Power Integrations (POWI) Q4 1999 earnings summary

Executive summary

• FY1999 revenue rose 48.7% to $104.1M and net income increased 93% to $24.5M, driven by strong demand across major markets, especially cellular phones.

• Growth investments expanded engineering, sales support and international reach; priorities include wireless markets, energy efficiency and new applications.

Financial highlights

• FY1999 net revenue was $104.067M; operating income $26.664M; net income $24.477M; diluted EPS $0.87.

• Q4 revenue was $30.127M, essentially flat QoQ; net income was $7.515M and diluted EPS was $0.26.

• Gross profit rose to $57.273M from $33.370M; gross margin was 55.0% vs. 47.7% in 1998.

• A one-time $1.4M wafer-supplier credit improved FY1999 gross margin by 1.3 percentage points; Q3 margin benefited by ~4%.

• Operating expenses were $30.609M, including ~$4.1M in additional Motorola litigation costs.

Outlook and guidance

• Other operating expenses were expected to rise in absolute dollars as investment continued in R&D, sales and marketing, and administration; Motorola legal costs were expected to decline.

• Higher-power products planned for introduction in 2000 were expected to support expansion into higher-power applications; TOPSwitch-FX targets printers, DVDs and LCD monitors.

• Operating cash and existing liquidity were expected to cover working-capital and other cash needs for at least 12 months.

• SAB 101 adoption was planned for Q1 2000, with its effect on results and financial position still under evaluation.