MANHASSET, N.Y. Semiconductor supplier Power Integrations faces delisting from the Nasdaq exchange after stating it does not expect to update its SEC filings by the previously announced deadline of Aug. 2, 2006.
The delisting marks the latest chapter in a tumultuous year for Power Integrations (San Jose, Calif.), which expects to delay filing its financials beyond the deadline.
In March, Power Integrations said it would delay filing its fiscal 2005 report
with the Securities and Exchange Commission because of an ongoing internal investigation regarding the company's stock option practices.
The fallout from the investigation led to a management shakeout
, with the company's chairman and chief financial officer resigning in May.
Under Nasdaq Rule 4802(b), the Nasdaq Listing Qualifications Panel is prohibited from allowing the company to remain listed for more than 90 days beyond the Panel's original decision to grant the company a listing extension.
The company expects its shares to begin trading on the Pink Sheets beginning on Aug. 2, under the symbol POWI.PK. The company's shares are currently quoted on the Pink Sheets by two market makers, and additional market makers can immediately begin entering quotes.
"We are disappointed that for reasons largely beyond our control, we will not be able to regain compliance with Nasdaq rules in time to avoid delisting," said Balu Balakrishnan, president and chief executive of Power Integrations, in a statement. "We have made every effort to restate our financials and file the necessary reports on a timely basis.
The company did release preliminary second-quarter results. Power Integrations said its second-quarter revenue $41.5 million, up 17 percent compared to the prior quarter and the year-ago quarter. Revenue for the quarter included a net benefit of $2.7 million from the settlement of prior-period ship-and-debit claims with two of the company's distributors.
Operating expenses for the second quarter included approximately $4 million related to the company's internal investigation regarding practices for granting stock options, as well as the related restatement of the company's historical financial statements. Also included were $0.8 million in expenses related to the company's patent litigation against Fairchild Semiconductor
and System General Corp.
Cash and investments as of June 30 totaled $124.7 million, down $14.4 million from the prior quarter due primarily to share repurchases. During the second quarter, the company repurchased 1.1 million shares for a total of $19.2 million, completing the $25 million share-repurchase program announced in Oct. 2005. As of June 30, the company had 28.6 million common shares outstanding, a net decrease of 2.2 million shares over the past two years.
The company anticipates third-quarter sales of $42 million to $44 million. Patent-litigation expenses are expected to total approximately $3 million in the second half of 2006. The company also expects to continue to incur expenses related to the pending restatement of its historical financial statements.