAAP operating margin | 8.6 | % | 16.4 | % | 13.4 | % | 13.4 | % | 13.3 | % | ||||||||||||
| Add:Total stock-based compensation | 5,442 | 4,398 | 6,855 | 21,580 | 24,677 | |||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,268 | 1,269 | 1,452 | 5,152 | 5,903 | |||||||||||||||||
| Non-GAAP income from operations | $ | 14,753 | $ | 23,692 | $ | 22,772 | $ | 82,380 | $ | 88,217 | ||||||||||||
| Non-GAAP operating margin | 15.8 | % | 21.5 | % | 21.0 | % | 19.8 | % | 20.4 | % | ||||||||||||
| RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES | ||||||||||||||||||||||
| GAAP provision (benefit) for income taxes | $ | (13,396 | ) | $ | 1,456 | $ | 32,159 | $ | (10,220 | ) | $ | 32,690 | ||||||||||
| GAAP effective tax rate | -143.4 | % | 7.6 | % | 210.7 | % | -17.1 | % | 54.2 | % | ||||||||||||
| Impact of U.S. tax legislation | (9,687 | ) | - | 37,524 | (9,687 | ) | 37,524 | |||||||||||||||
| Tax effect of adjustments to GAAP results | (3,846 | ) | (167 | ) | (6,267 | ) | (5,361 | ) | (9,287 | ) | ||||||||||||
| Non-GAAP provision (benefit) for income taxes | $ | 137 | $ | 1,623 | $ | 902 | $ | 4,828 | $ | 4,453 | ||||||||||||
| Non-GAAP effective tax rate | 0.9 | % | 6.5 | % | 3.8 | % | 5.6 | % | 4.9 | % | ||||||||||||
| RECONCILIATION OF NET INCOME (LOSS) PER SHARE (DILUTED) | ||||||||||||||||||||||
| GAAP net income (loss) | $ | 22,736 | $ | 17,667 | $ | (16,898 | ) | $ | 69,984 | $ | 27,609 | |||||||||||
| Adjustments to GAAP net income (loss) | ||||||||||||||||||||||
| Stock-based compensation | 5,442 | 4,398 | 6,855 | 21,580 | 24,677 | |||||||||||||||||
| Amortization of acquisition-related intangible assets | 1,268 | 1,269 | 1,452 | 5,152 | 5,903 | |||||||||||||||||
| Amortization of in-place lease intangible assets | - | - | - | - | 180 | |||||||||||||||||
| Impact of U.S. tax legislation | (9,687 | ) | - | 37,524 | (9,687 | ) | 37,524 | |||||||||||||||
| Tax effect of items excluded from non-GAAP results | (3,846 | ) | (167 | ) | (6,267 | ) | (5,361 | ) | (9,287 | ) | ||||||||||||
| Non-GAAP net income | $ | 15,913 | $ | 23,167 | $ | 22,666 | $ | 81,668 | $ | 86,606 | ||||||||||||
|
Average shares outstanding for calculation of non-GAAP net income per share (diluted) |
29,651 | 29,998 | 30,692 | 30,147 | 30,545 | |||||||||||||||||
| Non-GAAP net income per share (diluted) | $ | 0.54 | $ | 0.77 | $ | 0.74 | $ | 2.71 | $ | 2.84 | ||||||||||||
| GAAP net income (loss) per share | $ | 0.77 | $ | 0.59 | $ | (0.57 | ) | $ | 2.32 | $ | 0.90 | |||||||||||
Power Integrations Reports Fourth-Quarter Financial Results
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