10-Q 1 powi-20210930x10q.htm 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 September 30, 2021

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 October 25, 2021

Common Stock, $0.001 par value

60,331,685

POWER INTEGRATIONS, INC.

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020 (Unaudited)

4

Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

5

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

6

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020 (Unaudited)

7

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 (Unaudited)

8

Notes to Unaudited Condensed Consolidated Financial Statements

9

Item 2.

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

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30

Item 4.

Controls and Procedures

31

PART II. OTHER INFORMATION

31

Item 1.

Legal Proceedings

31

Item 1A.

Risk Factors

31

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 6.

Exhibits

33

SIGNATURES

35

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 Form 10-Q. These factors include, but are not limited to: the novel coronavirus pandemic (COVID-19), which has disrupted and may again 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, 2020, 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 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)

    

September 30, 2021

    

December 31, 2020

ASSETS

 

  

 

  

 

CURRENT ASSETS:

 

 

  

 

Cash and cash equivalents

$

262,435

$

258,874

Short-term marketable securities

 

286,506

 

190,318

Accounts receivable, net

 

38,872

 

35,910

Inventories

 

91,814

 

102,878

Prepaid expenses and other current assets

 

23,720

 

13,252

Total current assets

 

703,347

 

601,232

PROPERTY AND EQUIPMENT, net

 

168,498

 

166,188

INTANGIBLE ASSETS, net

 

9,807

 

12,506

GOODWILL

 

91,849

 

91,849

DEFERRED TAX ASSETS

 

3,266

 

3,339

OTHER ASSETS

 

28,223

 

28,225

Total assets

$

1,004,990

$

903,339

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

CURRENT LIABILITIES:

 

 

Accounts payable

$

40,390

$

34,712

Accrued payroll and related expenses

 

14,064

 

14,806

Taxes payable

 

970

 

902

Other accrued liabilities

 

10,638

 

12,106

Total current liabilities

 

66,062

 

62,526

LONG-TERM INCOME TAXES PAYABLE

 

14,644

 

15,588

OTHER LIABILITIES

 

15,928

 

14,814

Total liabilities

 

96,634

 

92,928

COMMITMENTS AND CONTINGENCIES (Notes 11, 12 and 13)

 

  

 

  

STOCKHOLDERS’ EQUITY:

 

  

 

  

Common stock

 

28

 

28

Additional paid-in capital

 

189,790

 

190,920

Accumulated other comprehensive loss

 

(3,249)

 

(2,163)

Retained earnings

 

721,787

 

621,626

Total stockholders’ equity

 

908,356

 

810,411

Total liabilities and stockholders’ equity

$

1,004,990

$

903,339

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

Nine Months Ended

    

September 30, 

September 30, 

  

(In thousands, except per share amounts)

2021

    

2020

    

2021

    

2020

NET REVENUES

$

176,776

$

121,129

$

530,623

$

337,625

COST OF REVENUES

 

85,037

 

61,560

 

263,160

 

168,040

GROSS PROFIT

 

91,739

 

59,569

 

267,463

 

169,585

OPERATING EXPENSES:

 

  

 

  

 

  

 

  

Research and development

 

21,137

 

20,868

 

62,905

 

59,790

Sales and marketing

 

15,624

 

13,658

 

45,037

 

40,168

General and administrative

 

9,386

 

10,302

28,767

 

26,867

Total operating expenses

 

46,147

 

44,828

 

136,709

 

126,825

INCOME FROM OPERATIONS

 

45,592

 

14,741

 

130,754

 

42,760

OTHER INCOME

 

206

 

877

 

976

 

4,134

INCOME BEFORE INCOME TAXES

 

45,798

 

15,618

 

131,730

 

46,894

PROVISION FOR INCOME TAXES

 

3,764

 

798

 

8,017

 

2,996

NET INCOME

$

42,034

$

14,820

$

123,713

$

43,898

EARNINGS PER SHARE:

 

  

 

  

 

  

 

  

Basic

$

0.70

$

0.25

$

2.05

$

0.74

Diluted

$

0.69

$

0.24

$

2.01

$

0.72

SHARES USED IN PER SHARE CALCULATION:

 

  

 

  

 

  

 

  

Basic

 

60,319

59,823

60,350

59,582

Diluted

 

61,363

60,852

61,466

60,668

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

Nine Months Ended

September 30, 

September 30, 

(In thousands)

    

2021

    

2020

    

2021

    

2020

  

Net income

$

42,034

$

14,820

$

123,713

$

43,898

Other comprehensive income (loss), net of tax:

 

  

 

  

 

  

 

  

Foreign currency translation adjustments, net of $0 tax in each of the three and nine months ended September 30, 2021 and 2020

(154)

(51)

(212)

(364)

Unrealized gain (loss) on marketable securities, net of $0 tax in each of the three and nine months ended September 30, 2021 and 2020

7

(633)

(904)

981

Amortization of defined benefit pension items, net of tax of $6 and $147 in the three and nine months ended September 30, 2021, respectively, and $37 and $92 in the three and nine months ended September 30, 2020, respectively

53

49

30

158

Total other comprehensive income (loss)

 

(94)

 

(635)

 

(1,086)

 

775

TOTAL COMPREHENSIVE INCOME

$

41,940

$

14,185

$

122,627

$

44,673

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

Nine Months Ended

September 30, 

September 30, 

(In thousands)

    

2021

    

2020

    

2021

    

2020

Common stock

 

Beginning balance

 

$

28

$

28

$

28

$

28

Common stock issued under employee stock plans

 

 

 

1

 

Repurchase of common stock

 

 

 

(1)

 

Ending balance

 

28

 

28

 

28

 

28

 

 

 

 

Additional paid-in capital

 

 

 

 

Beginning balance

 

185,878

 

168,470

 

190,920

 

152,117

Common stock issued under employee stock plans

 

4,058

 

3,364

 

7,709

 

9,662

Repurchase of common stock

 

(9,791)

 

 

(36,164)

 

(2,636)

Stock-based compensation

 

9,645

 

9,358

 

27,325

 

22,049

Ending balance

 

189,790

 

181,192

 

189,790

 

181,192

 

 

 

 

Accumulated other comprehensive loss

 

 

 

 

Beginning balance

 

(3,155)

 

(1,720)

 

(2,163)

 

(3,130)

Other comprehensive income (loss)

 

(94)

 

(635)

 

(1,086)

 

775

Ending balance

 

(3,249)

 

(2,355)

 

(3,249)

 

(2,355)

 

 

 

 

Retained earnings

 

 

 

 

Beginning balance

 

687,593

 

592,694

 

621,626

 

575,531

Net income

 

42,034

 

14,820

 

123,713

 

43,898

Payment of dividends to stockholders

(7,840)

(6,582)

(23,552)

(18,497)

Ending balance

721,787

600,932

721,787

600,932

Total stockholders’ equity

 

$

908,356

$

779,797

$

908,356

$

779,797

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)

Nine Months Ended

September 30, 

(In thousands)

    

2021

    

2020

  

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

 

Net income

$

123,713

$

43,898

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

 

 

Depreciation

 

23,400

 

17,071

Amortization of intangibles

 

2,699

 

3,283

Loss on disposal of property and equipment

 

2,200

 

311

Stock-based compensation expense

 

27,325

 

22,049

Amortization of premium on marketable securities

 

775

 

525

Deferred income taxes

 

(12)

 

100

Increase in accounts receivable allowance for credit losses

 

17

 

155

Change in operating assets and liabilities:

 

  

 

Accounts receivable

 

(2,979)

 

(5,328)

Inventories

 

11,064

 

(14,425)

Prepaid expenses and other assets

 

(4,973)

 

6,133

Accounts payable

 

6,633

 

6,365

Taxes payable and accrued liabilities

 

(6,157)

 

(864)

Net cash provided by operating activities

 

183,705

 

79,273

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Purchases of property and equipment

 

(30,305)

 

(35,738)

Proceeds from sale of property and equipment

35

331

Purchases of marketable securities

 

(381,903)

 

(66,066)

Proceeds from sales and maturities of marketable securities

 

284,036

 

86,995

Net cash used in investing activities

 

(128,137)

 

(14,478)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Issuance of common stock under employee stock plans

 

7,710

 

9,662

Repurchase of common stock

 

(36,165)

 

(2,636)

Payments of dividends to stockholders

 

(23,552)

 

(18,497)

Net cash used in financing activities

 

(52,007)

 

(11,471)

NET INCREASE IN CASH AND CASH EQUIVALENTS

 

3,561

 

53,324

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

258,874

 

178,690

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

262,435

$

232,014

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

  

 

Unpaid property and equipment

$

4,983

$

14,180

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

Cash paid (received) for income taxes, net

$

16,272

$

(1,927)

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, 2020, included in its Form 10-K filed on February 5, 2021, 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 5, 2021, for the year ended December 31, 2020.

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

    

September 30, 

    

December 31, 

(In thousands)

2021

2020

Accounts receivable trade

$

91,299

$

66,703

Allowance for ship and debit

 

(46,056)

 

(26,435)

Allowance for stock rotation and rebate

 

(5,927)

 

(3,931)

Allowance for credit losses

(444)

(427)

Total

$

38,872

$

35,910

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 payments patterns, customer creditworthiness, and current economic trends. Receivables determined to be uncollectible are written off and deducted from the allowance.

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

(In thousands)

2021

    

2020

 

2021

    

2020

Beginning balance

$

(518)

$

(609)

$

(427)

$

(763)

Provision for credit loss expense

 

(325)

 

(309)

 

(902)

 

(309)

Receivables written off

 

74

 

 

74

 

154

Recoveries collected

 

325

 

 

811

 

Ending balance

$

(444)

$

(918)

$

(444)

$

(918)

9

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POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Inventories

    

September 30, 

    

December 31, 

(In thousands)

2021

2020

Raw materials

$

27,087

$

32,131

Work-in-process

 

36,338

 

39,469

Finished goods

 

28,389

 

31,278

Total

$

91,814

$

102,878

Intangible Assets

September 30, 2021

December 31, 2020

    

    

Accumulated

    

    

    

Accumulated

    

(In thousands)

Gross

Amortization

Net

Gross

Amortization

Net

Domain name

$

1,261

$

$

1,261

$

1,261

$

$

1,261

Developed technology

 

37,960

 

(31,051)

 

6,909

 

37,960

 

(29,126)

 

8,834

Customer relationships

 

16,700

 

(16,277)

 

423

 

16,700

 

(15,687)

 

1,013

Technology licenses

 

1,926

 

(712)

 

1,214

 

1,926

 

(528)

 

1,398

Total intangible assets

$

57,847

$

(48,040)

$

9,807

$

57,847

$

(45,341)

$

12,506

The estimated future amortization expense related to finite-lived intangible assets at September 30, 2021, is as follows:

    

Estimated 

Amortization

Fiscal Year

(In thousands)

2021 (remaining three months)

$

795

2022

 

2,415

2023

 

2,173

2024

 

1,279

2025

 

832

Thereafter

 

1,052

Total

$

8,546

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss for the three and nine months ended September 30, 2021 and 2020, 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

September 30, 

September 30, 

September 30, 

September 30, 

(In thousands)

2021

    

2020

    

2021

    

2020

    

2021

    

2020

    

2021

    

2020

Beginning balance

$

(21)

$

2,197

$

(1,664)

$

(2,375)

$

(1,470)

$

(1,542)

$

(3,155)

$

(1,720)

Other comprehensive income (loss) before reclassifications

 

7

 

(633)

 

 

 

(154)

 

(51)

 

(147)

 

(684)

Amounts reclassified from accumulated other comprehensive loss

 

 

 

53

(1)

 

49

(1)

 

 

 

53

 

49

Net-current period other comprehensive income (loss)

 

7

 

(633)

 

53

 

49

 

(154)

 

(51)

 

(94)

 

(635)

Ending balance

$

(14)

$

1,564

$

(1,611)

$

(2,326)

$

(1,624)

$

(1,593)

$

(3,249)

$

(2,355)

(1)This component of accumulated other comprehensive income (loss) is included in the computation of net periodic pension cost for the three months ended September 30, 2021 and 2020.

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

Nine Months Ended

Nine Months Ended

Nine Months Ended

Nine Months Ended

September 30, 

September 30, 

September 30, 

September 30, 

(In thousands)

2021

    

2020

    

2021

2020

    

2021

    

2020

    

2021

    

2020

Beginning balance

$

890

$

583

$

(1,641)

$

(2,484)

$

(1,412)

$

(1,229)

$

(2,163)

$

(3,130)

Other comprehensive income (loss) before reclassifications

 

(904)

 

981

 

 

 

(212)

 

(364)

 

(1,116)

 

617

Amounts reclassified from accumulated other comprehensive loss

 

 

 

30

(1)

 

158

(1)

 

 

 

30

 

158

Net-current period other comprehensive income (loss)

 

(904)

 

981

 

30

 

158

 

(212)

 

(364)

 

(1,086)

 

775

Ending balance

$

(14)

$

1,564

$

(1,611)

$

(2,326)

$

(1,624)

$

(1,593)

$

(3,249)

$

(2,355)

(1)This component of accumulated other comprehensive income (loss) is included in the computation of net periodic pension cost for the nine months ended September 30, 2021 and 2020.

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 September 30, 2021, and December 31, 2020, was as follows:

Fair Value Measurement at

September 30, 2021

    

    

Quoted Prices in

    

Active Markets for

Significant Other

Identical Assets

Observable Inputs

(In thousands)

Total Fair Value

(Level 1)

(Level 2)

Commercial paper

$

282,192

$

$

282,192

Corporate securities

178,067

178,067

Money market funds

 

22,028

 

22,028

 

Total

$

482,287

$

22,028

$

460,259

11

Table of Contents

POWER INTEGRATIONS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value Measurement at

December 31, 2020

    

    

Quoted Prices in

    

Active Markets for

Significant Other

Identical Assets

Observable Inputs

(In thousands)

Total Fair Value

(Level 1)

(Level 2)

Commercial paper

253,855

$

253,855

Corporate securities

146,658

146,658

Money market funds

 

1,634

 

1,634

 

Total

$

402,147

$

1,634

$

400,513

The Company did not transfer any investments between Level 1 and Level 2 of the fair-value hierarchy in the nine months ended September 30, 2021, and the twelve months ended December 31, 2020.

5. MARKETABLE SECURITIES:

Amortized cost and estimated fair market value of marketable securities classified as available-for-sale (excluding cash equivalents) at September 30, 2021, were as follows: