Power Integrations Announces Third-Quarter Financial Results
Power Integrations announced financial results for the quarter ended September 30, 2008. The company’s net revenues for the quarter were $53.8 million, up 8% compared with $49.8 million in the third quarter of 2007, and up slightly compared with $53.6 million in the second quarter of 2008.
Third-quarter gross margin under generally accepted accounting principles (GAAP) was 54.2%, compared with 53.0% in the third quarter of 2007 and 53.7% in the second quarter of 2008. GAAP net income was $7.6 million, or $0.23 per diluted share, compared with $6.8 million or $0.22 per diluted share in the year-ago quarter, and flat compared with the second quarter of 2008.
On a non-GAAP basis, third-quarter gross margin was 54.9%, compared with 53.7% in the third quarter of 2007 and 54.6% in the second quarter of 2008. Non-GAAP net income was $11.0 million, or $0.34 per diluted share, compared with non-GAAP net income of $10.1 million or $0.32 per share in the year-ago quarter and $10.7 million or $0.33 per share in the second quarter of 2008. Non-GAAP financial measures exclude stock-based compensation expenses and the related tax effects.
Cash flow from operations totaled $6.6 million for the quarter. The company ended the quarter with $225.3 million in cash and investments, a decrease of $12.2 million during the quarter. The company repurchased 788,400 shares during the quarter for a total of $20.2 million. Including purchases made through October 22, the company has repurchased a total of 1.9 million shares for approximately $45 million since initiating a $50 million repurchase program in February 2008.
"The slowdown that began for us in May persisted through the third quarter, and the seasonal ramp that we typically expect did not materialize," said Balu Balakrishnan, President and CEO of Power Integrations. "Consequently, revenues grew only slightly on a sequential basis in the third quarter. Orders have slowed further in October, and as a result we expect a significant decline in revenues in the fourth quarter. In the face of a very challenging macro environment, we’re staying focused on the factors that we can affect – winning designs, developing new products, controlling costs and expenses, and prudently deploying our cash. Design activity has continued unabated, and we had a record quarter in terms of design wins. Tightening energy-efficiency specifications and rising labor costs are working in our favor, and we continue to invest in emerging opportunities such as high-power products and LED lighting."
"Meanwhile, our gross margin expanded in the third quarter, and we reduced operating expenses significantly compared to the second quarter," added Balakrishnan. "We’ve also put our strong balance sheet to work with a substantial share repurchase and the initiation of a quarterly dividend."