Power Integrations (POWI) Q4 2003 earnings summary

Executive summary

• FY03 net revenue reached a record $125.7M, up 16.2% YoY; operating income doubled to $24.1M and diluted EPS was $0.57.

• Growth reflected broader end-market penetration, lower manufacturing costs and demand for energy-efficient power-conversion ICs; revenues from non-cell-phone applications grew ~30% YoY.

Financial highlights

• Net revenue was $125.7M vs. $108.2M in FY02; product sales were $123.9M and royalties and license fees were $1.8M.

• Gross profit was $62.9M vs. $47.5M; net income was $18.1M vs. $9.6M.

• Cash from operating activities was $20.4M; cash, cash equivalents and short-term investments totaled $115.3M at year-end.

Outlook and guidance

• FY04 gross margin expected at 47%–49%; operating expenses expected to rise in absolute dollars as R&D, sales and marketing, and G&A resources expand.

• FY04 effective tax rate expected to remain 28%; cash from operations and existing liquidity were expected to cover needs for at least 12 months.

• LinkSwitch adoption expected to benefit from tighter efficiency standards; ZMD expected to begin wafer production by year-end 2004.