Power Integrations Acquires Potentia Semiconductor; Releases Financial Results
Power Integrations announced that it has acquired Potentia Semiconductor, a developer of controller chips for high-power ac-dc power supplies. Power Integrations paid approximately $5.5 million in cash for Potentia, including closing costs. Potentia’s engineering team, based in Ottawa, Canada, will form the core of a new analog design group for Power Integrations focused primarily on high-power applications.
"Potentia is an excellent addition to our team," said Balu Balakrishnan, President and CEO of Power Integrations. "Like Power Integrations, Potentia is focused on developing innovative power-conversion ICs and system designs that reduce the size, complexity and energy usage of power supplies. Their design capabilities and intellectual property will accelerate our efforts to address high-power applications and significantly expand our addressable market."
Power Integrations also announced financial results for the quarter and fiscal year ended December 31, 2007. The company’s net revenues for the fourth quarter were $52.7 million, up 6% compared to $49.8 million in the prior quarter, and a 28% increase compared to $41.3 million in the fourth quarter of 2006. For the full year, net revenues totaled $191.0 million, an increase of 18% compared to $162.4 million in 2006.
Fourth-quarter gross margin under generally accepted accounting principles (GAAP) was 53.2%. Net income was $6.6 million, or $0.20 per diluted share, compared to $6.8 million or $0.22 per diluted share in the prior quarter and $3.0 million or $0.10 per diluted share in the year-ago quarter. Full-year gross margin on a GAAP basis was 54.2%. GAAP net income totaled $26.6 million, or $0.85 per diluted share, compared to $9.4 million or $0.31 per diluted share in the prior year. Fourth-quarter and full-year net income reflect the impact of a $1.4 million charge for in-process research and development associated with the company’s acquisition of Potentia Semiconductor.
"2007 was an excellent year for Power Integrations, with 18% revenue growth, over half a billion units shipped, and more than $60 million in cash flow from operations," said Balakrishnan. "The year ended on an especially high note with 28% year-over-year revenue growth in the fourth quarter. This growth was broad-based, with revenues from each of our major end markets growing more than 20%.
"The adoption of our EcoSmart® ICs continues to accelerate, driven by energy-efficiency standards and elevated raw material costs. In particular, copper-and-iron ’energy vampires’ are heading toward extinction, and our LinkSwitch products are replacing them at a rapid rate. LinkSwitch revenues grew more than 150% in 2007 and accounted for 28% of total revenues in the fourth quarter.
"The importance of energy efficiency in power supplies continues to grow. The California standards on external power supplies are now set to take effect nationwide in July as a result of the new U.S. energy legislation. Tighter specifications from ENERGY STAR® and the European Union are also scheduled to take effect this year. Our EcoSmart technology meets these and all other current and proposed standards worldwide in a highly cost-effective fashion."
