Power Integrations Reports First-Quarter Financial Results

POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)

			Three Months Ended
			March 31, 2019			December 31, 2018			March 31, 2018
RECONCILIATION OF GROSS PROFIT
GAAP gross profit			$	45,474		$	48,005		$	53,544
	GAAP gross margin			51.0	%		51.4	%		51.9	%

Stock-based compensation included in cost of revenues				271			313			249
Amortization of acquisition-related intangible assets				794			813			813

Non-GAAP gross profit			$	46,539		$	49,131		$	54,606
	Non-GAAP gross margin			52.2	%		52.7	%		53.0	%


RECONCILIATION OF OPERATING EXPENSES
GAAP operating expenses			$	39,353		$	39,962		$	39,583

Less:	Stock-based compensation expense included in operating expenses
		Research and development		1,632			1,944			1,839
		Sales and marketing		1,061			1,222			1,276
		General and administrative		1,443			1,963			2,261
		Total		4,136			5,129			5,376

	Amortization of acquisition-related intangible assets			427			455			514

Non-GAAP operating expenses			$	34,790		$	34,378		$	33,693


RECONCILIATION OF INCOME FROM OPERATIONS
GAAP income from operations			$	6,121		$	8,043		$	13,961
	GAAP operating margin			6.9	%		8.6	%		13.5	%

Add:	Total stock-based compensation			4,407			5,442			5,625
	Amortization of acquisition-related intangible assets			1,221			1,268			1,327

Non-GAAP income from operations			$	11,749		$	14,753		$	20,913
	Non-GAAP operating margin			13.2	%		15.8	%		20.3	%


RECONCILIATION OF PROVISION (BENEFIT) FOR INCOME TAXES
GAAP provision (benefit) for income taxes			$	40		$	(13,396	)	$	597
	GAAP effective tax rate			0.5	%		-143.4	%		4.0	%

Impact of U.S. tax legislation				-			(9,687	)		-
Tax effect of adjustments to GAAP results				(799	)		(3,846	)		(789	)

Non-GAAP provision for income taxes			$	839		$	137		$	1,386
	Non-GAAP effective tax rate			6.5	%		0.9	%		6.4	%


RECONCILIATION OF NET INCOME PER SHARE (DILUTED)
GAAP net income			$	7,233		$	22,736		$	14,200

Adjustments to GAAP net income
	Stock-based compensation			4,407			5,442			5,625
	Amortization of acquisition-related intangible assets			1,221			1,268			1,327
	Impact of U.S. tax legislation			-			(9,687	)		-
	Tax effect of items excluded from non-GAAP results			(799	)		(3,846	)		(789	)

Non-GAAP net income			$	12,062		$	15,913		$	20,363

Average shares outstanding for calculation of non-GAAP net income per share (diluted)				29,446			29,651			30,552

Non-GAAP net income per share (diluted)			$	0.41		$	0.54		$	0.67

GAAP net income per share			$	0.25		$	0.77		$	0.46

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