Le Lézard
Classified in: Environment, Business, Covid-19 virus
Subjects: EARNINGS, Dividend, Conference Call, Webcast

Power Integrations Reports Second-Quarter Financial Results


Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended June 30, 2021. Per-share measures for all periods reflect the effect of the August 2020 two-for-one stock split.

Net revenues for the second quarter of 2021 were $180.1 million, up four percent compared to the prior quarter and up 69 percent from the second quarter of 2020. Net income for the second quarter was $41.9 million or $0.68 per diluted share compared to $0.65 per diluted share in the prior quarter and $0.22 per diluted share in the second quarter of 2020. Cash flow from operations for the second quarter was $66.8 million.

In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation, amortization of acquisition-related intangible assets and the tax effects of these items. Non-GAAP net income for the second quarter of 2021 was $50.8 million or $0.83 per diluted share compared with $0.76 per diluted share in the prior quarter and $0.33 per diluted share in the second quarter of 2020. A reconciliation of GAAP to non-GAAP financial results appears at the end of this press release.

Commented Balu Balakrishnan, president and CEO of Power Integrations: "We achieved record sales in the second quarter, and our revenues for the first half of 2021 are up 63 percent from a year ago. This growth reflects significant market-share gains and the impact of secular trends such as energy efficiency, electrification, advanced charging for mobile devices, and smarter homes, buildings and appliances."

Additional Highlights

Financial Outlook

The company issued the following forecast for the third quarter of 2021:

Conference Call Today at 1:30 p.m. Pacific Time

Power Integrations management will hold a conference call today at 1:30 p.m. Pacific time. Members of the investment community can register for the call by visiting the following link: http://www.directeventreg.com/registration/event/8646289. A live webcast of the call will also be available on the investor section of the company's website, http://investors.power.com.

About Power Integrations

Power Integrations, Inc. is a leading innovator in semiconductor technologies for high-voltage power conversion. The company's products are key building blocks in the clean-power ecosystem, enabling the generation of renewable energy as well as the efficient transmission and consumption of power in applications ranging from milliwatts to megawatts. For more information please visit www.power.com.

Note Regarding Use of Non-GAAP Financial Measures

In addition to the company's consolidated financial statements, which are presented according to GAAP, the company provides certain non-GAAP financial information that excludes stock-based compensation expenses recorded under ASC 718-10, amortization of acquisition-related intangible assets, and the tax effects of these items. The company uses these measures in its financial and operational decision-making and, with respect to one measure, in setting performance targets for compensation purposes. The company believes that these non-GAAP measures offer important analytical tools to help investors understand its operating results, and to facilitate comparability with the results of companies that provide similar measures. Non-GAAP measures have limitations as analytical tools and are not meant to be considered in isolation or as a substitute for GAAP financial information. For example, stock-based compensation is an important component of the company's compensation mix, and will continue to result in significant expenses in the company's GAAP results for the foreseeable future, but is not reflected in the non-GAAP measures. Also, other companies, including companies in Power Integrations' industry, may calculate non-GAAP measures differently, limiting their usefulness as comparative measures. Reconciliations of non-GAAP measures to GAAP measures are attached to this press release.

Note Regarding Forward-Looking Statements

The above statements regarding the company's forecast for its third-quarter financial performance 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: the impact of the COVID-19 pandemic on demand for the company's products, its ability to supply products and its ability to conduct other aspects of its business such as competing for new design wins; changes in global macroeconomic conditions, including changing tariffs and uncertainty regarding trade negotiations, 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's revenues to decrease or cause the company to decrease its selling prices for its products; 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 5, 2021. 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 law.

Power Integrations and the Power Integrations logo are trademarks or registered trademarks of Power Integrations, Inc.

POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per-share amounts)
 
 
Three Months Ended Six Months Ended
June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
NET REVENUES

$

180,110

 

$

173,737

 

$

106,832

 

$

353,847

 

$

216,496

 

 
COST OF REVENUES

 

88,797

 

 

89,326

 

 

53,296

 

 

178,123

 

 

106,480

 

 
GROSS PROFIT

 

91,313

 

 

84,411

 

 

53,536

 

 

175,724

 

 

110,016

 

 
OPERATING EXPENSES:
Research and development

 

21,741

 

 

20,027

 

 

19,770

 

 

41,768

 

 

38,922

 

Sales and marketing

 

15,097

 

 

13,907

 

 

12,807

 

 

29,004

 

 

26,023

 

General and administrative

 

9,306

 

 

10,075

 

 

7,804

 

 

19,381

 

 

16,565

 

Amortization of acquisition-related intangible assets

 

193

 

 

216

 

 

230

 

 

409

 

 

487

 

Total operating expenses

 

46,337

 

 

44,225

 

 

40,611

 

 

90,562

 

 

81,997

 

 
INCOME FROM OPERATIONS

 

44,976

 

 

40,186

 

 

12,925

 

 

85,162

 

 

28,019

 

 
OTHER INCOME

 

173

 

 

597

 

 

1,480

 

 

770

 

 

3,257

 

 
INCOME BEFORE INCOME TAXES

 

45,149

 

 

40,783

 

 

14,405

 

 

85,932

 

 

31,276

 

 
PROVISION FOR INCOME TAXES

 

3,268

 

 

985

 

 

1,213

 

 

4,253

 

 

2,198

 

 
NET INCOME

$

41,881

 

$

39,798

 

$

13,192

 

$

81,679

 

$

29,078

 

 
EARNINGS PER SHARE:
Basic

$

0.69

 

$

0.66

 

$

0.22

 

$

1.35

 

$

0.49

 

Diluted

$

0.68

 

$

0.65

 

$

0.22

 

$

1.33

 

$

0.48

 

 
SHARES USED IN PER-SHARE CALCULATION:
Basic

 

60,544

 

 

60,184

 

 

59,712

 

 

60,366

 

 

59,458

 

Diluted

 

61,466

 

 

61,451

 

 

60,624

 

 

61,481

 

 

60,464

 

 
 
 
SUPPLEMENTAL INFORMATION: Three Months Ended Six Months Ended
June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Stock-based compensation expenses included in:
Cost of revenues

$

640

 

$

631

 

$

252

 

$

1,271

 

$

648

 

Research and development

 

3,159

 

 

2,391

 

 

2,351

 

 

5,550

 

 

4,460

 

Sales and marketing

 

1,725

 

 

1,614

 

 

1,258

 

 

3,339

 

 

2,650

 

General and administrative

 

3,676

 

 

3,844

 

 

2,120

 

 

7,520

 

 

4,933

 

Total stock-based compensation expense

$

9,200

 

$

8,480

 

$

5,981

 

$

17,680

 

$

12,691

 

 
Cost of revenues includes:
Amortization of acquisition-related intangible assets

$

619

 

$

754

 

$

799

 

$

1,373

 

$

1,598

 

 
 
Three Months Ended Six Months Ended
REVENUE MIX BY END MARKET June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Communications

 

35

%

 

38

%

 

28

%

 

37

%

 

25

%

Computer

 

8

%

 

8

%

 

6

%

 

8

%

 

5

%

Consumer

 

31

%

 

29

%

 

31

%

 

30

%

 

36

%

Industrial

 

26

%

 

25

%

 

35

%

 

25

%

 

34

%

POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)
 
Three Months Ended Six Months Ended
June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
RECONCILIATION OF GROSS PROFIT
GAAP gross profit

$

91,313

 

$

84,411

 

$

53,536

 

$

175,724

 

$

110,016

 

GAAP gross margin

 

50.7

%

 

48.6

%

 

50.1

%

 

49.7

%

 

50.8

%

 
Stock-based compensation included in cost of revenues

 

640

 

 

631

 

 

252

 

 

1,271

 

 

648

 

Amortization of acquisition-related intangible assets

 

619

 

 

754

 

 

799

 

 

1,373

 

 

1,598

 

 
Non-GAAP gross profit

$

92,572

 

$

85,796

 

$

54,587

 

$

178,368

 

$

112,262

 

Non-GAAP gross margin

 

51.4

%

 

49.4

%

 

51.1

%

 

50.4

%

 

51.9

%

 
 
Three Months Ended Six Months Ended
RECONCILIATION OF OPERATING EXPENSES June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
GAAP operating expenses

$

46,337

 

$

44,225

 

$

40,611

 

$

90,562

 

$

81,997

 

 
Less: Stock-based compensation expense included in operating expenses
Research and development

 

3,159

 

 

2,391

 

 

2,351

 

 

5,550

 

 

4,460

 

Sales and marketing

 

1,725

 

 

1,614

 

 

1,258

 

 

3,339

 

 

2,650

 

General and administrative

 

3,676

 

 

3,844

 

 

2,120

 

 

7,520

 

 

4,933

 

Total

 

8,560

 

 

7,849

 

 

5,729

 

 

16,409

 

 

12,043

 

 
Amortization of acquisition-related intangible assets

 

193

 

 

216

 

 

230

 

 

409

 

 

487

 

 
Non-GAAP operating expenses

$

37,584

 

$

36,160

 

$

34,652

 

$

73,744

 

$

69,467

 

 
 
Three Months Ended Six Months Ended
RECONCILIATION OF INCOME FROM OPERATIONS June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
GAAP income from operations

$

44,976

 

$

40,186

 

$

12,925

 

$

85,162

 

$

28,019

 

GAAP operating margin

 

25.0

%

 

23.1

%

 

12.1

%

 

24.1

%

 

12.9

%

 
Add: Total stock-based compensation

 

9,200

 

 

8,480

 

 

5,981

 

 

17,680

 

 

12,691

 

Amortization of acquisition-related intangible assets

 

812

 

 

970

 

 

1,029

 

 

1,782

 

 

2,085

 

 
Non-GAAP income from operations

$

54,988

 

$

49,636

 

$

19,935

 

$

104,624

 

$

42,795

 

Non-GAAP operating margin

 

30.5

%

 

28.6

%

 

18.7

%

 

29.6

%

 

19.8

%

 
 
Three Months Ended Six Months Ended
RECONCILIATION OF PROVISION FOR INCOME TAXES June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
GAAP provision for income taxes

$

3,268

 

$

985

 

$

1,213

 

$

4,253

 

$

2,198

 

GAAP effective tax rate

 

7.2

%

 

2.4

%

 

8.4

%

 

4.9

%

 

7.0

%

 
Tax effect of adjustments to GAAP results

 

(1,101

)

 

(2,578

)

 

(272

)

 

(3,679

)

 

(1,023

)

 
Non-GAAP provision for income taxes

$

4,369

 

$

3,563

 

$

1,485

 

$

7,932

 

$

3,221

 

Non-GAAP effective tax rate

 

7.9

%

 

7.1

%

 

6.9

%

 

7.5

%

 

7.0

%

 
 
Three Months Ended Six Months Ended
RECONCILIATION OF NET INCOME PER SHARE (DILUTED) June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
GAAP net income

$

41,881

 

$

39,798

 

$

13,192

 

$

81,679

 

$

29,078

 

 
Adjustments to GAAP net income
Stock-based compensation

 

9,200

 

 

8,480

 

 

5,981

 

 

17,680

 

 

12,691

 

Amortization of acquisition-related intangible assets

 

812

 

 

970

 

 

1,029

 

 

1,782

 

 

2,085

 

Tax effect of items excluded from non-GAAP results

 

(1,101

)

 

(2,578

)

 

(272

)

 

(3,679

)

 

(1,023

)

 
Non-GAAP net income

$

50,792

 

$

46,670

 

$

19,930

 

$

97,462

 

$

42,831

 

 
Average shares outstanding for calculation
of non-GAAP net income per share (diluted)

 

61,466

 

 

61,451

 

 

60,624

 

 

61,481

 

 

60,464

 

 
Non-GAAP net income per share (diluted)

$

0.83

 

$

0.76

 

$

0.33

 

$

1.59

 

$

0.71

 

 
GAAP net income per share (diluted)

$

0.68

 

$

0.65

 

$

0.22

 

$

1.33

 

$

0.48

 

POWER INTEGRATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
 
 
June 30, 2021 March 31, 2021 December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents

$

297,481

 

$

343,272

 

$

258,874

 

Short-term marketable securities

 

217,777

 

 

148,067

 

 

190,318

 

Accounts receivable, net

 

41,352

 

 

42,257

 

 

35,910

 

Inventories

 

89,643

 

 

90,509

 

 

102,878

 

Prepaid expenses and other current assets

 

21,292

 

 

18,207

 

 

13,252

 

Total current assets

 

667,545

 

 

642,312

 

 

601,232

 

 
PROPERTY AND EQUIPMENT, net

 

167,079

 

 

168,712

 

 

166,188

 

INTANGIBLE ASSETS, net

 

10,601

 

 

11,474

 

 

12,506

 

GOODWILL

 

91,849

 

 

91,849

 

 

91,849

 

DEFERRED TAX ASSETS

 

2,072

 

 

1,892

 

 

3,339

 

OTHER ASSETS

 

28,703

 

 

28,480

 

 

28,225

 

Total assets

$

967,849

 

$

944,719

 

$

903,339

 

 
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable

$

41,898

 

$

38,172

 

$

34,712

 

Accrued payroll and related expenses

 

16,652

 

 

13,339

 

 

14,806

 

Taxes payable

 

989

 

 

856

 

 

902

 

Other accrued liabilities

 

8,727

 

 

10,160

 

 

12,106

 

Total current liabilities

 

68,266

 

 

62,527

 

 

62,526

 

 
LONG-TERM LIABILITIES:
Income taxes payable

 

14,340

 

 

14,033

 

 

15,588

 

Other liabilities

 

14,899

 

 

14,336

 

 

14,814

 

Total liabilities

 

97,505

 

 

90,896

 

 

92,928

 

 
STOCKHOLDERS' EQUITY:
Common stock

 

28

 

 

29

 

 

28

 

Additional paid-in capital

 

185,878

 

 

203,051

 

 

190,920

 

Accumulated other comprehensive loss

 

(3,155

)

 

(2,836

)

 

(2,163

)

Retained earnings

 

687,593

 

 

653,579

 

 

621,626

 

Total stockholders' equity

 

870,344

 

 

853,823

 

 

810,411

 

Total liabilities and stockholders' equity

$

967,849

 

$

944,719

 

$

903,339

 

POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Three Months Ended Six Months Ended
June 30, 2021 March 31, 2021 June 30, 2020 June 30, 2021 June 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income

$

41,881

 

$

39,798

 

$

13,192

 

$

81,679

 

$

29,078

 

Adjustments to reconcile net income to cash provided by operating activities
Depreciation

 

7,821

 

 

7,453

 

 

5,581

 

 

15,274

 

 

11,069

 

Amortization of intangible assets

 

873

 

 

1,032

 

 

1,090

 

 

1,905

 

 

2,207

 

Loss on disposal of property and equipment

 

21

 

 

17

 

 

262

 

 

38

 

 

292

 

Stock-based compensation expense

 

9,200

 

 

8,480

 

 

5,981

 

 

17,680

 

 

12,691

 

Amortization of premium on marketable securities

 

124

 

 

176

 

 

167

 

 

300

 

 

321

 

Deferred income taxes

 

(263

)

 

1,445

 

 

184

 

 

1,182

 

 

1,279

 

Increase (decrease) in accounts receivable allowance for credit losses

 

93

 

 

(2

)

 

-

 

 

91

 

 

(154

)

Change in operating assets and liabilities:
Accounts receivable

 

812

 

 

(6,345

)

 

7,725

 

 

(5,533

)

 

11,556

 

Inventories

 

866

 

 

12,369

 

 

(7,330

)

 

13,235

 

 

(13,583

)

Prepaid expenses and other assets

 

(1,248

)

 

(3,253

)

 

8,084

 

 

(4,501

)

 

4,092

 

Accounts payable

 

4,772

 

 

3,281

 

 

(2,967

)

 

8,053

 

 

5,861

 

Taxes payable and other accrued liabilities

 

1,896

 

 

(6,329

)

 

4,684

 

 

(4,433

)

 

(1,665

)

Net cash provided by operating activities

 

66,848

 

 

58,122

 

 

36,653

 

 

124,970

 

 

63,044

 

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment

 

(8,243

)

 

(11,051

)

 

(10,019

)

 

(19,294

)

 

(21,622

)

Proceeds from sale of property and equipment

 

10

 

 

25

 

 

331

 

 

35

 

 

331

 

Purchases of marketable securities

 

(166,782

)

 

(21,971

)

 

(2,989

)

 

(188,753

)

 

(19,827

)

Proceeds from sales and maturities of marketable securities

 

96,617

 

 

63,466

 

 

43,015

 

 

160,083

 

 

58,962

 

Net cash provided by (used in) investing activities

 

(78,398

)

 

30,469

 

 

30,338

 

 

(47,929

)

 

17,844

 

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock

 

-

 

 

3,652

 

 

769

 

 

3,652

 

 

6,298

 

Repurchase of common stock

 

(26,374

)

 

-

 

 

(623

)

 

(26,374

)

 

(2,636

)

Payments of dividends to stockholders

 

(7,867

)

 

(7,845

)

 

(6,271

)

 

(15,712

)

 

(11,915

)

Net cash used in financing activities

 

(34,241

)

 

(4,193

)

 

(6,125

)

 

(38,434

)

 

(8,253

)

 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(45,791

)

 

84,398

 

 

60,866

 

 

38,607

 

 

72,635

 

 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

343,272

 

 

258,874

 

 

190,459

 

 

258,874

 

 

178,690

 

 
CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

297,481

 

$

343,272

 

$

251,325

 

$

297,481

 

$

251,325

 

 


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