Power Integrations Reports Fourth-Quarter and Full-Year Financial Results

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POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
   
   
Three Months Ended   Twelve Months Ended
December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
NET REVENUES

$ 172,654

$ 176,776

$ 150,693

 

$ 703,277

$ 488,318

   
COST OF REVENUES

79,478

85,037

76,688

 

342,638

244,728

   
GROSS PROFIT

93,176

91,739

74,005

 

360,639

243,590

   
OPERATING EXPENSES:  
Research and development

22,028

21,137

21,921

 

84,933

81,711

Sales and marketing

15,590

15,443

14,113

 

60,037

53,578

General and administrative

11,073

9,386

10,028

 

39,840

36,895

Amortization of acquisition-related intangible assets

181

181

216

 

771

919

Total operating expenses

48,872

46,147

46,278

 

185,581

173,103

   
INCOME FROM OPERATIONS

44,304

45,592

27,727

 

175,058

70,487

   
OTHER INCOME

101

206

630

 

1,077

4,764

   
INCOME BEFORE INCOME TAXES

44,405

45,798

28,357

 

176,135

75,251

   
PROVISION FOR INCOME TAXES

3,705

3,764

1,079

 

11,722

4,075

   
NET INCOME

$ 40,700

$ 42,034

$ 27,278

 

$ 164,413

$ 71,176

   
EARNINGS PER SHARE:  
Basic

$ 0.68

$ 0.70

$ 0.46

 

$ 2.73

$ 1.19

Diluted

$ 0.66

$ 0.69

$ 0.45

 

$ 2.67

$ 1.17

   
SHARES USED IN PER-SHARE CALCULATION:  
Basic

60,259

60,319

59,879

 

60,327

59,657

Diluted

61,381

61,363

61,176

 

61,467

60,845

   
   
   
SUPPLEMENTAL INFORMATION: Three Months Ended   Twelve Months Ended
December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
Stock-based compensation expenses included in:  
Cost of revenues

$ 424

$ 664

$ 713

 

$ 2,359

$ 1,963

Research and development

3,522

3,055

2,942

 

12,127

10,378

Sales and marketing

2,090

2,201

1,740

 

7,630

6,290

General and administrative

4,248

3,725

3,468

 

15,493

12,281

Total stock-based compensation expense

$ 10,284

$ 9,645

$ 8,863

 

$ 37,609

$ 30,912

   
Cost of revenues includes:  
Amortization of acquisition-related intangible assets

$ 552

$ 552

$ 799

 

$ 2,477

$ 3,196

   
   
Three Months Ended   Twelve Months Ended
REVENUE MIX BY END MARKET December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
Communications

23%

25%

34%

 

30%

30%

Computer

10%

11%

9%

 

10%

7%

Consumer

35%

34%

31%

 

32%

33%

Industrial

32%

30%

26%

 

28%

30%

   
 
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, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
RECONCILIATION OF GROSS PROFIT  
GAAP gross profit

$ 93,176

 

$ 91,739

 

$ 74,005

 

 

$ 360,639

 

$ 243,590

 

GAAP gross margin

54.0

%

51.9

%

49.1

%

 

51.3

%

49.9

%

   
Stock-based compensation included in cost of revenues

424

 

664

 

713

 

 

2,359

 

1,963

 

Amortization of acquisition-related intangible assets

552

 

552

 

799

 

 

2,477

 

3,196

 

   
Non-GAAP gross profit

$ 94,152

 

$ 92,955

 

$ 75,517

 

 

$ 365,475

 

$ 248,749

 

Non-GAAP gross margin

54.5

%

52.6

%

50.1

%

 

52.0

%

50.9

%

   
   
Three Months Ended   Twelve Months Ended
RECONCILIATION OF OPERATING EXPENSES December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
GAAP operating expenses

$ 48,872

 

$ 46,147

 

$ 46,278

 

 

$ 185,581

 

$ 173,103

 

   
Less: Stock-based compensation expense included in operating expenses  
Research and development

3,522

 

3,055

 

2,942

 

 

12,127

 

10,378

 

Sales and marketing

2,090

 

2,201

 

1,740

 

 

7,630

 

6,290

 

General and administrative

4,248

 

3,725

 

3,468

 

 

15,493

 

12,281

 

Total

9,860

 

8,981

 

8,150

 

 

35,250

 

28,949

 

   
Amortization of acquisition-related intangible assets

181

 

181

 

216

 

 

771

 

919

 

   
Non-GAAP operating expenses

$ 38,831

 

$ 36,985

 

$ 37,912

 

 

$ 149,560

 

$ 143,235

 

   
   
Three Months Ended   Twelve Months Ended
RECONCILIATION OF INCOME FROM OPERATIONS December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
GAAP income from operations

$ 44,304

 

$ 45,592

 

$ 27,727

 

 

$ 175,058

 

$ 70,487

 

GAAP operating margin

25.7

%

25.8

%

18.4

%

 

24.9

%

14.4

%

   
Add: Total stock-based compensation

10,284

 

9,645

 

8,863

 

 

37,609

 

30,912

 

Amortization of acquisition-related intangible assets

733

 

733

 

1,015

 

 

3,248

 

4,115

 

   
Non-GAAP income from operations

$ 55,321

 

$ 55,970

 

$ 37,605

 

 

$ 215,915

 

$ 105,514

 

Non-GAAP operating margin

32.0

%

31.7

%

25.0

%

 

30.7

%

21.6

%

   
   
Three Months Ended   Twelve Months Ended
RECONCILIATION OF PROVISION FOR INCOME TAXES December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
GAAP provision for income taxes

$ 3,705

 

$ 3,764

 

$ 1,079

 

 

$ 11,722

 

$ 4,075

 

GAAP effective tax rate

8.3

%

8.2

%

3.8

%

 

6.7

%

5.4

%

   
Tax effect of adjustments to GAAP results

(800

)

(565

)

(725

)

 

(5,044

)

(2,719

)

   
Non-GAAP provision for income taxes

$ 4,505

 

$ 4,329

 

$ 1,804

 

 

$ 16,766

 

$ 6,794

 

Non-GAAP effective tax rate

8.1

%

7.7

%

4.7

%

 

7.7

%

6.2

%

   
   
Three Months Ended   Twelve Months Ended
RECONCILIATION OF NET INCOME PER SHARE (DILUTED) December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
GAAP net income

$ 40,700

 

$ 42,034

 

$ 27,278

 

 

$ 164,413

 

$ 71,176

 

   
Adjustments to GAAP net income  
Stock-based compensation

10,284

 

9,645

 

8,863

 

 

37,609

 

30,912

 

Amortization of acquisition-related intangible assets

733

 

733

 

1,015

 

 

3,248

 

4,115

 

Tax effect of items excluded from non-GAAP results

(800

)

(565

)

(725

)

 

(5,044

)

(2,719

)

   
Non-GAAP net income

$ 50,917

 

$ 51,847

 

$ 36,431

 

 

$ 200,226

 

$ 103,484

 

   
Average shares outstanding for calculation  
of non-GAAP net income per share (diluted)

61,381

 

61,363

 

61,176

 

 

61,467

 

60,845

 

   
Non-GAAP net income per share (diluted)

$ 0.83

 

$ 0.84

 

$ 0.60

 

 

$ 3.26

 

$ 1.70

 

   
GAAP net income per share (diluted)

$ 0.66

 

$ 0.69

 

$ 0.45

 

 

$ 2.67

 

$ 1.17

 

   
POWER INTEGRATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
December 31, 2021 September 30, 2021 December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents

$ 158,117

 

$ 262,435

 

$ 258,874

 

Short-term marketable securities

372,235

 

286,506

 

190,318

 

Accounts receivable, net

41,393

 

38,872

 

35,910

 

Inventories

99,266

 

91,814

 

102,878

 

Prepaid expenses and other current assets

15,804

 

23,720

 

13,252

 

Total current assets

686,815

 

703,347

 

601,232

 

 
PROPERTY AND EQUIPMENT, net

179,824

 

168,498

 

166,188

 

INTANGIBLE ASSETS, net

9,012

 

9,807

 

12,506

 

GOODWILL

91,849

 

91,849

 

91,849

 

DEFERRED TAX ASSETS

16,433

 

3,266

 

3,339

 

OTHER ASSETS

30,554

 

28,223

 

28,225

 

Total assets

$ 1,014,487

 

$ 1,004,990

 

$ 903,339

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable

$ 43,721

 

$ 40,390

 

$ 34,712

 

Accrued payroll and related expenses

15,492

 

14,064

 

14,806

 

Taxes payable

1,210

 

970

 

902

 

Other accrued liabilities

11,898

 

10,638

 

12,106

 

Total current liabilities

72,321

 

66,062

 

62,526

 

 
LONG-TERM LIABILITIES:
Income taxes payable

15,280

 

14,644

 

15,588

 

Other liabilities

14,854

 

15,928

 

14,814

 

Total liabilities

102,455

 

96,634

 

92,928

 

 
STOCKHOLDERS' EQUITY:
Common stock

28

 

28

 

28

 

Additional paid-in capital

162,301

 

189,790

 

190,920

 

Accumulated other comprehensive loss

(3,737

)

(3,249

)

(2,163

)

Retained earnings

753,440

 

721,787

 

621,626

 

Total stockholders' equity

912,032

 

908,356

 

810,411

 

Total liabilities and stockholders' equity

$ 1,014,487

 

$ 1,004,990

 

$ 903,339

 

 
POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
   
Three Months Ended   Twelve Months Ended
December 31, 2021 September 30, 2021 December 31, 2020   December 31, 2021 December 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income

$ 40,700

 

$ 42,034

 

$ 27,278

 

 

$ 164,413

 

$ 71,176

 

Adjustments to reconcile net income to cash provided by operating activities  
Depreciation

8,054

 

8,126

 

6,672

 

 

31,454

 

23,743

 

Amortization of intangible assets

795

 

794

 

1,076

 

 

3,494

 

4,359

 

Loss on disposal of property and equipment

905

 

2,162

 

214

 

 

3,105

 

525

 

Stock-based compensation expense

10,284

 

9,645

 

8,863

 

 

37,609

 

30,912

 

Amortization of premium on marketable securities

815

 

475

 

180

 

 

1,590

 

705

 

Deferred income taxes

(13,228

)

(1,194

)

(692

)

 

(13,240

)

(592

)

Increase (decrease) in accounts receivable allowance for credit losses

1

 

(74

)

(491

)

 

18

 

(336

)

Change in operating assets and liabilities:  
Accounts receivable

(2,522

)

2,554

 

(5,972

)

 

(5,501

)

(11,300

)

Inventories

(7,452

)

(2,171

)

1,927

 

 

3,612

 

(12,498

)

Prepaid expenses and other assets

9,299

 

(472

)

3,020

 

 

4,326

 

9,153

 

Accounts payable

(2,566

)

(1,420

)

(668

)

 

4,067

 

5,697

 

Taxes payable and other accrued liabilities

2,078

 

(1,724

)

4,959

 

 

(4,079

)

4,095

 

Net cash provided by operating activities

47,163

 

58,735

 

46,366

 

 

230,868

 

125,639

 

   
CASH FLOWS FROM INVESTING ACTIVITIES:  
Purchases of property and equipment

(16,967

)

(11,011

)

(34,860

)

 

(47,272

)

(70,598

)

Proceeds from sale of property and equipment

-

 

-

 

320

 

 

35

 

651

 

Purchases of marketable securities

(172,115

)

(193,150

)

(43,637

)

 

(554,018

)

(109,703

)

Proceeds from sales and maturities of marketable securities

84,421

 

123,953

 

64,390

 

 

368,457

 

151,385

 

Net cash used in investing activities

(104,661

)

(80,208

)

(13,787

)

 

(232,798

)

(28,265

)

   
CASH FLOWS FROM FINANCING ACTIVITIES:  
Net proceeds from issuance of common stock

-

 

4,058

 

865

 

 

7,710

 

10,527

 

Repurchase of common stock

(37,773

)

(9,791

)

-

 

 

(73,938

)

(2,636

)

Payments of dividends to stockholders

(9,047

)

(7,840

)

(6,584

)

 

(32,599

)

(25,081

)

Net cash used in financing activities

(46,820

)

(13,573

)

(5,719

)

 

(98,827

)

(17,190

)

   
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(104,318

)

(35,046

)

26,860

 

 

(100,757

)

80,184

 

   
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

262,435

 

297,481

 

232,014

 

 

258,874

 

178,690

 

   
CASH AND CASH EQUIVALENTS AT END OF PERIOD

$ 158,117

 

$ 262,435

 

$ 258,874

 

 

$ 158,117

 

$ 258,874

 





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