Power Integrations Reports Fourth-Quarter and Full-Year Financial Results

Rhea-AI Summary

Power Integrations (Nasdaq: POWI) reported a 15% increase in quarterly revenues to $172.7 million year-over-year, with GAAP earnings of $0.66 per diluted share. Full-year revenues grew 44% to $703.3 million, while GAAP earnings reached $2.67 per diluted share. Operational cash flow for the year was $230.9 million. The company announced a 20% dividend increase to $0.18 per share and a new $100 million share repurchase authorization. A revenue forecast for Q1 2022 is set at $180 million, with operating expenses estimated between $48.5 million and $49.5 million.

Positive

• Quarterly revenues rose 15% YoY to $172.7 million.
• Full-year revenue increased by 44% to $703.3 million.
• Full-year GAAP earnings per diluted share reached $2.67, up from $1.17 the prior year.
• Non-GAAP earnings grew 92% to $3.26 per diluted share.
• Cash flow from operations for the year was $230.9 million.
• Quarterly dividend increased by 20% to $0.18 per share.
• $100 million added to share repurchase authorization.

Negative

• Quarterly revenues decreased by 2% compared to the prior quarter.
• Quarterly GAAP earnings per diluted share fell from $0.69 to $0.66.

Quarterly revenues increased 15 percent year-over-year to $172.7 million; GAAP earnings were $0.66 per diluted share; non-GAAP earnings were $0.83 per diluted share

Full-year revenues grew 44 percent to $703.3 million; full-year GAAP earnings were $2.67 per diluted share; non-GAAP earnings grew 92 percent to $3.26 per diluted share

Full-year cash flow from operations was $230.9 million; $100M added to repurchase authorization; quarterly dividend rises by 20 percent to $0.18 per share

SAN JOSE, Calif.--(BUSINESS WIRE)-- Power Integrations (Nasdaq: POWI) today announced financial results for the quarter and year ended December 31, 2021. Net revenues for the fourth quarter of 2021 were $172.7 million, down two percent compared to the prior quarter and up 15 percent from the fourth quarter of 2020. Net income for the fourth quarter was $40.7 million or $0.66 per diluted share compared to $0.69 per diluted share in the prior quarter and $0.45 per diluted share in the fourth quarter of 2020. Cash flow from operations for the fourth quarter was $47.2 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 fourth quarter of 2021 was $50.9 million or $0.83 per diluted share compared with $0.84 per diluted share in the prior quarter and $0.60 per diluted share in the fourth quarter of 2020. A reconciliation of GAAP to non-GAAP financial results is included with the tables accompanying this press release.

For the full year, net revenues were $703.3 million, an increase of 44 percent compared to the prior year. Net income was $164.4 million or $2.67 per diluted share, compared to $1.17 per diluted share in the prior year. Non-GAAP net income was $200.2 million or $3.26 per diluted share, up 92 percent compared to $1.70 per diluted share in the prior year. Cash flow from operations for the year was $230.9 million.

Commented Balu Balakrishnan, president and CEO of Power Integrations: “We capped an outstanding year with another strong quarter, and we are excited about the opportunities ahead. The secular trends underpinning our 2021 results—including energy efficiency, electrification, smart homes and appliances, and advanced chargers—remain in full effect for 2022. Our highly integrated GaN products are driving a revolution in smartphone and notebook chargers, and we expect a wide range of impressive new designs to come to market in the year ahead. Our BridgeSwitch™ motor-drive ICs are ramping at top-tier appliance customers, adding a new revenue stream for 2022. Our manufacturing model and our investments in capacity have been competitive advantages for us in this supply-constrained environment, and we are well positioned in terms of inventory and capacity to support strong demand in 2022.”

Additional Highlights

• Power Integrations repurchased approximately 423,000 shares of its common stock during the fourth quarter and approximately 820,000 shares in January, exhausting the $105 million remaining on the company’s repurchase authorization. The company’s board of directors has subsequently allocated an additional $100 million for share repurchases.
• The company paid a cash dividend of $0.15 per share on December 31, 2021. The company’s board of directors has declared a dividend of $0.18 per share to be paid on March 31, 2022 to stockholders of record as of February 28, 2022.

Financial Outlook

The company issued the following forecast for the first quarter of 2022:

• Revenues are expected to be $180 million plus or minus $5 million.
• Gross margins are expected to be similar to the levels of the prior quarter.
• GAAP operating expenses are expected to be between $48.5 million and $49.5 million; non-GAAP operating expenses are expected to be between $40.5 million and $41.5 million. Non-GAAP expenses are expected to exclude approximately $7.8 million of stock-based compensation and $0.2 million of amortization of acquisition-related intangible assets.

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: https://conferencingportals.com/event/iobnvsok. 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 first-quarter financial performance, secular trends remaining in full effect, adoption of GaN products, new designs coming to market and its ability to support strong demand in 2022 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, BridgeSwitch 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									Twelve Months Ended
				December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021		December 31, 2020
NET REVENUES				$ 172,654			$ 176,776			$ 150,693			$ 703,277		$ 488,318
COST OF REVENUES				79,478			85,037			76,688			342,638		244,728
GROSS PROFIT				93,176			91,739			74,005			360,639		243,590
OPERATING EXPENSES:
Research and development				22,028			21,137			21,921			84,933		81,711
Sales and marketing				15,590			15,443			14,113			60,037		53,578
General and administrative				11,073			9,386			10,028			39,840		36,895
Amortization of acquisition-related intangible assets				181			181			216			771		919
	Total operating expenses			48,872			46,147			46,278			185,581		173,103
INCOME FROM OPERATIONS				44,304			45,592			27,727			175,058		70,487
OTHER INCOME				101			206			630			1,077		4,764
INCOME BEFORE INCOME TAXES				44,405			45,798			28,357			176,135		75,251
PROVISION FOR INCOME TAXES				3,705			3,764			1,079			11,722		4,075
NET INCOME				$ 40,700			$ 42,034			$ 27,278			$ 164,413		$ 71,176
EARNINGS PER SHARE:
	Basic			$ 0.68			$ 0.70			$ 0.46			$ 2.73		$ 1.19
	Diluted			$ 0.66			$ 0.69			$ 0.45			$ 2.67		$ 1.17
SHARES USED IN PER-SHARE CALCULATION:
	Basic			60,259			60,319			59,879			60,327		59,657
	Diluted			61,381			61,363			61,176			61,467		60,845
SUPPLEMENTAL INFORMATION:				Three Months Ended									Twelve Months Ended
				December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021		December 31, 2020
Stock-based compensation expenses included in:
	Cost of revenues			$ 424			$ 664			$ 713			$ 2,359		$ 1,963
	Research and development			3,522			3,055			2,942			12,127		10,378
	Sales and marketing			2,090			2,201			1,740			7,630		6,290
	General and administrative			4,248			3,725			3,468			15,493		12,281
	Total stock-based compensation expense			$ 10,284			$ 9,645			$ 8,863			$ 37,609		$ 30,912
Cost of revenues includes:
	Amortization of acquisition-related intangible assets			$ 552			$ 552			$ 799			$ 2,477		$ 3,196
				Three Months Ended									Twelve Months Ended
REVENUE MIX BY END MARKET				December 31, 2021			September 30, 2021			December 31, 2020			December 31, 2021		December 31, 2020
	Communications			23%			25%			34%			30%		30%
	Computer			10%			11%			9%			10%		7%
	Consumer			35%			34%			31%			32%		33%
	Industrial			32%			30%			26%			28%		30%

POWER INTEGRATIONS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP RESULTS
(in thousands, except per-share amounts)
					Three Months Ended										Twelve Months Ended
					December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
RECONCILIATION OF GROSS PROFIT
GAAP gross profit					$ 93,176			$ 91,739			$ 74,005				$ 360,639			$ 243,590
	GAAP gross margin				54.0	%		51.9	%		49.1	%			51.3	%		49.9	%
Stock-based compensation included in cost of revenues					424			664			713				2,359			1,963
Amortization of acquisition-related intangible assets					552			552			799				2,477			3,196
Non-GAAP gross profit					$ 94,152			$ 92,955			$ 75,517				$ 365,475			$ 248,749
	Non-GAAP gross margin				54.5	%		52.6	%		50.1	%			52.0	%		50.9	%
					Three Months Ended										Twelve Months Ended
RECONCILIATION OF OPERATING EXPENSES					December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
GAAP operating expenses					$ 48,872			$ 46,147			$ 46,278				$ 185,581			$ 173,103
Less:	Stock-based compensation expense included in operating expenses
		Research and development			3,522			3,055			2,942				12,127			10,378
		Sales and marketing			2,090			2,201			1,740				7,630			6,290
		General and administrative			4,248			3,725			3,468				15,493			12,281
		Total			9,860			8,981			8,150				35,250			28,949
	Amortization of acquisition-related intangible assets				181			181			216				771			919
Non-GAAP operating expenses					$ 38,831			$ 36,985			$ 37,912				$ 149,560			$ 143,235
					Three Months Ended										Twelve Months Ended
RECONCILIATION OF INCOME FROM OPERATIONS					December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
GAAP income from operations					$ 44,304			$ 45,592			$ 27,727				$ 175,058			$ 70,487
	GAAP operating margin				25.7	%		25.8	%		18.4	%			24.9	%		14.4	%
Add:	Total stock-based compensation				10,284			9,645			8,863				37,609			30,912
	Amortization of acquisition-related intangible assets				733			733			1,015				3,248			4,115
Non-GAAP income from operations					$ 55,321			$ 55,970			$ 37,605				$ 215,915			$ 105,514
	Non-GAAP operating margin				32.0	%		31.7	%		25.0	%			30.7	%		21.6	%
					Three Months Ended										Twelve Months Ended
RECONCILIATION OF PROVISION FOR INCOME TAXES					December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
GAAP provision for income taxes					$ 3,705			$ 3,764			$ 1,079				$ 11,722			$ 4,075
	GAAP effective tax rate				8.3	%		8.2	%		3.8	%			6.7	%		5.4	%
Tax effect of adjustments to GAAP results					(800	)		(565	)		(725	)			(5,044	)		(2,719	)
Non-GAAP provision for income taxes					$ 4,505			$ 4,329			$ 1,804				$ 16,766			$ 6,794
	Non-GAAP effective tax rate				8.1	%		7.7	%		4.7	%			7.7	%		6.2	%
					Three Months Ended										Twelve Months Ended
RECONCILIATION OF NET INCOME PER SHARE (DILUTED)					December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
GAAP net income					$ 40,700			$ 42,034			$ 27,278				$ 164,413			$ 71,176
Adjustments to GAAP net income
	Stock-based compensation				10,284			9,645			8,863				37,609			30,912
	Amortization of acquisition-related intangible assets				733			733			1,015				3,248			4,115
	Tax effect of items excluded from non-GAAP results				(800	)		(565	)		(725	)			(5,044	)		(2,719	)
Non-GAAP net income					$ 50,917			$ 51,847			$ 36,431				$ 200,226			$ 103,484
Average shares outstanding for calculation
	of non-GAAP net income per share (diluted)				61,381			61,363			61,176				61,467			60,845
Non-GAAP net income per share (diluted)					$ 0.83			$ 0.84			$ 0.60				$ 3.26			$ 1.70
GAAP net income per share (diluted)					$ 0.66			$ 0.69			$ 0.45				$ 2.67			$ 1.17

POWER INTEGRATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
			December 31, 2021			September 30, 2021			December 31, 2020
ASSETS
	CURRENT ASSETS:
	Cash and cash equivalents		$ 158,117			$ 262,435			$ 258,874
	Short-term marketable securities		372,235			286,506			190,318
	Accounts receivable, net		41,393			38,872			35,910
	Inventories		99,266			91,814			102,878
	Prepaid expenses and other current assets		15,804			23,720			13,252
	Total current assets		686,815			703,347			601,232
	PROPERTY AND EQUIPMENT, net		179,824			168,498			166,188
	INTANGIBLE ASSETS, net		9,012			9,807			12,506
	GOODWILL		91,849			91,849			91,849
	DEFERRED TAX ASSETS		16,433			3,266			3,339
	OTHER ASSETS		30,554			28,223			28,225
	Total assets		$ 1,014,487			$ 1,004,990			$ 903,339
LIABILITIES AND STOCKHOLDERS’ EQUITY
	CURRENT LIABILITIES:
	Accounts payable		$ 43,721			$ 40,390			$ 34,712
	Accrued payroll and related expenses		15,492			14,064			14,806
	Taxes payable		1,210			970			902
	Other accrued liabilities		11,898			10,638			12,106
	Total current liabilities		72,321			66,062			62,526
	LONG-TERM LIABILITIES:
	Income taxes payable		15,280			14,644			15,588
	Other liabilities		14,854			15,928			14,814
	Total liabilities		102,455			96,634			92,928
STOCKHOLDERS' EQUITY:
	Common stock		28			28			28
	Additional paid-in capital		162,301			189,790			190,920
	Accumulated other comprehensive loss		(3,737	)		(3,249	)		(2,163	)
	Retained earnings		753,440			721,787			621,626
	Total stockholders' equity		912,032			908,356			810,411
	Total liabilities and stockholders' equity		$ 1,014,487			$ 1,004,990			$ 903,339

POWER INTEGRATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
		Three Months Ended										Twelve Months Ended
		December 31, 2021			September 30, 2021			December 31, 2020				December 31, 2021			December 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income	$ 40,700			$ 42,034			$ 27,278				$ 164,413			$ 71,176
	Adjustments to reconcile net income to cash provided by operating activities
	Depreciation	8,054			8,126			6,672				31,454			23,743
	Amortization of intangible assets	795			794			1,076				3,494			4,359
	Loss on disposal of property and equipment	905			2,162			214				3,105			525
	Stock-based compensation expense	10,284			9,645			8,863				37,609			30,912
	Amortization of premium on marketable securities	815			475			180				1,590			705
	Deferred income taxes	(13,228	)		(1,194	)		(692	)			(13,240	)		(592	)
	Increase (decrease) in accounts receivable allowance for credit losses	1			(74	)		(491	)			18			(336	)
	Change in operating assets and liabilities:
	Accounts receivable	(2,522	)		2,554			(5,972	)			(5,501	)		(11,300	)
	Inventories	(7,452	)		(2,171	)		1,927				3,612			(12,498	)
	Prepaid expenses and other assets	9,299			(472	)		3,020				4,326			9,153
	Accounts payable	(2,566	)		(1,420	)		(668	)			4,067			5,697
	Taxes payable and other accrued liabilities	2,078			(1,724	)		4,959				(4,079	)		4,095
	Net cash provided by operating activities	47,163			58,735			46,366				230,868			125,639
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchases of property and equipment	(16,967	)		(11,011	)		(34,860	)			(47,272	)		(70,598	)
	Proceeds from sale of property and equipment	-			-			320				35			651
	Purchases of marketable securities	(172,115	)		(193,150	)		(43,637	)			(554,018	)		(109,703	)
	Proceeds from sales and maturities of marketable securities	84,421			123,953			64,390				368,457			151,385
	Net cash used in investing activities	(104,661	)		(80,208	)		(13,787	)			(232,798	)		(28,265	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Net proceeds from issuance of common stock	-			4,058			865				7,710			10,527
	Repurchase of common stock	(37,773	)		(9,791	)		-				(73,938	)		(2,636	)
	Payments of dividends to stockholders	(9,047	)		(7,840	)		(6,584	)			(32,599	)		(25,081	)
	Net cash used in financing activities	(46,820	)		(13,573	)		(5,719	)			(98,827	)		(17,190	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(104,318	)		(35,046	)		26,860				(100,757	)		80,184
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		262,435			297,481			232,014				258,874			178,690
CASH AND CASH EQUIVALENTS AT END OF PERIOD		$ 158,117			$ 262,435			$ 258,874				$ 158,117			$ 258,874

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220203005910/en/

Joe Shiffler

Power Integrations, Inc.

(408) 414-8528

joe@power.com

Source: Power Integrations, Inc.

FAQ

What were the quarterly revenues for Power Integrations for Q4 2021?

Power Integrations reported quarterly revenues of $172.7 million for Q4 2021.

What is the forecasted revenue for Power Integrations in Q1 2022?

The forecasted revenue for Q1 2022 is $180 million, plus or minus $5 million.

What were the GAAP earnings per share for Power Integrations for the year ended 2021?

The GAAP earnings per diluted share for the year ended 2021 were $2.67.

How much did Power Integrations increase its dividend in 2022?

Power Integrations increased its quarterly dividend by 20% to $0.18 per share.

What was the cash flow from operations for Power Integrations in 2021?

The cash flow from operations for Power Integrations in 2021 was $230.9 million.