Power Integrations Quarterly Sales Top $80 Million for First Time
Power Integrations announced financial results for the quarter ended June 30, 2011. Net revenues for the second quarter were $80.2 million, up four% from the prior quarter and up slightly compared with the second quarter of 2010. Net income was $10.6 million or $0.35 per diluted share, compared with $0.33 per diluted share in the prior quarter and $0.53 per diluted share in the second quarter of 2010. Gross margin for the second quarter was 46.9%; operating margin was 16.4%.
In addition to its GAAP results, the company provided certain non-GAAP financial measures that exclude stock-based compensation expenses, amortization of the fair-value write-up of acquired inventory and acquisition-related intangible assets, and the tax effects of these items. Non-GAAP net income for the quarter was $13.1 million or $0.43 per diluted share, compared with $0.40 per diluted share in the prior quarter and $0.60 per diluted share in the second quarter of 2010. Non-GAAP gross margin for the second quarter was 47.5%; non-GAAP operating margin was 19.8%.
Commented Balu Balakrishnan, President and CEO of Power Integrations: "We surpassed $80 million in quarterly sales for the first time in our history, thanks in part to strong growth in LED lighting applications and the continued ramp of our new high-power products. We reduced inventories by nearly 15% during the quarter and generated $35 million of cash flow from operations."
Balakrishnan continued: "We have also achieved significant cost reductions to help offset rising input costs – particularly higher wafer costs due to the decline of the dollar versus the Japanese yen, as well as higher commodity prices – which have impacted our profitability in recent quarters. We expect our gross margin to increase meaningfully in the fourth quarter as lower-cost inventory begins to flow through our results."
Balakrishnan concluded: "While design activity remains healthy and our growth initiatives are on track, we have not yet seen evidence of a typical seasonal upturn in demand. Meanwhile, several of our largest end customers in the mobile-phone market have recently announced lower-than-expected sales. Based on these factors, we expect our third-quarter revenues to be between $74 million and $80 million. However, we are well positioned to respond to increased demand should it materialize."