Good afternoon. My name is Candice and I'll be your conference operator today. At this time I would like to welcome everyone to the Power Integrations' Fourth Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Joe Shiffler, Director of Investor Relations, you may begin your conference.

Thank you. Good afternoon. Thanks for joining us to discuss Power Integrations' financial results for the fourth quarter of 2013. With me on the call are Balu Balakrishnan, President and CEO of Power Integrations; and Sandeep Nayyar, our Chief Financial Officer. During today's call, we will refer to financial measures not calculated according to Generally Accepted Accounting Principles. Please refer to today's press release available on our website at investors.powerint.com for an explanation of our reasons for using such non-GAAP measures, as well as tables reconciling these measures to our GAAP results. Also, our discussion, including the Q&A session, will include forward-looking statements reflecting management's current forecast of certain aspects of the company's future business. Forward-looking statements are denoted by such words as will, would, believe, should, expect, outlook, estimate, plan, goal, anticipate, project, potential, forecast and similar expressions that look towards future events or performance. Forward-looking statements are based on current information that is, by its nature, dynamic and subject to rapid and even abrupt changes. Our forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those projected or implied in our statements. Such risks and uncertainties are discussed in today's press release and under the caption Item 1A Risk Factors in Part 2 of our most recent 10-Q filed with the SEC on November 1, 2013. This conference call is the property of Power Integrations and any recording or rebroadcast of this conference call is expressly prohibited without the written consent of Power Integrations. And now I'll turn the call over to Balu.

Thanks, Joe, and good afternoon. We finished 2013 with a strong quarter, posting revenues of $90.4 million, up 14% from a year ago. For the full year, revenues were $347.1 million also a 14% increase. Had the CT-Concept acquisition being included in our results for the entire year of 2012, our growth in 2013 would still have been over 10%, well ahead of the 2% growth rate for the analogue semiconductor industry. Since 2006, our total revenues have grown at a compound annual rate of better than 11% or about 10% organically, compared to an industry growth rate in the low single digits. 2013 was also an outstanding year in terms of profitability and cash flow. We earned $0.66 per share on a non-GAAP basis in the fourth quarter, bringing our full year EPS to $2.46, up 37% from 2012. Our gross margin was a key driver of the earnings growth, rising more than two percentage points in 2013, thanks to cost reduction and more favorable yen-dollar exchange rate and strong growth in higher margin markets like industrial and appliances. We generated $99 million of cash flow from operations during the year and added more than $100 million of cash in investments to our balance sheet. As announced last quarter, our Board of Directors has increased our quarterly dividend by 25% to $0.10 per share effective in the current quarter. This reflects the strength of our balance sheet and our multifaceted approach to shareholder returns, which has included a mix of internal investment, strategic transaction, opportunistic stock buyback and a modest but growing dividend. Our strong results in 2013 and our track record of outperforming the peer group, reflect an unwavering focus on our core competency of high voltage power conversion. We continue to gain share within our traditional low…

Thank you, and good afternoon. I'll quickly review the fourth quarter financials and the outlook and then we will take your questions. In my remarks, I'll focus primarily on the non-GAAP numbers, which are reconciled to the corresponding GAAP numbers in the tables accompanying our press release. Our fourth quarter revenues were $90.4 million, down 1% sequentially. Revenues from the consumer, industrial and communication end markets, showed modest sequential decline, while sales into the computer market increased on growth in desktop applications, primarily driven by further penetration of main power supply applications. Revenue mix was similar to the prior quarter with industrial and consumer at 34% of revenue each, communication at 21% and computer at 11%. Distributors accounted for 76% of total sales in the quarter, while direct sales were 24%. Non-GAAP gross margin for the quarter was 54.5%, up 30 basis points sequentially, due to the more favorable dollar-yen exchange rate, which has improved the cost of wafers from our Japanese foundries. Non-GAAP gross margin for the year was 53.8%, up 220 basis points from 2012, driven partly by the yen, but also a more favorable end market mix. We are modeling a slight lower gross margin for 2014, based on our expectation of growth in the cell phone charger market, where margin seems to be lower than average, as well as the contribution from new products, which tend to have a short term effect on gross margin as we look optimize production cost. Nevertheless, we expect growth in gross profit dollars to produce leverage on the operating margin line. Non-GAAP operating expenses for the fourth quarter were $28 million, coming in at the lower end of our forecasted range. That resulted in a non-GAAP operating margin of 23.5%, up nearly three percentage points from a year ago on…

Thanks, Sandeep. We'll open it now for our Q&A session and in the interest of time we’ll take two questions per caller -- two questions each per caller, but if we do have additional time, we’ll be happy to come around for an additional around of follow-up. Operator, would you please now give the instructions for the Q&A session?

[Operator Instructions] And your first question comes from Tore Svanberg with Stifel. Your line is now open.

Thank you and congratulations on a very strong year. My first question has to do with backlog and visibility, I was hoping you can comment a little bit on sort of your bookings linearity and where you stand from a backlog coverage right now?

So the backlog for the last quarter continues to be relatively strong especially as the quarter progressed and the guidance that we are giving for this quarter is in line, but turns that we had turned out to be about roughly 50%, even though as you know in our case revenue just total doesn’t depend because we are on sell-through and the turns we are kind of expecting is on the midpoint of the guidance is somewhere around the mid 40s.

Yes, just to clarify, the turns of days on shipment and we won’t know the sell-through until it happens, so it's not a very good indicator, but we did have a stronger backlog at the beginning of the quarter, this quarter by about 10% compared to the last quarter, so a turns requirement this quarter is lower.

That’s very helpful. And as my follow-up, Balu you mentioned you expect to be in production in the fast charger market by mid-year. I was hoping you could maybe elaborate a little bit more on that. Should we expect this to be with multiple OEMs or should it be sort of steady a little bit in the beginning and then more ramps into '15, just trying to understand the degree of the design win?

Sure. We had three design wins in the quarter. Two of them were based on QC the Quick Charge. The other one was a rapid charger, but doesn’t use any protocol, it just uses higher current. And those will start preproduction in Q2, the rapid charger without QC is actually a pretty high volume customer and all three of those customers are well known names that you would recognize and so we expect some revenue in Q2 and then the second half is where you’ll see meaningful revenue from past or that we call rapid charging market.

Very helpful. Thank you very much.

You're welcome.

Your next question comes from Ross Seymore with Deutsche Bank. Your line is now open.

Hi, guys. Also want to pass my congrats on a very strong year. As far as the base line off of which we should build some of these quick charger, rapid charge opportunities, can you give us a little color on what percentage of your total sales handsets represented in this last year and how we should think about what they could go through this year?

The cell phone business is still the -- is about roughly around 11% of our total revenue.

Great. And then the trajectory I think you pretty much answered with Tore. How do we think about, Sandeep you talked about the negative mix implication on the gross margin, but the leverage on the OpEx side. Can you give us a little bit more color about how both of those two fit into, what we should be thinking about for 2014?

As I had indicated in my results with the new product introduction, there is a lot of variables from a margin standpoint, we have not only the new products, but you got the mix, the yen. At a high level right now for modeling purposes, we just think that for the year the -- based on what we can see right now, the margin will come down roughly at around approximately 50 basis point on a fully basis from where it is and obviously the expenses will grow, but this is what we are going to mange as the year progresses as the -- how the year turns out and that’s where we believe the leverage will come.

Great. And one last housekeeping question quickly, what are your expectation for CapEx for the year?

As we saw that this year the CapEx was a little bit below. Typically we run at about $20 million. We did about $14 million. Next year, we are making some additional investments in IT infrastructure in a little bit in capacity. So we expect to spend somewhere around about $20 million to $27 million, but if you take the average of the two years, it will come to somewhere around this $20 million, but next year's projection is between $25 million and $47 million.

Yes. To clarify he meant -- next year, I think…

I mean 2013.

Yeah. The 2012 was below normal. We normally do about $20 million in CapEx, but we only did about $14 million in 2012.

'13 -- in 2013.

2013, sorry, I’m doing it now. The 2013 was unusually low. So 2014 this year it will be higher because of some of the IT investments we are doing.

Got it. Thank you.

Your next question comes from Vernon Essi with Needham & Company. Your line is now open. Vernon Essi - Needham & Company: Thank you very much. And I just wanted to follow on, I guess, Ross' wound up questioning there on the gross margin for clarification, you said that you’re expecting about a 50 basis point year-over-year decline, was that how you characterize that?

On an annualized basis, approximately and obviously that could vary depending on what happens with the new products and mix and yen, but that's our high level modeling right now. Vernon Essi - Needham & Company: Okay. And your competitor are one of the more vocal competitors in the sort of rapid charger arena suggested that this was going to a pretty much a very wide spread capability, in fact, the expectation was sort of a [praetor] thing where 80% of these chargers would have this capability probably by the end of 2015. Do you think given the design wins that you have and discussions with the vendors that are out there, that, that seems to be kind of the direction this is heading or is it still -- are you still sort of in a wait and see mode with how the adoption rate might turn out for that market?

Well, I think it is safe to say, the rapid charging is going to be used in a broad sense in the smartphones going forward. The real question is, how many of them will use a special protocol to vary the voltage and how many of them will just increase the current and go up to about 10 watts. 10 watts is about the maximum you can go without changing the voltage. Just as a reference, the older phones or existing phones use a 5-watt charger. So going to 10 watts will speed up the charging by a pack of two but you want to go more than 10 watts, than you have to use some kind of a protocol whether it’s Quick Charge protocol from Qualcomm or some other protocol. So, in terms of where the market is going. I would agree that pretty much most of the smartphone in the future will use 10 watts or higher. But exactly what protocol would they use for more than 10 watts, we don’t yet. We think QC is the best protocol. It is a least expensive. It’s simple, takes very few components, especially with our solution and so, we are optimistic that QC will become very prevalent. Now, when you go to tablet and go to ultrabook and notebooks, than you really don’t have much of a choice. You really have to go to some kind of protocol if you want to be compatible with a USB type of connector. So in those cases, I think a large number of them, maybe all of them would go to either a QC protocol or they have to go to a dedicated charger with a hard wired wire without any connectors. So as soon as you put a USB you have to be backward compatible and so you have to have some protocol to make sure that it is backward compatible. Vernon Essi - Needham & Company: Okay. Thanks for your clarification on that. I just sort of a completely shifting gears topic here, a lot of press recently on smaller batteries and rechargeable batteries throughout the marketplace, some notion that there’s going to be standardized wireless charging and induction, what is sort of your take on the discussion around that with OEMs in the portable or mobile space that are designing some of these and I would think that the energy efficiency benchmarks would make these prohibitive, but are you seeing any developments that may change that or how that might impact your business over the next couple of years?

Yes. We are following a number of wireless charging activities that are happening all around the world. The big challenge is efficiency, most of the wireless chargers -- wireless charging systems have an efficiency that's in the 30% to 50% range, which is as bad as linear transformers if you can remember that going back a few years. So the California Energy Commission is not at all thrilled about going backwards on energy efficiency. Having said that, there has been some improvements, the energy efficiency is gradually improving and depending upon how quickly or how many people like to use wireless charging, the good possibility that wireless charging will become prevalent, as far as impact on us, it's really we are very orthogonal to whether to use wireless charging or not because if you use a wireless charging pad, you still need a power supply to power it. And it turns out that a quick charge protocol is ideal for that kind of an application and the chances are if the wireless charging becomes prevalent there will be lot more charges sold than less and the reason for that is you may have a wireless charger at home and one at work and may be even the hotels will install it in their rooms once it becomes paradise, so that means you'll have a huge number of installations for the first two, three years, but on top of that you still can't take the chance of assuming that wherever you are going you'll have a wireless charger. You'll have to take your regular charger with you. So there will be actually more chargers we believe if the wireless charging becomes a practical solution. Vernon Essi - Needham & Company: Okay. Thanks a lot Balu and great quarter.

Thank you, Vernon.

And your next question comes from Andrew Huang with Sterne Agee. Your line is now open.

Thanks. I wanted to switch gears for a little bit and switch over to CT-Concept, so can you share with us your thoughts on CT-Concept for the full year for 2014 and what kind of visibility you have on kind of those large infrastructure projects and is there a chance we are going to see some growth in the first half of this year?

We are not going to split out revenue of CT-Concept, but we've given you lot of indications. They grew very close to 40% in revenue last year versus 2012. So that should give you a pretty good indication. And in terms of visibility, they are doing very well in China driven by the energy efficiency initiatives particularly in medium voltage motor drives for industrial applications, but also in wind turbines and also solar inverters. In addition to that, in China there is lot of work going on in locomotives. They are building a lot of locomotives that they are designed into.

Okay.

And definitely our -- now just because they did 40% in 2013, we are not expecting them to do 40% growth this year. In fact, I don't think they will. The reason they did so well is that they were coming off of a very soft year in 2012 for industrial applications especially because a lot of the programs in China were held back during the change in management there. And so going forward, again coming back to the future, we are also seeing signs of life in Europe, coming back in renewables and we are seeing a significant activity in U.S. and India on renewables. For the first time in the history in 2013 solar became grid neutral. So the cost of converting energy from solar is equal or less than the cost of energy on the grid, which means that even without subsidies, solar can become very cost effective. There are a number of programs in the U.S. and also in China and India that will be a good area for growth for CT-Concept.

Got it. Okay. And then maybe a power expectation question on the Quick Charge commentary because I think you said you had two design wins in the quarter for Quick Charge and then one was another design win, but not under that protocol. I also think last quarter you had one, so is that a total of four now cumulatively?

Correct.

And the one that you got last quarter was that also for Quick Charge under the QC standard?

That's correct.

Okay. Thank you.

You're welcome.

[Operator instructions] And your next question comes from Steve Smigie with Raymond James. Your line is now open.

Great. Thanks a lot. Balu I think you comment on the LED opportunity and what kind of growth, felt like you said 20% growth last year, but that is accelerating so does that mean we should expect north of 20% this year?

I would think so. I think everything points to this much stronger year this year, but it’s very hard to know what the growth will be.

Okay. And for you guys, you think it’s primarily going to be on the home, the residential lighting market as opposed to maybe the enterprise market?

Well, so far we’ve seen a very good mix of both, but if I look at the design activity and lot of it is on the bulb replacement business because of the rebates that are being given in California and many other states, we are seeing more of that. So it’s possible this year there will be more revenue from the lower end of bulb replacement business, but that doesn’t mean we won’t have design wins in commercial industrial applications. It's just that there will be more revenue growing in the bulb replacement business.

Okay. Going back to the CT-Concept question, okay not expecting 40% growth this year, but could you do 20% in all possibility?

Yes, first of all we really don’t want to talk about CT-Concept separately, but I would say that they should grow nicely but we just don’t know exactly how much.

Okay. Within the computing side, can you talk a little bit about your growth opportunity there this year? And within that, you’ve got a bunch of parts there Hiper stuff, you got SENZero, CAPZero, is there any particular one of those parts that you are wining more of or that you just generally wining -- if you get that main power when you are getting all those parts together or all the way?

Actually those products you just mentioned the Hiper products the CAPZero and SENZero, they grew sequentially more in about what 26% or so sequentially in Q4, so they are doing extremely well. That’s where we have seen the growth that is we are growing into the main PC market, our main power supplier of the PC. We've also increased our share in the PC standby especially in the last three quarters you’ve seen significant growth in PC standby revenue along with the main power supplier revenue.

If you get the win with Hiper device with the main, does that suck out any other parts that you might originally had on that, there was a little bit of cannibalization, overall it seems like the growth could be a lot more, I am just curious about the cannibalization, is this on a diagram you show seem like there is one part there that might get incorporated in?

In some instances the standby power supply is included in the Hiper product but not in all instances. For example if you want to go to Gold or Platinum power supply, the standby is still separate. So, yes, there is a little bit of cannibalization, but I won’t call it cannibalization because the ASP is so much higher is somewhere in the four to five times higher if they use the Hiper, CAPZero and SENZero chips. So it definitely is an increase -- a growth opportunity within computing.

Okay. I’ll just sneak one more. Just on the consumer business, I think a good portion now today is on the appliance side and I think you -- overall that business grew something like 9%, could you see something like 9% growth this year as well?

Again it’s really very difficult to predict. All I would say is we do see growth opportunities in all of our core end markets. Exactly how much each one of them grow you’ll have to wait and see.

Okay. Thank you.

You're welcome.

And your next question comes from [Jon Lopez with Vertical Group]. Your line is now open.

Hi. Thank you very much for taking the question. Excuse me, got all this cold here now. My first question is just on the gross margin to make sure I understand the commentary, just recent where you are starting the year where you get 50 basis points down for the full year does that require you to exit the year something below 53%. Is that what you’re sort of intending to communicate and if it is, is it all related to sort of 10% or 11% year business that’s set us a Quick Charge or there are other things that work there?

Well, so, as I had indicated there are lot of factors that go into this, that is basically the new product ramp, the yen, the mix. So, at this point of time, what I’m trying to is, not point out a particular quarter, I’m trying to see on an annualized basis that’s what it’s going to be, but obviously the ramp in the second quarter of the new products is going to be attributable to it.

Understood. Okay. Secondly, just trying to understand that on Quick Charge a little bit better. I think you guys had major or sort of announced your product that’s commercially available or you were sort of far down the road, maybe in the October, November last year. And I guess what I’m driving at this is -- we’re going to get Mobile World Congress in a couple of weeks that will be pretty full slate of new products introduced. Doesn’t sound like much of that’s going to incorporate Quick Charge 2.0, and I guess I’m wondering why, in other words, just sort of what’s pushing this into the second half of the calendar year when there is a reasonable slate of devices there to launch pretty shortly here?

That’s because you need to charge both the phone and charger to make Quick Charge work. So you have to modify the phone design, which always takes some more time. So you -- my expectation is that you would see products with Quick Charge probably somewhere around the middle of the year. They don’t tell us exactly which products it goes into but that’s just the time it takes to design the system.

Got you. Understood. And I assume now this sync into your competitors; in other words somebody mentioned one of the U.S. guys dialogue who announced a product recently, will that put them sort of a pro rata behind you, in other words two, three months behind you or is the whole thing sort of caught up, so their competitive product now is sort of on the same cadence as yours?

I think we do have a time advantage, because we were so far ahead of everybody else on the QC.

Got you. Got you. Helpful. So I just have two quick ones. The LED market, you commented earlier in 2013 that it was something like 7% or 8% of the total revenue. I’m wondering if you can update us on what the contribution of LED is as a total percentage of the next existing year?

Are you talking about what the total revenue -- LED revenue is?

That's exactly right. Yeah, you commented earlier, LED is a percentage of your total business. And I’m kind of wondering relative to the 7%, 8% stood at earlier in '13 where it stood existing '13?

Yeah. In the four quarter John, I think kind of the higher end to that range is where we existed the year. So, call it high single-digit as a percentage of our…

Got you. Great. Thanks. Very last one, its file within the new ones, but looking at your inventory weeks, as you reference they were down versus the third quarter, but they were up a bit versus the fourth quarter of last year and the fourth quarter of '12 and I’m just sort of wondering is it in a tougher range now in terms of your target weeks or have they crept up versus the same period a year ago for any such degree and did a Quick Charge or anything else. I was wondering if you could just comment on that.

Are you talking about the weeks in the channel, right.

That’s exactly what I’m talking about. Yes.

Yeah. So the weeks -- our lead time for our products are four to six weeks. So it's kind of fluctuate, so 5.5 give and take, I think is at a reasonable level.

Okay. Just to add here, we only recognize revenue on sell-through. So the inventory at our distributors doesn’t make a whole lot of difference to us.

No pro [interested]. Okay. Thanks a lot for your help. I really appreciate it.

Thank you.

And your next question comes from Edison Chu with G2 Investment. Your line is now open.

Hi, this is Josh Goldberg. Congratulations on a strong quarter.

Thank you.

Just two or third quick questions. First is, did you say right that your backlog entered in the quarter was roughly about 10% higher than your backlog entered in the fourth quarter?

That is correct.

Okay. But you’ve guided to in a similar guidance range for the top line?

Yes. And the reason for that is, you have to remember February is a soft month for us because of Chinese New Year. We had to take that into account. Plus in terms of bookings, we had very strong bookings in Q4. It was -- the book-to-bill ratio was slightly above one, and that’s the reason we have the higher backlog, but the bookings were very soft in February.

Okay. And I think last year your computer segment has a difficult Q1 as there was a lot of inventory and how many orders and just wondering obviously with a flattish to slightly -- or flattish to down a little bit in Q1, which segment would you see kind of the most pronounced decline in the first quarter?

Well, we've had a very strong growth in PC market for the last three quarters. And so, we are modeling PC to be slightly lower in Q1. And in addition to that, our revenue from air conditioning market was very strong in Q4, which is somewhat unusual. Usually Q1 is our strongest quarter for air conditioning. So that's another reason we are little bit conservative on air conditioning revenue for this quarter. So those two areas we think will be less than normal this quarter.

And some segments are actually going to be up quarter-over-quarter?

It's very hard to be very predicting very precisely because for us the same part goes into different end applications. So it's very hard for us to predict what it's going to be exactly.

I see, okay. One last one, if I look at your business in '14, it sounds like your Quick Charge opportunity will peak somewhere either in the second or the third quarter with obviously some designing for the holiday season. Is it fair to say that at least on the Quick Charge side that should be -- third quarter would be kind of your peak quarter for that?

Just to be clear, Quick Charge is one of the multiple protocols that are out there. So I would rather talk about broadly as rapid charging that is anything 10 watts and above.

Okay.

That I think will start to ramp in the -- start ramping in Q2 and have production level volumes in Q3 and Q4. But certainly, I don't expect that to be the peak because it will expand into more and more phones over time. It may take two, three years before it broadens into most of the smartphones. Because what normally happens is they try these new protocols on may be the highest end of the phone, and then once they get comfortable and also once the cost come down, they will gradually broaden it to other phones. So it's not going to be -- it's going to be continuing to ramp through probably next two or two and half, three years.

Okay, great. Last one for me, obviously your cash flow from operations in the entire year was really strong, north of $100 million in that cash generated. Our guess is that as '14 develops you should generate similar amounts of cash. I realize CapEx will be up, but you probably have a higher revenue in earnings as well. Your cash is going to be almost close to $300 million at that point, do you have any plans on what are you going to do with the cash? Whether it means stock buyback, increase dividends, or just looking for small tuck-in acquisitions?

So apart from the capital expenditures I think our inventory levels were only at 90 today. With our growing business, the inventory levels I think should also go up a bit which can also be a use of cash. And so, you're correct, in spite of that we should have a growth in number. It may be not as large as what you are indicating, but we've said all along we have four uses and we have demonstrated opportunistically what we do. We just -- Board increased the dividend just last quarter, we're starting this year by 25%. And historically, we have bought a lot of shares buyback -- we've done share buyback as well as some internal investments and some strategic transactions. So I think it will be useful, all the four depending on what should I think at that point of time.

Okay. Great. Thanks so much.

Your next question comes from Christopher Longiaru with Sidoti & Company. Your line is now open. Christopher Longiaru - Sidoti & Company: Hey guys, thanks for taking my question.

Always, thanks. Christopher Longiaru - Sidoti & Company: Can you talk about your expectations for operating expenses kind of as the year progresses? Are there any major ramp ups in R&D as this progresses or tape out cost that we should be modeling?

I think the expenses will grow modestly throughout the year, but again, it will depend on how the whole year evolves as the time goes by for the revenue. Christopher Longiaru - Sidoti & Company: And is there kind of an area that you'd like to stay in as that evolves with respect to revenue?

So, roughly if you want for modeling purposes you can presume roughly 400, 500 a quarter; but again, as I said, it will depend on how the year evolves. Christopher Longiaru - Sidoti & Company: Okay.

Each quarter I've given you a rough number; but again, we will evaluate that as the year progresses. Christopher Longiaru - Sidoti & Company: That's helpful. And then just in terms of -- on the share repurchase plan, how much is left in the share repurchase plan?

The buyback you mean to say? Christopher Longiaru - Sidoti & Company: Yes.

It's about $30 million roughly.

And just to be clear, we are not buying at this time.

Right. Christopher Longiaru - Sidoti & Company: Okay. Thanks guys. That's all for me.

Thank you. You're welcome.

Your next question comes from Steve Smigie with Raymond James. Your line is now open.

Great, thanks for the opportunity on the follow-up. Just following up on that last operating expense question. So if I -- I didn't understand, were there any sort of one-time FICA charges, etcetera, in March that would suggest maybe in the June quarter? Overall OpEx dollars might be not as much as one might expect.

Well, typically the FICA ramps up in Q1, and typically somewhere -- if you look at the impact of the two items that are highlighted from Q4, FICA and the shutdown that we had in the fourth quarter of last year each was roughly around 300,000 to 400,000. Now FICA starts tapering more so towards the end of second quarter, but more so in the third quarter. But as a company, we are growing with -- and we are continuing to make investments in people are looking for our future growth. But depending on how the year evolves I was just giving a rough number for modeling of what the growth would be each quarter, but again the amount would really depend on how the year progress.

Okay. How should we think about seasonality for June at this point? I mean this is…

Well, typically, our second quarter has grown historically; but it's very hard to predict right now. We can just take a quarter at a time, but if you look at it historically it has grown in single-digits.

Yeah. Q2 and Q3 are usually growth quarters for us.

Okay. And in Q3 this year, probably an exceptional year in terms of strong growth because you're going to have, it sounds like a meaningful ramp there in overall rapid charger?

We do expect a meaningful revenue contribution from rapid charging in Q3 and Q4.

Okay. And then, within your industrial business, outside of just let's say LED and the concept businesses, how should we think about growth in these other areas, which I assume is areas like the air conditioning and stand-by power that kind of stuff. What should we be thinking about the growth in industrial outside of LED business and concept?

Yeah. We classify air conditioning under appliances which is part of the consumer market.

Okay.

I know some people put the appliances in industrial, but it does have industrial kind of characteristics. It is a high margin and very stable business. So in the industrial business, if you take out the LED and CT-Concept which is the high power business, you have motor control, you have process control, you have UPS power supplies, you have tools and so on and so forth. Very, very fragmented; very, very large number of applications; high margin, but not a lot of customers in there. So that part of the business has a steady growth, but you wouldn't see a very strong growth. We saw some of it in the smart -- was smart meters for a while, but that's still growing, but it's not as higher growth as it had initially when it was being adapted in many different countries. So I would say that will grow consistently, but no dramatic growth in those areas.

Okay. And then just turning to ASP and rapid charging, you guys I think have said is three, four times your traditional things, does that get you to something maybe north of $0.50 at least initially?

Well, I really can't comment on that one because that's a very sensitive pricing. It's a very sensitive issue in the mobile market. So I'll have to refrain from commenting on that.

Okay. Can you talk a little bit about your -- how you see market share playing out in rapid charging? Is there potential that you could have, say three or four guys or everybody gets a 25% share? Is there room for multiple guys to get in there?

I'm sure it's more than us. It's a very, very competitive market. So I would be surprised if it is less than four or five guys in that market getting a significant part of the share. It's just the way the market is -- like to have multiple sources just to keep everybody on it in terms of pricing, but we think we will get our -- at least our share or may be fair share depending upon how things go. We are certainly -- we think we are ahead of them in the QC area, but as I said, there are other protocols and only time will tell which one will become most prevalent, but whatever protocol becomes prevalent, we will support it and we will support multiple protocols accept what it takes.

Okay. Great. Thank you.

Just to be clear, the money is actually in the power conversion portion. The protocol itself is a relatively inexpensive part of the equation.

Okay. Thanks.

And we have no further questions at this time. I'll turn the call back to our presenters.

All right. Thanks very much. Thank you everyone for listening. There will be a replay of this call available on our website, investors.powerint.com. Thanks again for listening and good afternoon.

And this concludes today's conference call. You may now disconnect.