Integrated Device Technology
About IDT





 
Jan 26,2010

IDT Reports Continued Financial Strength in Fiscal Q3 2010

SAN JOSE, Calif., Jan 26, 2010 (BUSINESS WIRE) -- IDT(R) (Integrated Device Technology, Inc.)(NASDAQ:IDTI), a leading provider of essential mixed signal semiconductor solutions that enrich the digital media experience, today announced results for the fiscal third quarter ended December 27, 2009.

"Fiscal Q3 2010 marked our third consecutive quarter of revenue growth and improved operating performance," said Dr. Ted Tewksbury, president and CEO of IDT. "Revenue from new product lines represented approximately 15 percent of our total revenue, up from 10 percent in the prior quarter as sales of audio, PCI Express(R) and display solutions all grew double digits sequentially. In addition, we experienced healthy growth in our core timing solutions for communications and computing. Gross margin was better than we initially anticipated driven by improved product mix and increased fab utilization, and our operating expenses were down over $2 million from the prior quarter as we continue to maintain tight cost controls. All of these improvements allowed us to deliver financial results that were better than we originally expected and provide further evidence that our analog-intensive mixed-signal solutions emphasis, combined with strong execution, will deliver long term value for our shareholders."

Recent Highlights

Recently, IDT announced:

  • It acquired Mobius Microsystems, the leader in precision CMOS harmonic oscillator technology.
  • It divested its Micro Networks business to Spectrum Control, Inc.
  • Its first precision temperature sensors targeted at Double Data Rate 2 and 3 (DDR2 and DDR3) memory modules, Solid State Disks (SSD) and computing motherboards.
  • It expanded its signal integrity product line with the introduction of a new family of repeater devices for SAS/SATA 6G, PCI Express Gen2 (PCIe(R)), Serial RapidIO(R) 2.1 and USB3.0.
  • The IDT PureTouchTM capacitive touch controller has been selected by Gionee Communication, a leading China handset provider, for use in its slider-style mobile phone.
  • The IDT ViewXpandTM DisplayPortTM -based multimonitor solution was selected by EDN Magazine for inclusion in its "Hot 100 Products of 2009."
  • The next generation HQV Benchmark 2.0 DVD for testing and evaluating the quality of a wide variety of video and display products.
  • It has appointed Mr. Paul Rolls to be Senior Vice President of Worldwide Sales and Marketing.

The following highlights the Company's financial performance on both a GAAP and non-GAAP basis. The GAAP results include certain costs, charges, gains and losses in accordance with GAAP which are excluded from non-GAAP results based on management's determination that they are not directly reflective of on-going operations. Non-GAAP results are not in accordance with GAAP and may not be comparable to non-GAAP information provided by other companies. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. A complete reconciliation of GAAP to non-GAAP results is attached to this press release.

  • Revenue for the fiscal third quarter of 2010 was $142.5 million, compared with $167.1 million reported in the same period one year ago.
  • GAAP net loss for the fiscal third quarter of 2010 was $7.4 million or a loss of $0.04 per diluted share, versus a GAAP net loss of $345.3 million or a loss of approximately $2.06 per diluted share in the same period one year ago. Fiscal third quarter 2010 GAAP results include $17.3 million in acquisition and divestiture related charges of which $13.2 million is related to the fair value adjustment to acquired inventory that was sold during the quarter and amortization of acquisition related intangibles, $4.2 million of stock-based compensation and $3.1 million in restructuring related charges.
  • Non-GAAP net income for the fiscal third quarter of 2010 was $17.3 million or $0.10 per diluted share, compared with non-GAAP net income of $30.1 million or $0.18 per diluted share reported in the same period one year ago.
  • GAAP gross profit for the fiscal third quarter of 2010 was $59.7 million, compared with GAAP gross profit of $69.7 million in the same period one year ago. Non-GAAP gross profit for the fiscal third quarter of 2010 was $72.8 million, compared with non-GAAP gross profit of $84.0 million reported in the same period one year ago.
  • GAAP R&D expense for the fiscal third quarter of 2010 was $38.3 million, compared with GAAP R&D expense of $37.2 reported in the same period one year ago. Non-GAAP R&D expense for the fiscal third quarter of 2010 was $34.6 million, compared with Non-GAAP R&D of $32.7 million in the same period one year ago.
  • GAAP SG&A expense for the fiscal third quarter of 2010 was $24.8 million, compared with GAAP SG&A expense of $30.9 million in the same period one year ago. Non-GAAP SG&A expense for the fiscal third quarter of 2010 was $21.0 million, compared with non-GAAP SG&A expense of $22.4 million in the same period one year ago.

Webcast and Conference Call Information

Investors can listen to a live or replay webcast of the Company's quarterly financial conference call at http://www.IDT.com. The live webcast will begin at 1:15 p.m. Pacific time on January 26, 2010. The webcast replay will be available after 5:00 p.m. Pacific time on January 26, 2010.

Investors can also listen to the live call at 1:30 p.m. Pacific time on January 26, 2010 by calling (800) 230-1096 or (612) 288-0329. The conference call replay will be available after 5:00 p.m. Pacific time on January 26, 2010 through 11:59 p.m. Pacific time on February 5, 2010 at (800) 475-6701 or (320) 365-3844. The access code is 140583.

About IDT

With the goal of continuously improving the digital media experience, IDT integrates its fundamental semiconductor heritage with essential innovation, developing and delivering low-power, mixed signal solutions that solve customer problems. Headquartered in San Jose, Calif., IDT has design, manufacturing and sales facilities throughout the world. IDT stock is traded on the NASDAQ Global Select Stock Market(R) under the symbol "IDTI". Additional information about IDT is accessible at www.IDT.com.

Forward Looking Statements

Investors are cautioned that forward-looking statements in this release, including but not limited to statements regarding demand for Company products, customer ordering patterns, channel inventory, anticipated trends in Company sales, expenses and profits, and macroeconomic conditions involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations. Risks include, but are not limited to, global business and economic conditions, fluctuations in product demand, manufacturing capacity and costs, inventory management, competition, pricing, patent and other intellectual property rights of third parties, timely development and introduction of new products and manufacturing processes, dependence on one or more customers for a significant portion of sales, successful integration of acquired businesses and technology, availability of capital, cash flow and other risk factors detailed in the Company's Securities and Exchange Commission filings. The Company urges investors to review in detail the risks and uncertainties in the Company's Securities and Exchange Commission filings, including but not limited to the Annual Report on Form 10-K for the fiscal year ended March 29, 2009. All forward-looking statements are made as of the date of this release and the Company disclaims any duty to update such statements.

Non-GAAP Reporting

The Company presents non-GAAP financial measures because the financial community uses non-GAAP results in its analysis and comparison of historical results and projections of the Company's future operating results. These non-GAAP results exclude impairment charges, acquisition-related charges, share-based compensation expense and certain other expenses and benefits. Management uses these non-GAAP measures to manage and assess the profitability of the business. These non-GAAP results are also consistent with another way management internally analyzes IDT's results and may be useful. The Company has reconciled such non-GAAP results to the most directly comparable GAAP financial measures in the financial tables at the end of this press release.

Reference to these non-GAAP results should be considered in addition to results that are prepared under general accepted accounting standards in the United States, but should not be considered a substitute for results that are presented in accordance with GAAP. It should also be noted that IDT's non-GAAP information may be different from the non-GAAP information provided by other companies.

IDT, HQV, PureTouch, ViewXpand and the IDT logo are trademarks or registered trademarks of Integrated Device Technology, Inc. All other brands, product names and marks are or may be trademarks or registered trademarks used to identify products or services of their respective owners.

INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended

Nine Months Ended

Dec. 27Sept 27,Dec. 28Dec. 27,Dec. 28
2009200920082009 2008
Revenues $ 142,480 $ 139,504 $ 167,079 397,938 555,828
Cost of revenues 82,751 88,373 97,410 239,913 314,547
Gross profit 59,729 51,131 69,669 158,025 241,281
Operating expenses:
Research and development 38,316 41,455 37,247 116,086 122,398
Selling, general and administrative 24,754 30,662 30,879 80,851 96,055
Acquired in-process research and development - - 5,597 - 5,597
Goodwill and acquisition-related intangible assets impairment - - 339,051 - 339,051
Total operating expenses 63,070 72,117 412,774 196,937 563,101
Operating loss (3,341 ) (20,986 ) (343,105 ) (38,912 ) (321,820 )
Gain (loss) on divestitures (4,461 ) 82,747 - 78,286 -
Other-than-temporary impairment of investment - - (3,000 ) - (3,000 )
Interest income and other (expense), net 597 1,199 (1,150 ) 3,221 699
Interest expense (15 ) (11 ) (14 ) (45 ) (47 )
Income (loss) before income taxes (7,220 ) 62,949 (347,269 ) 42,550 (324,168 )
Provision (benefit) for income taxes 147 2,409 (2,010 ) 3,498 262
Net income (loss) $ (7,367 ) $ 60,540 $ (345,259 ) 39,052 (324,430 )
Net income (loss) per share:
Basic $ (0.04 ) $ 0.37 $ (2.06 ) $ 0.24 $ (1.92 )
Diluted $ (0.04 ) $ 0.36 $ (2.06 ) $ 0.24 $ (1.92 )
Weighted average shares:
Basic 165,954 165,591 167,412 165,658 169,354
Diluted 165,954 166,075 167,412 166,114 169,354
INTEGRATED DEVICE TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP
(Unaudited)
(In thousands, except per share data)
Three Months Ended

Nine Months Ended

Dec. 27Sept 27,Dec. 28Dec. 27,

Dec. 28

20092009200820092008
GAAP Net Income (Loss)$(7,367)$60,540$(345,259)$39,052$(324,430)
GAAP Diluted Net Income (Loss) Per Share$(0.04)$0.36$(2.06)$0.24$(1.92)
Acquisition and divestiture Related:
Amortization of acquisition related intangibles 4,803 6,109 19,652 16,131 61,104
Acquisition related costs (1) (254 ) 353 (2 ) 3,692 (8 )
(Gain) loss on divestitures 4,461 (82,747 ) - (78,286 ) -
Acquired In-process research and development - - 5,597 - 5,597
Goodwill and acquisition-related intangible assets impairment - - 339,051 - 339,051
Other-than-temporary impairment of investment (2)

-

-

3,000

-

3,000
Assets impairment (149 ) - - 1,853 -
Fair market value adjustment to acquired inventory sold 8,421 7,634 - 16,055 -
Restructuring Related:
Severance and retention costs 2,297 14,021 597 17,797 1,902
Facility closure costs (3) 23 13 50 59 145
Fabrication production transfer costs 783 322 - 1,105 -
Other:
Compensation expense (benefit)--deferred compensation plan (4) 521 1,112 (1,895 ) 2,522 (2,610 )
Loss (gain) on deferred compensation plan securities (4) (510 ) (1,111 ) 1,929 (2,497 ) 2,618
Stock-based compensation expense 4,163 3,919 9,012 12,342 25,783
Tax effects of Non-GAAP adjustments (5) 136 2,028 (1,604 ) 3,172 430
Non-GAAP Net Income$17,328$12,193$30,128$32,997$112,582
Non-GAAP Diluted Net Income Per Share$0.10$0.07$0.18$0.20$0.66
Weighted average shares:
Basic 165,954 165,591 167,412 165,658 169,354
Diluted 166,501 166,075 167,438 166,114 169,554
GAAP Gross Profit59,72951,13169,669158,025241,281
Acquisition and divestiture Related:
Amortization of acquisition related intangibles 2,996 4,262 13,639 11,178 42,980
Assets impairment (216 ) - - 1,786 -
Fair market value adjustment to acquired inventory sold 8,421 7,634 - 16,055 -
Restructuring Related:
Severance and retention costs 386 5,708 143 6,149 799
Facility closure costs (3) 9 4 15 21 43
Fabrication production transfer costs 783 322 - 1,105 -
Other:
Compensation expense (benefit)--deferred compensation plan (4) 73 156 (265 ) 353 (364 )
Stock-based compensation expense 630 995 787 2,251 2,757
Non-GAAP Gross Profit72,81170,21283,988196,923287,496
GAAP R&D Expenses:38,31641,45537,247116,086122,398
Acquisition and divestiture Related:
Amortization of acquisition related intangibles - - (19 ) - (57 )
Acquisition related costs (1) - - 2 2 6
Restructuring Related:
Severance and retention costs (1,190 ) (2,057 ) (454 ) (4,177 ) (914 )
Facility closure costs (3) (11 ) (5 ) (28 ) (27 ) (81 )
Other:
Compensation expense (benefit)--deferred compensation plan (4) (281 ) (600 ) 1,023 (1,361 ) 1,406
Stock-based compensation expense (2,246 ) (2,930 ) (5,101 ) (7,921 ) (15,402 )
Non-GAAP R&D Expenses34,58835,86332,670 102,602107,356
GAAP SG&A Expenses:24,75430,66230,87980,85196,055
Acquisition and divestiture Related:
Amortization of acquisition related intangibles (1,807 ) (1,847 ) (5,994 ) (4,953 ) (18,067 )
Acquisition related costs (1) 254 (353 ) - (3,694 ) 2
Restructuring Related:
Severance and retention costs (721 ) (6,256 ) - (7,471 ) (189 )
Facility closure costs (3) (3 ) (4 ) (7 ) (11 ) (21 )
Other:
Compensation expense (benefit)--deferred compensation plan (4) (167 ) (356 ) 607 (808 ) 840
Stock-based compensation expense (1,287 ) 6 (3,124 ) (2,170 ) (7,624 )
Non-GAAP SG&A Expenses21,02321,85222,361 61,74470,996
GAAP Interest Income and Other (Expense), Net5821,188(1,164)3,176652
Loss (gain) on deferred compensation plan securities (4) (510 ) (1,111 ) 1,929 (2,497 ) 2,618
Assets impairment 67 - - 67 -
Non-GAAP Interest Income and Other (Expense), Net139777657463,270
GAAP Provision (Benefit) for Income Taxes1472,409(2,010)3,498262
Tax effects of Non-GAAP adjustments (5) (136 ) (2,028 ) 1,604 (3,172 ) (430 )
Non-GAAP Provision (Benefit) for Income Taxes11381(406)326(168)

(1) Consists of costs incurred in connection with merger, acquisition and divestiture-related activities, including legal and accounting fees.

(2) Consists of an other-than-temporary impairment charge related to our investment in non-marketable equity security.

(3) Consists of ongoing costs associated with the exit of our leased facilities.

(4) Consists of gains and losses on marketable equity securities related to our deferred compensation arrangements and the changes in the fair value of the assets in a separate trust that is invested in Corporate owned life insurance under our deferred compensation plan.

(5) Consists of the tax effects of non-GAAP adjustments related to acquisitions and stock-based compensation expense.

INTEGRATED DEVICE TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
Dec. 27,Mar. 29,
(In thousands)20092009
ASSETS
Current assets:
Cash and cash equivalents $ 188,715 $ 136,036
Short-term investments 190,057 160,037
Accounts receivable, net 61,065 54,894
Inventories 49,343 69,722
Deferred Taxes 1,696 1,696
Prepaid and other current assets 22,765 19,881
Total current assets 513,641 442,266
Property, plant and equipment, net 69,407 71,561
Goodwill 101,184 89,404
Acquisition-related intangibles 50,882 50,509
Other assets 24,986 24,627
TOTAL ASSETS $ 760,100 $ 678,367
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,224 $ 25,837
Accrued compensation and related expenses 15,940 18,820
Deferred income on shipments to distributors 19,505 16,538
Income taxes payable 3,080 457
Other accrued liabilities 27,647 21,206
Total current liabilities 98,396 82,858
Deferred tax liabilities 3,467 3,220
Long term income taxes payable 21,066 20,907
Other long term obligations 25,778 14,314
Total liabilities 148,707 121,299
Stockholders' equity 611,393 557,068
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 760,100 $ 678,367

SOURCE: Integrated Device Technology, Inc.

IDT Investor Relations
Mike Knapp, 408-284-6515
mike.knapp@idt.com
IDT Worldwide Marketing
Carolyn Robinson, 408-284-8200
carolyn.robinson@idt.com

Copyright Business Wire 2010





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