Power Integrations Reports Third Quarter Results; Double-Digit Year-Over-Year Revenue Growth
Power Integrations announced financial results for the third quarter of 2009, which ended September 30, 2009. Net revenues for the quarter were $60.0 million, up 12% from the third quarter of 2008 and an increase of 22% compared with the second quarter of 2009. Net income for the third quarter was $9.2 million, or $0.32 per diluted share, compared with net income of $7.6 million, or $0.23 per diluted share, in the year-ago quarter, and net income of $4.5 million, or $0.16 per diluted share, in the second quarter of 2009. Gross margin for the third quarter was 48.5%.
In addition to its GAAP results, the company provided certain non-GAAP measures that exclude stock-based compensation expenses and the related tax effects. Non-GAAP net income for the third quarter of 2009 was $10.4 million, or $0.36 per diluted share, compared with $11.0 million or $0.34 per diluted share in the year-ago quarter and $6.9 million or $0.25 per diluted share in the second quarter of 2009. Non-GAAP gross margin for the third quarter was 48.8%.
Cash flow from operations was $16.1 million for the third quarter. Free cash flow (defined as cash flow from operations less capital expenditures of $4.1 million) was $12.0 million. The company ended the third quarter with $176.8 million in cash and investments, an increase of $17.7 million during the quarter.
Balu Balakrishnan, President and CEO of Power Integrations, commented, "Power Integrations achieved double-digit year-over-year revenue growth and attained record sales and earnings against a backdrop of negative revenue growth for the broader analog semiconductor industry. Our revenues have recovered sharply from the downturn, increasing by nearly 50% over the past two quarters. While factors such as inventory replenishment and consumer subsidies in China have undoubtedly contributed to the strong recovery, we believe our outperformance compared with the broader industry over the past year primarily reflects gains in market penetration."
Balakrishnan continued, "We believe that energy-efficiency is a major driver of the success we are having in the marketplace. The importance of efficiency in the electronics industry continues to grow due to a combination of mandatory standards such as the European EcoDesign Directive, voluntary specifications such as ENERGY STAR® and, increasingly, proactive efforts on the part of manufacturers. Our EcoSmart® technology, combined with our extensive system-design expertise, enables manufacturers to design highly efficient ac-dc power supplies in a cost-effective manner."
Bill Roeschlein, Power Integrations’ Chief Financial Officer, added, "Our third-quarter results demonstrated two of the strengths of our financial model-operating-expense leverage and high cash flow. Our non-GAAP operating margin expanded by more than five percentage points compared with the prior quarter, exceeding 20% for the quarter. Our GAAP operating margin exceeded 18%, and we achieved record GAAP net income of $9.2 million. We also generated free cash flow of $12 million and added nearly $18 million in cash and investments to our balance sheet."
