Note Regarding Forward-Looking Statements
The statements in this press release regarding the company’s forecast for its fourth-quarter financial performance, the company’s belief that it is on track for double-digit revenue growth in 2016, and that it expects to carry strong momentum into 2017 on the strength of the InnoSwitch™ product cycle, new products for the high-power and lighting markets, and a robust product pipeline that will further expand its addressable market in the years ahead are forward-looking statements reflecting management's current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by these statements. These risks and uncertainties include, but are not limited to: changes in global macroeconomic conditions, which may impact the level of demand for the company’s products; potential changes and shifts in customer demand away from end products that utilize the company's integrated circuits to end products that do not incorporate the company's products; the effects of competition, which may cause the company to decrease its selling prices for its products; the outcome and cost of patent litigation, which may affect sales of the company’s products or could result in higher expenses and charges than currently expected; unforeseen costs and expenses; and unfavorable fluctuations in component costs or operating expenses resulting from changes in commodity prices and/or exchange rates. In addition, new product introductions and design wins are subject to the risks and uncertainties that typically accompany development and delivery of complex technologies to the marketplace, including product development delays and defects and market acceptance of the new products. These and other risk factors that may cause actual results to differ are more fully explained under the caption “Risk Factors” in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on February 11, 2016. The company is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by the rules and regulations of the SEC.
Power Integrations, InnoSwitch and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc. All other trademarks are property of their respective owners.
| POWER INTEGRATIONS, INC. | |||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||||||
| (in thousands, except per-share amounts) | |||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | |||||||||||||||||||||||
| NET REVENUES | $ | 103,790 | $ | 97,169 | $ | 88,878 | $ | 286,285 | $ | 256,700 | |||||||||||||||||
| COST OF REVENUES | 52,597 | 49,532 | 44,717 | 144,508 | 126,229 | ||||||||||||||||||||||
| GROSS PROFIT | 51,193 | 47,637 | 44,161 | 141,777 | 130,471 | ||||||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||||||
| Research and development | 15,906 | 15,859 | 13,888 | 46,544 | 43,144 | ||||||||||||||||||||||
| Sales and marketing | 11,447 | 11,407 | 10,463 | 33,594 | 33,337 | ||||||||||||||||||||||
| General and administrative | 8,789 | 8,133 | 7,361 | 24,772 | 22,824 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 582 | 611 | 666 | 1,859 | 2,109 | ||||||||||||||||||||||
| Acquisition expenses, severance and transition costs | - | - | - | - | 1,113 | ||||||||||||||||||||||
| Total operating expenses | 36,724 | 36,010 | 32,378 | 106,769 | 102,527 | ||||||||||||||||||||||
| INCOME FROM OPERATIONS | 14,469 | 11,627 | 11,783 | 35,008 | 27,944 | ||||||||||||||||||||||
| Other income, net | 282 | 236 | 428 | 779 | 219 | ||||||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 14,751 | 11,863 | 12,211 | 35,787 | 28,163 | ||||||||||||||||||||||
| PROVISION FOR INCOME TAXES | 586 | 598 | 698 | 1,514 | 1,717 | ||||||||||||||||||||||
| NET INCOME | $ | 14,165 | $ | 11,265 | $ | 11,513 | $ | 34,273 | $ | 26,446 | |||||||||||||||||
| EARNINGS PER SHARE: | |||||||||||||||||||||||||||
| Basic | $ | 0.49 | $ | 0.39 | $ | 0.40 | $ | 1.19 | $ | 0.91 | |||||||||||||||||
| Diluted | $ | 0.48 | $ | 0.38 | $ | 0.39 | $ | 1.16 | $ | 0.89 | |||||||||||||||||
| SHARES USED IN PER-SHARE CALCULATION: | |||||||||||||||||||||||||||
| Basic | 28,972 | 28,850 | 28,855 | 28,834 | 29,175 | ||||||||||||||||||||||
| Diluted | 29,625 | 29,422 | 29,298 | 29,480 | 29,856 | ||||||||||||||||||||||
| SUPPLEMENTAL INFORMATION: | |||||||||||||||||||||||||||
| Stock-based compensation expenses included in: | |||||||||||||||||||||||||||
| Cost of revenues | $ | 348 | $ | 293 | $ | 219 | $ | 731 | $ | 725 | |||||||||||||||||
| Research and development | 1,934 | 1,940 | 1,277 | 5,343 | 3,974 | ||||||||||||||||||||||
| Sales and marketing | 1,303 | 899 | 877 | 3,229 | 2,767 | ||||||||||||||||||||||
| General and administrative | 2,204 | 1,880 | 988 | 5,914 | 4,036 | ||||||||||||||||||||||
| Total stock-based compensation expense | $ | 5,789 | $ | 5,012 | $ | 3,361 | $ | 15,217 | $ | 11,502 | |||||||||||||||||
| Cost of revenues includes: | |||||||||||||||||||||||||||
| Amortization of write-up of acquired inventory | $ | - | $ | - | $ | - | $ | - | $ | 309 | |||||||||||||||||
| Amortization of acquisition-related intangible assets | $ | 939 | $ | 946 | $ | 961 | $ | 2,846 | $ | 2,883 | |||||||||||||||||
| General & administrative expenses include: | |||||||||||||||||||||||||||
| Patent-litigation expenses | $ | 1,894 | $ | 1,658 | $ | 1,500 | $ | 4,711 | $ | 4,458 | |||||||||||||||||
| Other income, net includes: | |||||||||||||||||||||||||||
| Amortization of in-place lease intangible assets | $ | 90 | $ | 90 | $ | 30 | $ | 270 | $ | 30 | |||||||||||||||||
| REVENUE MIX BY END MARKET | |||||||||||||||||||||||||||
| Communications | 28 | % | 27 | % | 26 | % | 26 | % | 23 | % | |||||||||||||||||
| Computer | 5 | % | 6 | % | 7 | % | 6 | % | 7 | % | |||||||||||||||||
| Consumer | 37 | % | 35 | % | 36 | % | 37 | % | 37 | % | |||||||||||||||||
| Industrial | 30 | % | 32 | % | 31 | % | 31 | % | 33 | % | |||||||||||||||||
