Power Integrations Reports First-Quarter Financial Results

POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
 
 
Three Months Ended
March 31, 2024 December 31, 2023 March 31, 2023
NET REVENUES

$

91,688

 

$

89,507

 

$

106,297

 

 
COST OF REVENUES

 

43,908

 

 

43,299

 

 

52,340

 

 
GROSS PROFIT

 

47,780

 

 

46,208

 

 

53,957

 

 
OPERATING EXPENSES:
Research and development

 

23,225

 

 

23,505

 

 

23,981

 

Sales and marketing

 

15,722

 

 

15,472

 

 

15,885

 

General and administrative

 

8,363

 

 

8,282

 

 

8,334

 

Total operating expenses

 

47,310

 

 

47,259

 

 

48,200

 

 
INCOME (LOSS) FROM OPERATIONS

 

470

 

 

(1,051

)

 

5,757

 

 
OTHER INCOME

 

3,502

 

 

3,282

 

 

1,714

 

 
INCOME BEFORE INCOME TAXES

 

3,972

 

 

2,231

 

 

7,471

 

 
PROVISION (BENEFIT) FOR INCOME TAXES

 

18

 

 

(12,040

)

 

596

 

 
NET INCOME

$

3,954

 

$

14,271

 

$

6,875

 

 
EARNINGS PER SHARE:
Basic

$

0.07

 

$

0.25

 

$

0.12

 

Diluted

$

0.07

 

$

0.25

 

$

0.12

 

 
SHARES USED IN PER-SHARE CALCULATION:
Basic

 

56,833

 

 

56,937

 

 

57,105

 

Diluted

 

57,132

 

 

57,272

 

 

57,579

 

 
 
 
SUPPLEMENTAL INFORMATION: Three Months Ended
March 31, 2024 December 31, 2023 March 31, 2023
Stock-based compensation expenses included in:
Cost of revenues

$

346

 

$

499

 

$

301

 

Research and development

 

2,425

 

 

2,947

 

 

2,668

 

Sales and marketing

 

1,604

 

 

1,827

 

 

1,653

 

General and administrative

 

2,039

 

 

2,230

 

 

2,746

 

Total stock-based compensation expense

$

6,414

 

$

7,503

 

$

7,368

 

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

$

482

 

$

482

 

$

482

 

 
 
Three Months Ended
REVENUE MIX BY END MARKET March 31, 2024 December 31, 2023 March 31, 2023
Communications

 

11

%

 

27

%

 

28

%

Computer

 

11

%

 

9

%

 

14

%

Consumer

 

41

%

 

29

%

 

24

%

Industrial

 

37

%

 

35

%

 

34

%

 
POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)
 
Three Months Ended
March 31, 2024 December 31, 2023 March 31, 2023
RECONCILIATION OF GROSS PROFIT
GAAP gross profit

$

47,780

 

$

46,208

 

$

53,957

 

GAAP gross margin

 

52.1

%

 

51.6

%

 

50.8

%

 
Stock-based compensation included in cost of revenues

 

346

 

 

499

 

 

301

 

Amortization of acquisition-related intangible assets

 

482

 

 

482

 

 

482

 

 
Non-GAAP gross profit

$

48,608

 

$

47,189

 

$

54,740

 

Non-GAAP gross margin

 

53.0

%

 

52.7

%

 

51.5

%

 
 
Three Months Ended
RECONCILIATION OF OPERATING EXPENSES March 31, 2024 December 31, 2023 March 31, 2023
GAAP operating expenses

$

47,310

 

$

47,259

 

$

48,200

 

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

 

2,425

 

 

2,947

 

 

2,668

 

Sales and marketing

 

1,604

 

 

1,827

 

 

1,653

 

General and administrative

 

2,039

 

 

2,230

 

 

2,746

 

Total

 

6,068

 

 

7,004

 

 

7,067

 

 
Non-GAAP operating expenses

$

41,242

 

$

40,255

 

$

41,133

 

 
 
Three Months Ended
RECONCILIATION OF INCOME FROM OPERATIONS March 31, 2024 December 31, 2023 March 31, 2023
GAAP income (loss) from operations

$

470

 

$

(1,051

)

$

5,757

 

GAAP operating margin

 

0.5

%

 

-1.2

%

 

5.4

%

 
Add: Stock-based compensation

 

6,414

 

 

7,503

 

 

7,368

 

Amortization of acquisition-related intangible assets

 

482

 

 

482

 

 

482

 

 
Non-GAAP income from operations

$

7,366

 

$

6,934

 

$

13,607

 

Non-GAAP operating margin

 

8.0

%

 

7.7

%

 

12.8

%

 
 
Three Months Ended
RECONCILIATION OF PROVISION FOR INCOME TAXES March 31, 2024 December 31, 2023 March 31, 2023
GAAP provision (benefit) for income taxes

$

18

 

$

(12,040

)

$

596

 

GAAP effective tax rate

 

0.5

%

 

-539.7

%

 

8.0

%

 
Tax effect of adjustments to GAAP results

 

(358

)

 

(9,556

)

 

(501

)

 
Non-GAAP provision (benefit) for income taxes

$

376

 

$

(2,484

)

$

1,097

 

Non-GAAP effective tax rate

 

3.5

%

 

-24.3

%

 

7.2

%

 
 
Three Months Ended
RECONCILIATION OF NET INCOME PER SHARE (DILUTED) March 31, 2024 December 31, 2023 March 31, 2023
GAAP net income

$

3,954

 

$

14,271

 

$

6,875

 

 
Adjustments to GAAP net income
Stock-based compensation

 

6,414

 

 

7,503

 

 

7,368

 

Amortization of acquisition-related intangible assets

 

482

 

 

482

 

 

482

 

Tax effect of items excluded from non-GAAP results

 

(358

)

 

(9,556

)

 

(501

)

 
Non-GAAP net income

$

10,492

 

$

12,700

 

$

14,224

 

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

 

57,132

 

 

57,272

 

 

57,579

 

 
Non-GAAP net income per share (diluted)

$

0.18

 

$

0.22

 

$

0.25

 

 
GAAP net income per share (diluted)

$

0.07

 

$

0.25

 

$

0.12

 

 
POWER INTEGRATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
March 31, 2024 December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents

$

56,443

 

$

63,929

 

Short-term marketable securities

 

243,163

 

 

247,640

 

Accounts receivable, net

 

12,279

 

 

14,674

 

Inventories

 

167,865

 

 

163,164

 

Prepaid expenses and other current assets

 

22,714

 

 

22,193

 

Total current assets

 

502,464

 

 

511,600

 

 
PROPERTY AND EQUIPMENT, net

 

159,945

 

 

164,213

 

INTANGIBLE ASSETS, net

 

3,881

 

 

4,424

 

GOODWILL

 

91,849

 

 

91,849

 

DEFERRED TAX ASSETS

 

29,654

 

 

28,325

 

OTHER ASSETS

 

17,983

 

 

19,457

 

Total assets

$

805,776

 

$

819,868

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable

$

27,361

 

$

26,390

 

Accrued payroll and related expenses

 

11,822

 

 

13,551

 

Taxes payable

 

878

 

 

1,016

 

Other accrued liabilities

 

9,474

 

 

7,910

 

Total current liabilities

 

49,535

 

 

48,867

 

 
LONG-TERM LIABILITIES:
Income taxes payable

 

6,193

 

 

6,244

 

Other liabilities

 

11,870

 

 

12,516

 

Total liabilities

 

67,598

 

 

67,627

 

 
STOCKHOLDERS' EQUITY:
Common stock

 

22

 

 

23

 

Additional paid-in capital

 

-

 

 

-

 

Accumulated other comprehensive loss

 

(2,559

)

 

(1,462

)

Retained earnings

 

740,715

 

 

753,680

 

Total stockholders' equity

 

738,178

 

 

752,241

 

Total liabilities and stockholders' equity

$

805,776

 

$

819,868

 

 
POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Three Months Ended
March 31, 2024 December 31, 2023 March 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income

$

3,954

 

$

14,271

 

$

6,875

 

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

 

8,715

 

 

8,887

 

 

8,961

 

Amortization of intangible assets

 

543

 

 

543

 

 

543

 

Loss on disposal of property and equipment

 

8

 

 

14

 

 

7

 

Stock-based compensation expense

 

6,414

 

 

7,503

 

 

7,368

 

Amortization of premium (accretion of discount) on marketable securities

 

(496

)

 

(497

)

 

404

 

Deferred income taxes

 

(1,330

)

 

705

 

 

(738

)

Increase (decrease) in accounts receivable allowance for credit losses

 

163

 

 

-

 

 

(454

)

Change in operating assets and liabilities:
Accounts receivable

 

2,232

 

 

13,865

 

 

705

 

Inventories

 

(4,701

)

 

(12,918

)

 

(7,024

)

Prepaid expenses and other assets

 

846

 

 

(346

)

 

(2,302

)

Accounts payable

 

1,294

 

 

(2,553

)

 

2,926

 

Taxes payable and other accrued liabilities

 

(1,737

)

 

(13,207

)

 

(686

)

Net cash provided by operating activities

 

15,905

 

 

16,267

 

 

16,585

 

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment

 

(4,343

)

 

(6,143

)

 

(4,082

)

Purchases of marketable securities

 

(49,912

)

 

(18,196

)

 

(36,922

)

Proceeds from sales and maturities of marketable securities

 

54,198

 

 

36,045

 

 

22,693

 

Net cash provided by (used in) investing activities

 

(57

)

 

11,706

 

 

(18,311

)

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

 

2,691

 

 

-

 

 

3,098

 

Repurchase of common stock

 

(14,641

)

 

(47,444

)

 

(1,687

)

Payments of dividends to stockholders

 

(11,384

)

 

(11,343

)

 

(10,868

)

Net cash used in financing activities

 

(23,334

)

 

(58,787

)

 

(9,457

)

 
NET DECREASE IN CASH AND CASH EQUIVALENTS

 

(7,486

)

 

(30,814

)

 

(11,183

)

 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

63,929

 

 

94,743

 

 

105,372

 

 
CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

56,443

 

$

63,929

 

$

94,189

 





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