Power Integrations Reports Record Quarterly Revenues and Net Income

Power Integrations announced financial results for the quarter and year ended December 31, 2009. Net revenues for the fourth quarter of 2009 were $66.1 million, up 10% sequentially and an increase of 56% compared with the fourth quarter of 2008. Gross margin for the fourth quarter was 51.1%.

Net income for the quarter was a record $9.18 million, or $0.32 per diluted share, compared with net income of $9.15 million, or $0.32 per diluted share in the prior quarter and a net loss of $20.7 million, or $0.72 per share, in the fourth quarter of 2008. The company’s results for the fourth quarter of 2008 included $19.3 million of non-cash stock-based compensation expenses arising from the repurchase of employee stock options, as well as a non-cash charge of $2.0 million for the impairment of intangible assets.

In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation expenses, the asset-impairment charge recognized in the fourth quarter of 2008, and the related tax effects. Non-GAAP net income for the fourth quarter of 2009 was $12.2 million or $0.42 per diluted share, compared with $10.4 million, or $0.36 per diluted share in the prior quarter and $4.6 million or $0.15 per diluted share in the fourth quarter of 2008. Non-GAAP gross margin for the fourth quarter was 51.4%.

Commented Balu Balakrishnan, President and CEO of Power Integrations: "We completed an outstanding year with another strong quarter, delivering ten-percent sequential revenue growth, a significant increase in our gross margin, and record net income. Despite the challenging economic environment, our annual revenues grew seven%, marking our eighth consecutive year of top-line growth. Electronics manufacturers are demanding ever-higher levels of energy efficiency and reliability from their power supplies, and Power Integrations is succeeding in the market as a leading enabler of that trend."

Balakrishnan added, "We are excited about the opportunities that lie ahead in 2010 and beyond. Energy efficiency will be a major factor in the power-supply industry for years to come as the drive toward greener products continues. The need to conserve energy is also driving the adoption of LEDs for general lighting, creating a fast-growing, emerging market for our products. And we have a strong pipeline of new products, including ICs that will offer an unprecedented level of integration for high-power applications that have historically used only discrete solutions."

Added Bill Roeschlein, Power Integrations’ Chief Financial Officer: "We ended 2009 on a high note, and 2010 is off to a good start with a strong starting backlog and record monthly bookings in January. We expect first-quarter revenues to be between $70 million and $74 million, an increase of between 74% and 84% compared with the first quarter of 2009. We expect our first-quarter gross margin to be similar to the fourth quarter of 2009. Patent-litigation expenses were higher than expected in the fourth quarter, reflecting the unpredictable nature of expenses during the discovery phase of a lawsuit. However, litigation expenses should decrease significantly in the first quarter now that discovery is essentially complete. We expect total operating expenses in the first quarter to be between $21 million and $21.5 million, including $2.5 million of non-cash stock-based compensation expenses and about $1 million of patent-litigation expenses."

Full-year 2009 revenues were $215.7 million, an increase of seven% compared with $201.7 million in 2008. Net income for the year was $23.3 million, or $0.82 per diluted shared, compared with $1.8 million or $0.06 per diluted share in 2008. Non-GAAP net income for the year was $33.3 million or $1.18 per diluted share, compared with $36.9 million or $1.16 per diluted share in 2008. Cash flow from operations totaled $46.2 million for the year, compared with $36.2 million in 2008.