Power Integrations, Inc. announced financial results for the first quarter ended March 31, 2014, included net revenues of $83.1 million, eight percent lower than the prior quarter and up eight percent from the first quarter of 2013. GAAP net income for the quarter was $12.4 million or $0.40 per diluted share, compared with $0.52 per diluted share in the prior quarter and $0.37 per diluted share in the first quarter of 2013. GAAP gross margin for the first quarter was 55.3 percent; operating margin was 15.3 percent.
In addition to its GAAP results, the company provided non-GAAP financial measures that exclude stock-based compensation expenses, acquisition-related amortization expenses, and the tax effects of these items. Non-GAAP net income for the first quarter of 2014 was $17.5 million or $0.56 per diluted share, compared with $0.66 per diluted share in the prior quarter and $0.47 per diluted share in the first quarter of 2013. Non-GAAP gross margin for the first quarter was 56.4 percent; non-GAAP operating margin was 22.2 percent.
Commented Balu Balakrishnan, president and CEO of Power Integrations: "Our first-quarter revenues were less than we had expected but nevertheless grew eight percent from a year ago, while non-GAAP earnings per share grew nearly 20 percent year-over-year as our gross margin expanded and we controlled our expenses. We expect healthy sequential revenue growth in the second quarter, and we are positioned for a strong second half of 2014 as we ramp new products and continue to make progress in key growth areas such as LED lighting, rapid charging and high-power applications."
Additional highlights included: Cash flow from operations in the first quarter was $16.2 million; cash and investments increased by $15.5 million during the quarter to a total of $217.7 million. The company paid a dividend of $0.10 per share on March 31, 2014. The next dividend of $0.10 per share is to be paid on June 30, 2014, to stockholders of record as of May 30. The company's board of directors has declared an increase in the quarterly dividend to $0.12 per share beginning in the third quarter of 2014. Power Integrations received 18 U.S. patents and 17 non-U.S. patents during the quarter and had a total of 626 U.S. patents and 500 non-U.S. patents as of March 31, 2014.
The company issued the following forecast for the second quarter of 2014: Second-quarter revenues are expected to be $89 million, plus or minus $3 million. Non-GAAP gross margin is expected to be approximately 54.5 percent. (Excludes approximately $0.3 million of stock-based compensation and $0.6 million of amortization of acquisition-related intangibles.) GAAP gross margin is expected to be approximately 53.5 percent. Non-GAAP operating expenses are expected to be between $29 million and $29.5 million. (Excludes from GAAP operating expenses approximately $4 million of stock-based compensation expenses and $1 million of amortization expense for acquisition-related intangible assets.) GAAP operating expenses are expected to be between $34 million and $34.5 million.