10-Q 1 powi-20220630x10q.htm 10-Q Q2'2022 Form 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

 

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2022

or

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______  to  ______

Commission File Number 000-23441

 

POWER INTEGRATIONS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

94-3065014

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

5245 Hellyer Avenue

San Jose,

California

 

95138

(Address of Principal Executive Offices)

 

(Zip Code)

(408) 414-9200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

   

Trading Symbol(s)

   

Name of each exchange on which registered

Common Stock

POWI

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 

Indicate by check mark whether the registrant submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes     No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer

Accelerated Filer 

Non-accelerated Filer

Smaller Reporting Company 

Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Shares Outstanding at August 1, 2022

Common Stock, $0.001 par value

57,180,783

POWER INTEGRATIONS, INC.

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (Unaudited)

4

Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022 and 2021 (Unaudited)

5

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2022 and 2021 (Unaudited)

6

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021 (Unaudited)

7

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (Unaudited)

8

Notes to Unaudited Condensed Consolidated Financial Statements

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

Item 4.

Controls and Procedures

29

PART II. OTHER INFORMATION

29

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 5.

Other Information

30

Item 6.

Exhibits

31

SIGNATURES

33

2

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes a number of forward-looking statements that involve many risks and uncertainties. Forward-looking statements are identified by the use of the words “would,” “could,” “will,” “may,” “expect,” “believe,” “should,” “anticipate,” “if,” “future,” “intend,” “plan,” “estimate,” “potential,” “target,” “seek,” or “continue” and similar words and phrases, including the negatives of these terms, or other variations of these terms, that denote future events. These statements reflect our current views with respect to future events and our potential financial performance and are subject to risks and uncertainties that could cause our actual results and financial position to differ materially and/or adversely from what is projected or implied in any forward-looking statements included in this Quarterly Report on Form 10-Q. These factors include, but are not limited to: risks related to changing worldwide economic conditions which could adversely affect our operating results and financial condition, the novel coronavirus pandemic (COVID-19), which has disrupted and may continue to disrupt our operations, including our manufacturing, research and development, and sales and marketing activities, which in turn could have a material adverse impact on our business and has or could exacerbate the risks discussed below; if demand for our products declines in our major end markets, our net revenues will decrease; our products are sold through distributors, which limits our direct interaction with our end customers, therefore reducing our ability to forecast sales and increasing the complexity of our business; we depend on third-party suppliers to provide us with wafers for our products, and if they fail to provide us sufficient quantities of wafers, our business may suffer; intense competition in the high-voltage power supply industry may lead to a decrease in our average selling price and reduced sales volume of our products; if our products do not penetrate additional markets, our business will not grow as we expect; we do not have long-term contracts with any of our customers and if they fail to place, or if they cancel or reschedule, orders for our products, our operating results and our business may suffer; if we are unable to adequately protect or enforce our intellectual property rights, we could lose market share, incur costly litigation expenses, suffer incremental price erosion or lose valuable assets, any of which could harm our operations and negatively impact our profitability; and the other risk factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, and in Part I, Item 2 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q. We make these forward-looking statements based upon information available on the date of this Quarterly Report on Form 10-Q, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information or otherwise, except as required by laws.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

June 30, 2022

December 31, 2021

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

67,383

$

158,117

Short-term marketable securities

 

260,209

 

372,235

Accounts receivable, net

 

27,980

 

41,393

Inventories

 

111,258

 

99,266

Prepaid expenses and other current assets

 

14,219

 

15,804

Total current assets

 

481,049

 

686,815

PROPERTY AND EQUIPMENT, net

 

184,245

 

179,824

INTANGIBLE ASSETS, net

 

7,684

 

9,012

GOODWILL

 

91,849

 

91,849

DEFERRED TAX ASSETS

 

19,830

 

16,433

OTHER ASSETS

 

24,347

 

30,554

Total assets

$

809,004

$

1,014,487

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

CURRENT LIABILITIES:

 

 

Accounts payable

$

41,402

$

43,721

Accrued payroll and related expenses

 

14,569

 

15,492

Taxes payable

 

561

 

1,210

Other accrued liabilities

 

13,597

 

11,898

Total current liabilities

 

70,129

 

72,321

LONG-TERM INCOME TAXES PAYABLE

 

15,739

 

15,280

OTHER LIABILITIES

 

12,891

 

14,854

Total liabilities

 

98,759

 

102,455

COMMITMENTS AND CONTINGENCIES (Notes 11, 12 and 13)

 

  

 

  

STOCKHOLDERS’ EQUITY:

 

  

 

  

Common stock

 

24

 

28

Additional paid-in capital

 

 

162,301

Accumulated other comprehensive loss

 

(10,060)

 

(3,737)

Retained earnings

 

720,281

 

753,440

Total stockholders’ equity

 

710,245

 

912,032

Total liabilities and stockholders’ equity

$

809,004

$

1,014,487

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

Three Months Ended

Six Months Ended

    

June 30, 

June 30, 

(In thousands, except per share amounts)

2022

    

2021

    

2022

    

2021

NET REVENUES

$

183,986

$

180,110

$

366,135

$

353,847

COST OF REVENUES

 

77,143

 

88,797

 

158,617

 

178,123

GROSS PROFIT

 

106,843

 

91,313

 

207,518

 

175,724

OPERATING EXPENSES:

 

  

 

  

 

  

 

  

Research and development

 

23,507

 

21,741

 

47,185

 

41,768

Sales and marketing

 

16,045

 

15,290

 

32,381

 

29,413

General and administrative

 

6,059

 

9,306

15,673

 

19,381

Other operating expenses, net

1,130

1,130

Total operating expenses

 

46,741

 

46,337

 

96,369

 

90,562

INCOME FROM OPERATIONS

 

60,102

 

44,976

 

111,149

 

85,162

OTHER INCOME

 

674

 

173

 

1,228

 

770

INCOME BEFORE INCOME TAXES

 

60,776

 

45,149

 

112,377

 

85,932

PROVISION FOR INCOME TAXES

 

4,952

 

3,268

 

10,305

 

4,253

NET INCOME

$

55,824

$

41,881

$

102,072

$

81,679

EARNINGS PER SHARE:

 

  

 

  

 

  

 

  

Basic

$

0.97

$

0.69

$

1.75

$

1.35

Diluted

$

0.96

$

0.68

$

1.72

$

1.33

SHARES USED IN PER SHARE CALCULATION:

 

  

 

  

 

  

 

  

Basic

 

57,731

60,544

58,480

60,366

Diluted

 

58,305

61,466

59,192

61,481

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

(In thousands)

    

2022

    

2021

    

2022

    

2021

Net income

$

55,824

$

41,881

$

102,072

$

81,679

Other comprehensive income (loss), net of tax:

 

  

 

  

 

  

 

  

Foreign currency translation adjustments, net of $0 tax in each of the three and six months ended June 30, 2022 and 2021

(754)

(40)

(1,023)

(58)

Unrealized loss on marketable securities, net of $0 tax in each of the three and six months ended June 30, 2022 and 2021

(1,160)

(331)

(5,341)

(911)

Amortization of defined benefit pension items, net of tax of $0 and $3 in the three and six months ended June 30, 2022, respectively, and $6 and $141 in the three and six months ended June 30, 2021, respectively

23

52

41

(23)

Total other comprehensive loss

 

(1,891)

 

(319)

 

(6,323)

 

(992)

TOTAL COMPREHENSIVE INCOME

$

53,933

$

41,562

$

95,749

$

80,687

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

(In thousands)

    

2022

    

2021

    

2022

    

2021

Common stock

 

Beginning balance

 

$

26

$

29

$

28

$

28

Common stock issued under employee stock plans

 

 

 

 

1

Repurchase of common stock

 

(2)

 

(1)

 

(4)

 

(1)

Ending balance

 

24

 

28

 

24

 

28

 

 

 

 

Additional paid-in capital

 

 

 

 

Beginning balance

 

39,684

 

203,051

 

162,301

 

190,920

Common stock issued under employee stock plans

 

 

 

3,057

 

3,651

Repurchase of common stock

 

(43,363)

 

(26,373)

 

(178,050)

 

(26,373)

Stock-based compensation

 

3,679

 

9,200

 

12,692

 

17,680

Ending balance

 

 

185,878

 

 

185,878

 

 

 

 

Accumulated other comprehensive loss

 

 

 

 

Beginning balance

 

(8,169)

 

(2,836)

 

(3,737)

 

(2,163)

Other comprehensive loss

 

(1,891)

 

(319)

 

(6,323)

 

(992)

Ending balance

 

(10,060)

 

(3,155)

 

(10,060)

 

(3,155)

 

 

 

 

Retained earnings

 

 

 

 

Beginning balance

 

789,032

 

653,579

 

753,440

 

621,626

Net income

 

55,824

 

41,881

 

102,072

 

81,679

Repurchase of common stock

(114,295)

(114,295)

Payment of dividends to stockholders

(10,280)

(7,867)

(20,936)

(15,712)

Ending balance

720,281

687,593

720,281

687,593

Total stockholders’ equity

 

$

710,245

$

870,344

$

710,245

$

870,344

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

POWER INTEGRATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six Months Ended

June 30, 

(In thousands)

    

2022

    

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

Net income

$

102,072

$

81,679

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation

 

17,174

 

15,274

Amortization of intangibles

 

1,328

 

1,905

Loss on disposal of property and equipment

 

1,034

 

38

Stock-based compensation expense

 

12,692

 

17,680

Amortization of premium on marketable securities

 

1,867

 

300

Deferred income taxes

 

(3,282)

 

1,182

Increase in accounts receivable allowance for credit losses

 

259

 

91

Change in operating assets and liabilities:

 

  

 

  

Accounts receivable

 

13,154

 

(5,533)

Inventories

 

(11,992)

 

13,235

Prepaid expenses and other assets

 

4,075

 

(4,501)

Accounts payable

 

5,577

 

8,053

Taxes payable and accrued liabilities

 

(2,539)

 

(4,433)

Net cash provided by operating activities

 

141,419

 

124,970

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Purchases of property and equipment

 

(27,944)

 

(19,294)

Proceeds from sale of property and equipment

1,202

35

Purchases of marketable securities

 

(20,710)

 

(188,753)

Proceeds from sales and maturities of marketable securities

 

125,527

 

160,083

Net cash provided by (used in) investing activities

 

78,075

 

(47,929)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Issuance of common stock under employee stock plans

 

3,057

 

3,652

Repurchase of common stock

 

(292,349)

 

(26,374)

Payments of dividends to stockholders

 

(20,936)

 

(15,712)

Net cash used in financing activities

 

(310,228)

 

(38,434)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(90,734)

 

38,607

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

158,117

 

258,874

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

67,383

$

297,481

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

  

 

Unpaid property and equipment

$

2,984

$

5,070

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

Cash paid for income taxes, net

$

14,657

$

10,084

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION:

The condensed consolidated financial statements include the accounts of Power Integrations, Inc., a Delaware corporation (the “Company”), and its wholly owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

While the financial information furnished is unaudited, the condensed consolidated financial statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair presentation of the results of operations for the interim periods covered and the financial condition of the Company at the date of the interim balance sheet in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The results for interim periods are not necessarily indicative of the results for the entire year. The condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and the notes thereto for the year ended December 31, 2021, included in its Form 10-K filed on February 7, 2022, with the Securities and Exchange Commission.

2. SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS:

Significant Accounting Policies and Estimates

No material changes have been made to the Company’s significant accounting policies disclosed in Note 2, Significant Accounting Policies and Recent Accounting Pronouncements, in its Annual Report on Form 10-K, filed on February 7, 2022, for the year ended December 31, 2021.

Recent Accounting Pronouncements

The Company has considered all recent accounting pronouncements issued, but not yet effective, and does not expect any to have a material effect on the Company’s condensed consolidated financial statements.

3. COMPONENTS OF THE COMPANY’S CONDENSED CONSOLIDATED BALANCE SHEETS:

Accounts Receivable

    

June 30, 

    

December 31, 

(In thousands)

2022

2021

Accounts receivable trade

$

92,444

$

87,503

Allowance for ship and debit

 

(59,974)

 

(41,599)

Allowance for stock rotation and rebate

 

(3,786)

 

(4,066)

Allowance for credit losses

(704)

(445)

Total

$

27,980

$

41,393

The Company maintains an allowance for estimated credit losses resulting from the inability of customers to make required payments. This allowance is established using estimates formulated by the Company’s management based upon factors such as the composition of the accounts receivable aging, historical losses, changes in payment patterns, customer creditworthiness and current economic trends. Receivables determined to be uncollectible are written off and deducted from the allowance.

Three Months Ended

Six Months Ended

June 30, 

June 30, 

(In thousands)

2022

    

2021

 

2022

    

2021

Beginning balance

$

(520)

$

(425)

$

(445)

$

(427)

Provision for credit loss expense

 

(218)

 

(360)

 

(618)

 

(577)

Receivables written off

 

 

 

 

Recoveries collected

 

34

 

267

 

359

 

486

Ending balance

$

(704)

$

(518)

$

(704)

$

(518)

9

Table of Contents

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories

    

June 30, 

    

December 31, 

(In thousands)

2022

2021

Raw materials

$

38,824

$

24,131

Work-in-process

 

22,357

 

31,788

Finished goods

 

50,077

 

43,347

Total

$

111,258

$

99,266

Intangible Assets

June 30, 2022

December 31, 2021

    

    

Accumulated

    

    

    

Accumulated

    

(In thousands)

Gross

Amortization

Net

Gross

Amortization

Net

Domain name

$

1,261

$

$

1,261

$

1,261

$

$

1,261

Developed technology

 

37,960

 

(32,567)

 

5,393

 

37,960

 

(31,603)

 

6,357

Customer relationships

 

16,700

 

(16,700)

 

 

16,700

 

(16,458)

 

242

Technology licenses

 

1,926

 

(896)

 

1,030

 

1,926

 

(774)

 

1,152

Total intangible assets

$

57,847

$

(50,163)

$

7,684

$

57,847

$

(48,835)

$

9,012

The estimated future amortization expense related to finite-lived intangible assets at June 30, 2022, is as follows:

    

Estimated 

Amortization

Fiscal Year

(In thousands)

2022 (remaining six months)

$

1,087

2023

 

2,173

2024

 

1,279

2025

 

832

2026

 

687

Thereafter

 

365

Total

$

6,423

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the three and six months ended June 30, 2022 and 2021, were as follows:

Unrealized Gains

and Losses on

Defined Benefit

Foreign Currency

Marketable Securities

Pension Items

Items

Total

Three Months Ended

Three Months Ended

Three Months Ended

Three Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

(In thousands)

2022

    

2021

    

2022

    

2021

    

2022

    

2021

    

2022

    

2021

Beginning balance

$

(5,346)

$

310

$

(656)

$

(1,716)

$

(2,167)

$

(1,430)

$

(8,169)

$

(2,836)

Other comprehensive income (loss) before reclassifications

 

(1,160)

 

(331)

 

 

 

(754)

 

(40)

 

(1,914)

 

(371)

Amounts reclassified from accumulated other comprehensive loss

 

 

 

23

(1)

 

52

(1)

 

 

 

23

 

52

Net-current period other comprehensive income (loss)

 

(1,160)

 

(331)

 

23

 

52

 

(754)

 

(40)

 

(1,891)

 

(319)

Ending balance

$

(6,506)

$

(21)

$

(633)

$

(1,664)

$

(2,921)

$

(1,470)

$

(10,060)

$

(3,155)

(1)This component of accumulated other comprehensive income (loss) is included in the computation of net periodic pension cost for the three months ended June 30, 2022 and 2021.

10

Table of Contents

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Unrealized Gains

and Losses on

Defined Benefit

Foreign Currency

Marketable Securities

Pension Items

Items

Total

Six Months Ended

Six Months Ended

Six Months Ended

Six Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

(In thousands)

2022

    

2021

    

2022

2021

    

2022

    

2021

    

2022

    

2021

Beginning balance

$

(1,165)

$

890

$

(674)

$

(1,641)

$

(1,898)

$

(1,412)

$

(3,737)

$

(2,163)

Other comprehensive income (loss) before reclassifications

 

(5,341)

 

(911)

 

 

 

(1,023)

 

(58)

 

(6,364)

 

(969)

Amounts reclassified from accumulated other comprehensive loss

 

 

 

41

(1)

 

(23)

(1)

 

 

 

41

 

(23)

Net-current period other comprehensive income (loss)

 

(5,341)

 

(911)

 

41

 

(23)

 

(1,023)

 

(58)

 

(6,323)

 

(992)

Ending balance

$

(6,506)

$

(21)

$

(633)

$

(1,664)

$

(2,921)

$

(1,470)

$

(10,060)

$

(3,155)

(1)This component of accumulated other comprehensive income (loss) is included in the computation of net periodic pension cost for the six months ended June 30, 2022 and 2021.

4. FAIR VALUE MEASUREMENTS:

The FASB established a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices for identical assets in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The Company’s cash equivalents and short-term marketable securities are classified within Level 1 or Level 2 of the fair-value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

The fair-value hierarchy of the Company’s cash equivalents and marketable securities at June 30, 2022 and December 31, 2021, was as follows:

Fair Value Measurement at

June 30, 2022

    

    

Quoted Prices in

    

Active Markets for

Significant Other

Identical Assets

Observable Inputs

(In thousands)

Total Fair Value

(Level 1)

(Level 2)

Commercial paper

$

8,795

$

$

8,795

Corporate securities

260,209

260,209

Money market funds

 

4,040

 

4,040

 

Total

$

273,044

$

4,040

$

269,004

Fair Value Measurement at

December 31, 2021

    

    

Quoted Prices in

    

Active Markets for

Significant Other

Identical Assets

Observable Inputs

(In thousands)

Total Fair Value

(Level 1)

(Level 2)

Commercial paper

$

172,237

$

$

172,237

Corporate securities

282,540

282,540

Money market funds

 

29,793

 

29,793

 

Total

$

484,570

$

29,793

$

454,777

11

Table of Contents

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company did not transfer any investments between Level 1 and Level 2 of the fair-value hierarchy in the six months ended June 30, 2022 and the twelve months ended December 31, 2021.

5. MARKETABLE SECURITIES:

Amortized cost and estimated fair market value of marketable securities classified as available-for-sale (excluding cash equivalents) at June 30, 2022, were as follows:

Amortized

Gross Unrealized

Estimated Fair

(In thousands)

    

Cost

    

Gains

    

Losses

    

Market Value

Investments due in 3 months or less:

 

  

 

  

 

  

 

  

Corporate securities

$

6,316

$

$

(14)

$

6,302

Total

 

6,316

 

 

(14)

 

6,302

Investments due in 4-12 months:

 

  

 

  

 

  

 

  

Corporate securities

 

113,048

 

 

(2,253)

 

110,795

Total

 

113,048

 

 

(2,253)

 

110,795

Investments due in 12 months or greater:

 

  

 

  

 

  

 

  

Corporate securities