Revenues increased two percent sequentially to
$125.5 million; GAAP earnings were $0.34 per diluted share;
non-GAAP earnings were $0.46 per diluted share
Quarterly dividend rises by five percent to
$0.20 per share
Power Integrations (NASDAQ: POWI) today announced financial
results for the quarter ended September 30, 2023. Net revenues for
the third quarter were $125.5 million, up two percent compared to
the prior quarter and down 22 percent from the third quarter of
2022. Net income for the third quarter was $19.8 million or $0.34
per diluted share compared to $0.26 per diluted share in the prior
quarter and $0.80 per diluted share in the third quarter of 2022.
Cash flow from operations for the third quarter was $26.7
million.
In addition to its GAAP results, the company provided non-GAAP
measures that for the third quarter of 2023 exclude stock-based
compensation, amortization of acquisition-related intangible assets
and the related tax effects. Non-GAAP net income for the third
quarter of 2023 was $26.6 million or $0.46 per diluted share
compared to $0.36 per diluted share in the prior quarter and $0.84
per diluted share in the third quarter of 2022. A reconciliation of
GAAP to non-GAAP financial results is included with the tables
accompanying this press release.
Commented Balu Balakrishnan, chairman and CEO of Power
Integrations: “Our results and forecast reflect the broad-based
demand weakness and elevated supply-chain inventories cited by many
of our peers this quarter. Notwithstanding the uncertain short-term
outlook, our products are winning in the market, design activity
remains healthy, and we are making excellent progress on growth
initiatives such as EVs, efficient drivers for brushless DC motors,
and our proprietary GaN technology.
“We took the next step on our GaN roadmap last month with the
introduction of InnoSwitch™ ICs incorporating a 1250-volt PowiGaN™
switch. This breakthrough not only extends the efficiency benefits
of GaN to a wider range of applications but also demonstrates that
GaN will be a more cost-effective alternative to silicon carbide in
the years ahead.”
Power Integrations paid a dividend of $0.19 per share on
September 29, 2023, and will pay a dividend of $0.20 per share on
December 29, 2023, to stockholders of record as of November 30,
2023. During the third quarter the company repurchased
approximately 24,000 shares of its common stock for $1.8 million.
The company had $73.4 million remaining on its repurchase
authorization as of September 30, 2023.
Financial Outlook
The company issued the following forecast for the fourth quarter
of 2023:
- Revenues are expected to be $90 million plus or minus $5
million.
- Gross margins are expected to be similar to the third-quarter
levels.
- GAAP operating expenses are expected to be approximately $50
million; non-GAAP operating expenses are expected to be
approximately $42.5 million. Non-GAAP expenses are expected to
exclude about $7.5 million of stock-based compensation.
Conference Call Today at 1:30 p.m. Pacific Time
Power Integrations management will hold a conference call today
at 1:30 p.m. Pacific time. Members of the investment community can
register for the call by visiting the following link:
https://conferencingportals.com/event/YTVcHvJE. A live webcast of
the call will also be available on the investor section of the
company's website, http://investors.power.com.
About Power Integrations
Power Integrations, Inc. is a leading innovator in semiconductor
technologies for high-voltage power conversion. The company’s
products are key building blocks in the clean-power ecosystem,
enabling the generation of renewable energy as well as the
efficient transmission and consumption of power in applications
ranging from milliwatts to megawatts. For more information, please
visit www.power.com.
Note Regarding Use of Non-GAAP Financial Measures
In addition to the company's consolidated financial statements,
which are presented according to GAAP, the company provides certain
non-GAAP financial information that excludes stock-based
compensation expenses recorded under ASC 718-10, amortization of
acquisition-related intangible assets, net other operating expenses
of $1.1 million in the second quarter of 2022 stemming from a
patent-litigation settlement and an offsetting recovery from the
liquidation of SemiSouth Laboratories, and the tax effects of these
items. The company uses these measures in its financial and
operational decision-making and, with respect to one measure, in
setting performance targets for compensation purposes. The company
believes that these non-GAAP measures offer important analytical
tools to help investors understand its operating results, and to
facilitate comparability with the results of companies that provide
similar measures. Non-GAAP measures have limitations as analytical
tools and are not meant to be considered in isolation or as a
substitute for GAAP financial information. For example, stock-based
compensation is an important component of the company’s
compensation mix and will continue to result in significant
expenses in the company’s GAAP results for the foreseeable future
but is not reflected in the non-GAAP measures. Also, other
companies, including companies in Power Integrations’ industry, may
calculate non-GAAP measures differently, limiting their usefulness
as comparative measures. Reconciliations of non-GAAP measures to
GAAP measures are attached to this press release.
Note Regarding Forward-Looking Statements
The above statements regarding the company’s forecast for its
fourth-quarter financial performance and that GaN will be a more
cost-effective alternative to silicon carbide are forward-looking
statements reflecting management's current expectations and
beliefs. These statements are based on current information that is,
by its nature, subject to rapid and even abrupt change. Due to
risks and uncertainties associated with the company's business,
actual results could differ materially from those projected or
implied by these statements. These risks and uncertainties include,
but are not limited to: the company’s ability to supply products
and its ability to conduct other aspects of its business such as
competing for new design wins; changes in global economic and
geopolitical conditions, including such factors as inflation, armed
conflicts and trade negotiations, which may impact the level of
demand for the company’s products; potential changes and shifts in
customer demand away from end products that utilize the company's
integrated circuits to end products that do not incorporate the
company's products; the effects of competition, which may cause the
company’s revenues to decrease or cause the company to decrease its
selling prices for its products; unforeseen costs and expenses; and
unfavorable fluctuations in component costs or operating expenses
resulting from changes in commodity prices and/or exchange rates.
In addition, new product introductions and design wins are subject
to the risks and uncertainties that typically accompany development
and delivery of complex technologies to the marketplace, including
product development delays and defects and market acceptance of the
new products. These and other risk factors that may cause actual
results to differ are more fully explained under the caption “Risk
Factors” in the company's most recent Annual Report on Form 10-K,
filed with the Securities and Exchange Commission on February 7,
2023. The company is under no obligation (and expressly disclaims
any obligation) to update or alter its forward-looking statements,
whether because of new information, future events or otherwise,
except as otherwise required by law.
Power Integrations, InnoSwitch, PowiGaN and the Power
Integrations logo are trademarks or registered trademarks of Power
Integrations, Inc. All other trademarks are property of their
respective owners.
POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF
INCOME (in thousands, except per-share amounts)
Three Months Ended Nine Months Ended
September 30,2023 June 30,2023 September
30,2022 September 30,2023 September
30,2022 NET REVENUES
$
125,511
$
123,223
$
160,233
$
355,031
$
526,368
COST OF REVENUES
59,566
60,377
68,198
172,283
226,815
GROSS PROFIT
65,945
62,846
92,035
182,748
299,553
OPERATING EXPENSES: Research and development
24,064
24,517
23,205
72,562
70,390
Sales and marketing
16,224
17,017
14,700
49,126
46,840
General and administrative
7,945
8,671
5,759
24,950
21,432
Amortization of acquisition-related intangible assets
-
-
-
-
241
Other operating expenses, net
-
-
-
-
1,130
Total operating expenses
48,233
50,205
43,664
146,638
140,033
INCOME FROM OPERATIONS
17,712
12,641
48,371
36,110
159,520
OTHER INCOME
3,138
2,714
1,001
7,566
2,229
INCOME BEFORE INCOME TAXES
20,850
15,355
49,372
43,676
161,749
PROVISION FOR INCOME TAXES
1,054
562
3,408
2,212
13,713
NET INCOME
$
19,796
$
14,793
$
45,964
$
41,464
$
148,036
EARNINGS PER SHARE: Basic
$
0.34
$
0.26
$
0.80
$
0.72
$
2.55
Diluted
$
0.34
$
0.26
$
0.80
$
0.72
$
2.52
SHARES USED IN PER-SHARE CALCULATION: Basic
57,383
57,355
57,172
57,282
58,039
Diluted
57,741
57,669
57,603
57,711
58,635
SUPPLEMENTAL INFORMATION:
Three Months Ended Nine Months Ended September
30,2023 June 30,2023 September 30,2022
September 30,2023 September 30,2022
Stock-based compensation expenses included in: Cost of
revenues
$
446
$
446
$
172
$
1,193
$
727
Research and development
2,895
2,429
2,334
7,992
7,712
Sales and marketing
1,787
1,621
1,267
5,061
4,392
General and administrative
1,777
2,256
(755
)
6,779
2,879
Total stock-based compensation expense
$
6,905
$
6,752
$
3,018
$
21,025
$
15,710
Cost of revenues includes: Amortization of
acquisition-related intangible assets
$
482
$
482
$
482
$
1,446
$
1,446
Three Months Ended Nine
Months Ended REVENUE MIX BY END MARKET
September 30,2023
June 30,2023 September 30,2022 September
30,2023 September 30,2022 Communications
32
%
28
%
16
%
30
%
20
%
Computer
10
%
14
%
11
%
12
%
10
%
Consumer
26
%
29
%
32
%
26
%
35
%
Industrial
32
%
29
%
41
%
32
%
35
%
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 30,2023 June
30,2023 September 30,2022 September 30,2023
September 30,2022 RECONCILIATION OF GROSS
PROFIT GAAP gross profit
$
65,945
$
62,846
$
92,035
$
182,748
$
299,553
GAAP gross margin
52.5
%
51.0
%
57.4
%
51.5
%
56.9
%
Stock-based compensation included in cost of revenues
446
446
172
1,193
727
Amortization of acquisition-related intangible assets
482
482
482
1,446
1,446
Non-GAAP gross profit
$
66,873
$
63,774
$
92,689
$
185,387
$
301,726
Non-GAAP gross margin
53.3
%
51.8
%
57.8
%
52.2
%
57.3
%
Three Months Ended Nine
Months Ended RECONCILIATION OF OPERATING EXPENSES
September 30,2023 June 30,2023 September
30,2022 September 30,2023 September
30,2022 GAAP operating expenses
$
48,233
$
50,205
$
43,664
$
146,638
$
140,033
Less:Stock-based compensation expense included in
operating expenses Research and development
2,895
2,429
2,334
7,992
7,712
Sales and marketing
1,787
1,621
1,267
5,061
4,392
General and administrative
1,777
2,256
(755
)
6,779
2,879
Total
6,459
6,306
2,846
19,832
14,983
Amortization of acquisition-related intangible assets
-
-
-
-
241
Other operating expenses, net
-
-
-
-
1,130
Non-GAAP operating expenses
$
41,774
$
43,899
$
40,818
$
126,806
$
123,679
Three Months Ended Nine
Months Ended RECONCILIATION OF INCOME FROM OPERATIONS
September 30,2023 June 30,2023 September
30,2022 September 30,2023 September
30,2022 GAAP income from operations
$
17,712
$
12,641
$
48,371
$
36,110
$
159,520
GAAP operating margin
14.1
%
10.3
%
30.2
%
10.2
%
30.3
%
Add:Total stock-based compensation
6,905
6,752
3,018
21,025
15,710
Amortization of acquisition-related intangible assets
482
482
482
1,446
1,687
Other operating expenses, net
-
-
-
-
1,130
Non-GAAP income from operations
$
25,099
$
19,875
$
51,871
$
58,581
$
178,047
Non-GAAP operating margin
20.0
%
16.1
%
32.4
%
16.5
%
33.8
%
Three Months Ended Nine
Months Ended RECONCILIATION OF PROVISION FOR INCOME
TAXES September 30,2023 June 30,2023 September
30,2022 September 30,2023 September
30,2022 GAAP provision for income taxes
$
1,054
$
562
$
3,408
$
2,212
$
13,713
GAAP effective tax rate
5.1
%
3.7
%
6.9
%
5.1
%
8.5
%
Tax effect of adjustments to GAAP results
(580
)
(1,016
)
(1,116
)
(2,097
)
(2,497
)
Non-GAAP provision for income taxes
$
1,634
$
1,578
$
4,524
$
4,309
$
16,210
Non-GAAP effective tax rate
5.8
%
7.0
%
8.6
%
6.5
%
9.0
%
Three Months Ended Nine
Months Ended RECONCILIATION OF NET INCOME PER SHARE
(DILUTED) September 30,2023 June 30,2023
September 30,2022 September 30,2023
September 30,2022 GAAP net income
$
19,796
$
14,793
$
45,964
$
41,464
$
148,036
Adjustments to GAAP net income Stock-based
compensation
6,905
6,752
3,018
21,025
15,710
Amortization of acquisition-related intangible assets
482
482
482
1,446
1,687
Other operating expenses, net
-
-
-
-
1,130
Tax effect of items excluded from non-GAAP results
(580
)
(1,016
)
(1,116
)
(2,097
)
(2,497
)
Non-GAAP net income
$
26,603
$
21,011
$
48,348
$
61,838
$
164,066
Average shares outstanding for calculation of
non-GAAP net income per share (diluted)
57,741
57,669
57,603
57,711
58,635
Non-GAAP net income per share (diluted)
$
0.46
$
0.36
$
0.84
$
1.07
$
2.80
GAAP net income per share (diluted)
$
0.34
$
0.26
$
0.80
$
0.72
$
2.52
POWER INTEGRATIONS, INC. CONSOLIDATED BALANCE SHEETS
(in thousands) September 30, 2023 June 30,
2023 December 31, 2022 ASSETS CURRENT ASSETS:
Cash and cash equivalents
$
94,743
$
84,096
$
105,372
Short-term marketable securities
261,896
262,219
248,441
Accounts receivable, net
28,539
32,077
20,836
Inventories
150,246
149,741
135,420
Prepaid expenses and other current assets
20,692
22,854
15,004
Total current assets
556,116
550,987
525,073
PROPERTY AND EQUIPMENT, net
166,391
168,066
176,681
INTANGIBLE ASSETS, net
4,967
5,511
6,597
GOODWILL
91,849
91,849
91,849
DEFERRED TAX ASSETS
28,943
21,771
19,034
OTHER ASSETS
17,224
21,273
20,862
Total assets
$
865,490
$
859,457
$
840,096
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT
LIABILITIES: Accounts payable
$
28,553
$
40,531
$
30,088
Accrued payroll and related expenses
13,778
14,041
14,778
Taxes payable
774
704
938
Other accrued liabilities
10,316
9,543
12,572
Total current liabilities
53,421
64,819
58,376
LONG-TERM LIABILITIES: Income taxes payable
16,724
16,009
15,757
Other liabilities
10,288
10,700
10,747
Total liabilities
80,433
91,528
84,880
STOCKHOLDERS' EQUITY: Common stock
23
23
24
Additional paid-in capital
19,429
11,220
-
Accumulated other comprehensive loss
(5,730
)
(5,757
)
(7,344
)
Retained earnings
771,335
762,443
762,536
Total stockholders' equity
785,057
767,929
755,216
Total liabilities and stockholders' equity
$
865,490
$
859,457
$
840,096
POWER INTEGRATIONS, INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS (in thousands) Three Months Ended Nine
Months Ended September 30,2023 June 30,2023
September 30,2022 September 30,2023
September 30,2022 CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
19,796
$
14,793
$
45,964
$
41,464
$
148,036
Adjustments to reconcile net income to cash provided by operating
activities Depreciation
8,663
8,692
8,881
26,316
26,055
Amortization of intangible assets
544
543
543
1,630
1,871
Loss on disposal of property and equipment
64
15
128
86
1,162
Stock-based compensation expense
6,905
6,752
3,018
21,025
15,710
Amortization of premium on marketable securities
(273
)
15
771
146
2,638
Deferred income taxes
(7,170
)
(2,044
)
(4,108
)
(9,952
)
(7,390
)
Increase (decrease) in accounts receivable allowance for credit
losses
-
-
431
(454
)
690
Change in operating assets and liabilities: Accounts
receivable
3,538
(11,492
)
11,474
(7,249
)
24,628
Inventories
(505
)
(7,297
)
(8,834
)
(14,826
)
(20,826
)
Prepaid expenses and other assets
6,404
(4,939
)
4,353
(837
)
8,428
Accounts payable
(11,695
)
5,887
(11,451
)
(2,882
)
(5,874
)
Taxes payable and other accrued liabilities
455
(4,744
)
(1,344
)
(4,975
)
(3,883
)
Net cash provided by operating activities
26,726
6,181
49,826
49,492
191,245
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(7,530
)
(3,129
)
(5,500
)
(14,741
)
(33,444
)
Proceeds from sale of property and equipment
-
-
-
-
1,202
Purchases of marketable securities
(62,205
)
(73,888
)
(6,534
)
(173,015
)
(27,244
)
Proceeds from sales and maturities of marketable securities
63,256
75,948
35,487
161,897
161,014
Net cash provided by (used in) investing activities
(6,479
)
(1,069
)
23,453
(25,859
)
101,528
CASH FLOWS FROM FINANCING ACTIVITIES: Net
proceeds from issuance of common stock
3,139
-
3,105
6,237
6,162
Repurchase of common stock
(1,835
)
(4,312
)
-
(7,834
)
(292,349
)
Payments of dividends to stockholders
(10,904
)
(10,893
)
(10,293
)
(32,665
)
(31,229
)
Net cash used in financing activities
(9,600
)
(15,205
)
(7,188
)
(34,262
)
(317,416
)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
10,647
(10,093
)
66,091
(10,629
)
(24,643
)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
84,096
94,189
67,383
105,372
158,117
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
94,743
$
84,096
$
133,474
$
94,743
$
133,474
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107480518/en/
Joe Shiffler Power Integrations, Inc. (408) 414-8528
joe@power.com
Power Integrations (NASDAQ:POWI)
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