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Power Integrations Reports Third-Quarter Financial Results

Power Integrations (Nasdaq: POWI) today announced financial results for the quarter ended September 30, 2012. Net revenues for the quarter were $78.0 million, up two percent from the prior quarter and up four percent compared with the third quarter of 2011. GAAP gross margin for the quarter was 49.7 percent.

As announced earlier this week, the company’s third-quarter results include a pre-tax charge of $59.2 million stemming from the likely closure of SemiSouth Laboratories. The expected cash outflow included in the charge is $15.3 million. Including the charge, the company reported a GAAP net loss for the quarter of $44.4 million or $1.54 per share. This compares to a net loss of $0.25 per share in the prior quarter and net income of $0.25 per diluted share in the year-ago quarter. The loss in the prior quarter was driven by the settlement of the company’s tax audit for years 2003-2006, which resulted in a one-time net charge of $15.7 million in the second quarter.

In addition to its GAAP results, the company provided certain non-GAAP financial measures that, for the third quarter, exclude stock-based compensation expenses, certain acquisition-related costs and expenses, the charge related to SemiSouth, non-cash interest income, and the tax effects of these items. Non-GAAP gross margin for the third quarter was 52.9 percent. Non-GAAP net income for the quarter was $14.5 million or $0.49 per diluted share, compared with $0.49 per diluted share in the prior quarter and $0.32 per diluted share in the third quarter of 2011.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “While third-quarter revenues were in line with our forecast, we expect lower revenues in the fourth quarter as global economic conditions continue to weigh on end demand across the industry. However, our gross margin expanded again in the third quarter and has improved significantly over the past year thanks to the substantial cost reductions we have achieved, plus the benefit of a more favorable end-market mix. While the impact of mix will fluctuate over time, we expect our gross margin to remain at a similar level in the fourth quarter.”

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