Power Integrations Reports Selected Results for First Quarter of 2007

May 16, 2007 by Jeff Shepard

Power Integrations announced selected financial results for the quarter ended March 31, 2007. All numbers reported for this period should be considered preliminary and subject to change, as the company has yet to complete its customary closing and review procedures. Power Integrations expects to release final results for the first quarter of 2007, as well as audited financial results for 2006, in two to three weeks. The company currently anticipates filing all of its outstanding quarterly and annual SEC filings by the end of June.

Preliminary net revenues for the first quarter of 2007 were $45.3 million, an increase of 29% from the year-ago quarter and an improvement of 10% from the fourth quarter of 2006. First-quarter gross margin on a GAAP basis is expected to be between 54% and 55%, including an impact of about one margin point from stock-based compensation.

First-quarter operating expenses are expected to total between $18.0 million and $19.0 million, including $2.5 million to $3.0 million of stock-based compensation expenses. Operating expenses are also expected to include approximately $0.6 million in expenses related to patent litigation, and $2.0 million to $2.5 million in expenses related to the company’s recently completed restatement and ongoing efforts to complete its outstanding SEC filings. Cash and investments totaled approximately $138 million as of March 31, 2007, an increase of about $5 million during the quarter.

"Our first-quarter results reflect the design-win momentum we have built over the past several quarters," said Balu Balakrishnan, President and CEO of Power Integrations. "We are achieving significant penetration gains thanks to our expanded sales force, the ongoing replacement of linear power supplies, the increasing focus on energy-efficiency, and a variety of other growth drivers. Our first-quarter revenue growth was broad-based and diverse. All of our major end markets showed strong sequential and year-over-year growth. We are also very pleased with the continued improvement in our gross margin, which reflects the level of value that customers see in our highly integrated products, our ongoing cost-reduction efforts, and our success in penetrating smaller, higher-margin customers."

Preliminary revenue mix for the first quarter was 32% consumer, 29% communications, 19% computer, 14% industrial and 6% other. By product family, preliminary revenue mix for the first quarter was 60% TinySwitch®, 29% TOPSwitch®, 10% LinkSwitch and 1% DPA-Switch®.