Power Integrations, Inc. (Nasdaq:POWI – News), a leading supplier of high-voltage analog integrated circuits used in power conversion, announced on Wednesday its financial results for the quarter ended March 31, 2005. Net revenues for the quarter totaled $34.4 million, up 2 percent compared to the prior quarter and up 1 percent from the year-ago quarter. Net income for the quarter was $4.7 million, or $0.15 per diluted share, compared to $4.5 million or $0.14 per diluted share in the prior quarter and $5.1 million or $0.16 per diluted share in the year-ago quarter. The company’s results for the first quarter included an adjustment to deferred income on sales to distributors. This adjustment resulted in the recognition of $1.1 million in previously deferred revenue and an increase in net income of $0.4 million, or $0.01 per diluted share.
“Revenues and earnings for the quarter came in ahead of our expectations, and we maintained our gross margin despite a highly competitive business environment,” noted Balu Balakrishnan, president and CEO of Power Integrations. “We are also encouraged by the accelerating global efforts by policy makers to establish standards to improve the energy efficiency of electronic products.”
Gross margin for the quarter was 48.3 percent, unchanged from the prior quarter. Operating expenses for the quarter totaled $10.9 million, an increase of 12 percent from the prior quarter. The increase was driven primarily by patent-litigation expenses as well as higher-than-expected audit fees associated with Sarbanes-Oxley 404 compliance. Patent-litigation expenses totaled $0.5 million in the first quarter. Operating margin for the quarter was 16.7 percent, down from 19.4 percent in the prior quarter as a result of the increase in operating expenses. Cash and investments at March 31, 2005 totaled $122.7 million, down $11.9 million from the end of the prior quarter as a result of the company’s share repurchase program. During the quarter, the company repurchased 1.1 million shares for approximately $20.2 million. In October 2004, the company’s board of directors authorized the repurchase of up to $40 million worth of the company’s shares. To-date, including purchases made subsequent to the end of the first quarter, the company has repurchased a total of 1.8 million shares for an aggregate of approximately $35.2 million. Revenue mix by market for the first quarter was: 31 percent consumer, 30 percent communications, 24 percent computer, 9 percent industrial, and 6 percent other. Product revenue mix for the quarter was 55 percent TinySwitch-I and TinySwitch-II, 27 percent TOPSwitch-FX and TOPSwitch-GX, 14 percent TOPSwitch-I and TOPSwitch-II and 4 percent LinkSwitch and DPA-Switch.
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