Power Integrations announced financial results for the quarter ended September 30, 2011. Net revenues for the third quarter were $75.1 million, down six percent from the prior quarter and down one percent compared with the third quarter of 2010. Net income was $7.5 million or $0.25 per diluted share, compared with $0.35 per diluted share in the prior quarter and $0.43 per diluted share in the third quarter of 2010. Gross margin for the third quarter was 46.7 percent; operating margin was 14.1 percent.
In addition to its GAAP results, the company provided certain non-GAAP financial measures that exclude stock-based compensation expenses, amortization of acquisition-related intangible assets and the fair-value write-up of acquired inventory, and the tax effects of these items. Non-GAAP net income for the quarter was $9.5 million or $0.32 per diluted share, compared with $0.43 per diluted share in the prior quarter and $0.53 per diluted share in the third quarter of 2010. Non-GAAP gross margin for the third quarter was 47.2 percent; non-GAAP operating margin was 16.6 percent.
Balu Balakrishnan, President and CEO of Power Integrations, commented, "Like much of the semiconductor industry, we are experiencing a downturn in demand driven by macroeconomic factors. Third-quarter revenues were down six percent from the prior quarter, but within the range of our guidance. Order rates remain relatively subdued, and we expect sales to decline further in the fourth quarter."
Balakrishnan continued: "While the current business environment is challenging, we believe our long-term growth drivers are intact. Manufacturers continue to specify more efficient power supplies in response to both regulatory and market forces. Our LED-lighting and high-power businesses continue to ramp. Meanwhile, we have made good progress on cost reductions to help offset the margin impact of higher input costs, and we expect our gross margin to increase in the fourth quarter as a result. We also expect our operating expenses to decrease in the fourth quarter as we have implemented expense-saving measures in response to the weaker business environment."
Additional Highlights
– Cash flow from operations was $19.4 million for the quarter and totaled $60.0 million for the nine months ended September 30.
– Power Integrations repurchased approximately 1.0 million shares of its common stock during the third quarter for $31.4 million. As of September 30 the company had used $35.8 million of its $50 million repurchase authorization, repurchasing a total of 1.1 million shares. The company’s board of directors has authorized the use of an additional $30 million for share repurchases on top of the $14.2 million that remained at quarter-end.
– The company paid a dividend of $0.05 per share on September 30, 2011. The next dividend of $0.05 per share will be paid on December 30, 2011 to stockholders of record as of November 30.
– Power Integrations was issued 18 U.S. patents and 26 non-U.S. patents during the quarter and had a total of 440 U.S. patents and 293 non-U.S. patents as of September 30.
