Company Expects Year-Over-Year Revenue Growth in the Third Quarter 

SAN JOSE, Calif., July 30, 2009 (GLOBE NEWSWIRE) -- Power Integrations (Nasdaq:POWI), the leader in high-voltage integrated circuits for energy-efficient power conversion, today announced financial results for the quarter ended June 30, 2009.

Net revenues for the second quarter of 2009 were $49.3 million, down eight percent from the second quarter of 2008 and up 22 percent compared with the prior quarter. Net income for the second quarter was $4.5 million, or $0.16 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 $0.4 million, or $0.01 per diluted share, in the first quarter of 2009. Gross margin for the second quarter was 49.1 percent.

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 second quarter of 2009 was $6.9 million, or $0.25 per diluted share, compared with $10.8 million or $0.33 per diluted share in the year-ago quarter and $3.9 million or $0.14 per diluted share in the first quarter of 2009. Non-GAAP gross margin for the second quarter was 49.7 percent.

Commented Balu Balakrishnan, president and CEO of Power Integrations: "We delivered quarterly revenues well above our original expectations and had an outstanding quarter in terms of profitability and cash flow. We believe that recent design-win momentum is now translating into strong top-line performance. In fact, we had record bookings in the second quarter, and orders have continued at a strong pace in July. While we remain cautious about the global economic outlook, and forecasting revenues remains challenging, we expect our revenues to grow on a year-over-year basis in the third quarter."

Balakrishnan added: "The increasing focus on energy efficiency among policymakers, manufacturers and consumers has increased the rate of design activity in the power-supply industry, giving us more opportunities to increase our market penetration. Our EcoSmart(r) energy-efficiency technology enables outstanding efficiency performance in a highly cost-effective fashion, giving us a competitive advantage whenever there is a meaningful efficiency requirement.

"The rapid ramp of our new LinkSwitch(r)-II product family is a prime example of the value of providing high efficiency at a low cost. LinkSwitch-II offers highly accurate primary-side control, allowing designers to forego expensive, energy-wasting feedback circuitry while meeting even the most stringent efficiency requirements, such as 30 milliwatts of no-load consumption. This combination of performance and cost-effectiveness has made LinkSwitch-II one of the most successful product introductions in our history."

Additional Highlights

    * Cash flow from operations was $17.4 million for the second quarter.    Free cash flow (defined as cash flow from operations less $1.7    million of capital expenditures) was $15.7 million.  * The company ended the second quarter with $159.1 million in cash and    investments, an increase of $7.1 million during the quarter.  * In May, Power Integrations initiated a $25 million stock-repurchase    program, under which it purchased 0.4 million shares during the    second quarter for a total of $8.9 million. From February 2008    through June 2009, the company repurchased an aggregate of 5.3    million shares for $108.8 million. Weighted-average shares    outstanding for the second quarter of 2009 were 28.0 million,    compared with 32.8 million in the second quarter of 2008.  * The company will pay a quarterly dividend of $0.025 per share on    September 30, 2009 to stockholders of record as of August 31, 2009.  * Power Integrations was issued 12 U.S. patents and 19 foreign patents    during the second quarter, and now has a total of 269 U.S. and 164    foreign patents. 

Third-Quarter Outlook

The company expects its revenues for the third quarter of 2009 to be between $54 million and $58 million. Third-quarter gross margin and operating expenses are expected to be similar to second-quarter levels.

Conference Call at 1:30 pm Pacific Time

Power Integrations management will hold a conference call today at 1:30 pm Pacific time. Members of the investment community can join the call by dialing 1-877-660-8922 from within the United States or 1-719-325-4909 from outside the U.S. The call will be available via a live and archived webcast on the investor section of the company's website, http://investors.powerint.com.

About Power Integrations

Power Integrations is the leading supplier of high-voltage analog integrated circuits used in energy-efficient power conversion. The company's innovative technology enables compact, energy-efficient power supplies in a wide range of electronic products, in AC-DC, DC-DC and LED lighting applications. Since its introduction in 1998, Power Integrations' EcoSmart energy-efficiency technology has saved an estimated $3.6 billion of standby energy waste and prevented millions of tons of CO2 emissions. The company's Green Room web site (www.powerint.com/greenroom) provides a wealth of information about "energy vampires" and the issue of standby energy waste, along with a comprehensive guide to energy-efficiency standards around the world. Reflecting the environmental benefits of EcoSmart technology, Power Integrations is included in clean-technology stock indices sponsored by the Cleantech Group (Amex:CTIUS) and Clean Edge (Nasdaq:CELS). For more information, please visit www.powerint.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 expenses (and the related tax effects thereof) recorded under SFAS 123R, "Share-based Payment." The company uses these non-GAAP measures in its own financial and operational decision-making processes and, with respect to one measure, in setting performance targets for employee-compensation purposes. Further, the company believes that these non-GAAP measures offer an important analytical tool to help investors understand the company's core operating results and trends, and to facilitate comparability with the company's historical results and with the operating results of other companies that provide similar non-GAAP measures. These non-GAAP measures have certain 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 financial measures differently, limiting their usefulness as a comparative measure.

Note Regarding Forward-Looking Statements

The statements in this press release relating to the company's projected third-quarter 2009 financial performance are forward-looking statements, reflecting management's current forecast. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt changes. Due to risks and uncertainties associated with the company's business, actual results could differ materially from those projected or implied by management's forward-looking statements. These risks and uncertainties include, but are not limited to: changes in global macroeconomic conditions that 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 company's ability to maintain and establish strategic relationships; the effects of competition; customer reaction to the effects of design wins may not be as the company expects; the risks inherent in the development and delivery of complex technologies; the outcome and cost of patent litigation; the company's ability to attract, retain and motivate qualified personnel; the emergence of new markets for the company's products and services; the company's ability to compete in those markets based on timeliness, cost and market demand; unforeseen costs and expenses; and fluctuations in currency exchange rates.