Power Integrations to Incur Q3 Charge Due to SemiSouth Closure
Power Integrations announced that its financial results for the quarter ended September 30, 2012 will include a pre-tax charge of approximately $60 million, resulting in a net loss on a GAAP basis. The charge stems from the expected closure of SemiSouth Laboratories, a Mississippi-based developer of silicon-carbide power devices. Although no closing date has been announced, the company is expected to lay off its 90 employees. The reason for the shutdown is unclear; an anonymous source at SemiSouth stated that the company is not bankrupt. Power Integrations had announced a strategic partnership with SemiSouth in 2010.
Commented Balu Balakrishnan, president and CEO of Power Integrations: "The expected closure of SemiSouth is disappointing, but reflects the challenges and risks inherent in the quest for disruptive technologies. Our strategic direction remains unchanged, and we continue to invest in promising technologies to expand our market opportunity within the realm of high-voltage power conversion."
Jeffrey Casady, SemiSouth's former President and Chief Technology Officer has joined Cree, Inc. as Product Portfolio Planning Manager, according to an industry source.
Power Integrations noted that it expects its third-quarter revenues to be between $77 million and $79 million, compared with its previous forecast of $76 million to $82 million. Non-GAAP gross margin for the quarter is expected to be between 52 percent and 53 percent, compared with the prior forecast of 51 percent to 52 percent. GAAP gross margin is expected to be between 49 percent and 50 percent, compared with the prior forecast of 48 to 49 percent. Operating expenses excluding the above-mentioned charge are expected to be consistent with the company's prior forecast.
No conference call will be held in conjunction with today's announcement. As previously announced, Power Integrations will release its third-quarter results on October 25, 2012 after market hours and will conduct a conference call for members of the investment community at 1:30 p.m. Pacific time on that day.
